It Stinks Less, but It Still Stinks   Leave a comment

Rick, my cousin who is a world-class research doctor who has been helping me to understand medical insurance reform, finally got around to sending me his analysis of the most recent Republican effort to sort of repeal and sort of replace the Affordable Care Act. If I were a Trump voter who voted for Trump and the GOP believing the promise that they would repeal of the Affordable Care Act before it bankrupted me, I’d be a bit annoyed. I am a bit annoyed and I didn’t vote for them expecting them to actually do anything because I knew Trump likes universal medical insurance and socialized medical care. He said things supportive of it back in the run-up to the ACA passing.

Related imageBut, here we are, waiting with baited breath to see if the Republicans actually have a votable bill this time.

The AHCA relies on three stages. The passage of the AHCA is simply Stage 1. As Senator Ted Cruz pointed out when the original iteration of the AHCA was being debated, the basket of goodies in the second and third baskets are what the GOP has been promising voters for over half a decade. The problem is that the first “basket” changes almost nothing and the subsequent baskets rely on easily changed mandates from the Secretary of Health and Human Services, who could be a raving progressive from England after 2020.

If the AHCA can in any way be heralded as a conservative win, it’s the amendments made since the March failure-to-launch that move us toward a medical care system based on free markets that are note-worthy, but the AHCA still isn’t a “free market solution.” To make the bill palatable to the must-have House Freedom Caucus, two amendments were added that allow states to apply for waivers to opt-out of the pre-existing conditions requirement and the provision regarding “essential health benefits”.

However, with one dumb comment from President Trump and a moving story from Jimmy Kimmel — another amendment was added that provides $8 billion over 5 years for the nearly inconsequential issue of “pre-existing conditions.”

People really should know, about pre-existing conditions coverage in America, because mention of the phrase seems to halt all rational discussion, while precious few Republicans are prepared to defend the point eloquently or adequately. It is something vital to understand.

Rushing the medical care vote in March has made Americans, and particularly Republicans, wary. The president and Republican Congress only have themselves to blame because they should have spent months talking about the bill before voting on it. That talking would have educated people on what is actually in the bill. Falling short on today’s vote will leave most Americans who voted for Republicans because they promised to repeal Obamacare and later to replace it with something better, with the clear understanding that Republicans never meant what they said. Bye-bye, GOP!

So we’re stuck with what it is … at least for now.

In broad terms, the bill would likely reduce government spending and decrease insurance premiums for people who are healthy and young and don’t get insurance through their employers. It also likely will increase costs for older, sicker people and take away government-provided coverage from people in the lower middle-class. Those are, despite what the naysayers want you to believe, are good things.

The new American Health Care Act would have far less impact on people who get insurance from their employers, but let’s be clear — the AHCA is a complicated bill that builds off of the ACA, another even more complicated bill, so its potential impact is complicated and, therefore, difficult to predict. But Rick identified some of the major changes to the medical care landscape that could occur if the AHCA passes in its current form.

People with pre-existing conditions will no longer be treated as if they are healthy.

The House Freedom Caucus fought for an amendment to be introduced that loosens regulations that requires insurance companies to sell plans to people who buy insurance independent of their employers or the federal government.  It potentially will impact rules that protect people with pre-existing medical conditions from being discriminated against by medical insurers.

Right now there’s panic among Obamacare supporters that the amendment could make insurance coverage unaffordable for people with existing medical issues. And Republicans and conservatives have proved ill-equipped at defending their position as equally compassionate but packaged in a different vehicle. This allows appeals to emotion, like that of Jimmy Kimmel’s tear-jerker about how his baby wouldn’t be covered because he was born with a heart condition, to shut down all thinking and conversation when the phrase “pre-existing condition” is uttered.

 In truth, the MacArthur amendment keeps the ACA’s guaranteed access clause, which requires insurers to provide policies to those with pre-existing conditions. However, the bill would allow states to apply for waivers that could change the cost and quality of their coverage.

First: prior to the ACA, the vast majority of Americans with medical insurance were already in plans that were required to offer them coverage regardless of pre-existing conditions. Employer-based plans were required to offer coverage to everyone regardless of pre-existing conditions. So were Medicare, Medicaid, and other government programs like the VA. Employer- and government-based plans, prior to Obamacare, represented 90 percent of Americans with medical insurance.

The other 10 percent were people buying coverage on their own, on the individual market. In most — but not all — states prior to Obamacare, people buying coverage on their own could, in theory, be denied coverage for a pre-existing condition.

In reality, in practice, a tiny percentage of Americans were being denied coverage due to a pre-existing condition prior to the ACA. We know this in general because surveys consistently indicated that this was the case, and in detail because of an Obamacare program called the Pre-Existing Condition Insurance Plan, or PCIP.

PCIP was designed to work from the years 2010 to 2014, as a bridge until Obamacare’s insurance regulations took effect. During those years, Americans could sign up for heavily subsidized coverage under PCIP if they had documented proof that they had been denied coverage by an insurance company and had a pre-existing condition.

What happened? Enrollment in PCIP peaked in February 2013 at 114,959.

Under the AHCA with the MacArthur amendment, states could opt out of the law’s essential medical benefits measure, which requires insurers to cover 10 main benefits, including hospitalization, prescription drugs and other services. Insurers in those states would likely offer trimmed-down policies might not cover for all the treatments and medications that those with medical issues need. Carriers would likely offer more comprehensive policies to consumers with costly conditions at higher premiums.

Let’s remember that the #1 driver of the out-of-control premium increases under Obamacare has been people with costly conditions paying the same premiums as healthy individuals who don’t go to the doctor nearly as often.

The amendment addresses this by allowing states to change the ACA’s community rating provision, which bans insurers from charging enrollees higher premiums based on their medical history. Under the revised bill, insurers could charge higher premiums to those with pre-existing conditions who let their coverage lapse. This is very similar to what existed prior to the passage of the ACA. It gave people with pre-existing conditions an incentive to remain covered while holding a lid on premium increases for the rest of us.

States that apply for this waiver would have to set up high-risk pools or other programs aimed at minimizing insurers’ exposure to costly policyholders. This would offset some of the price hikes carriers would levy on those with pre-existing conditions. They’ve only set aside $130 billion to fund these programs through 2026, which some observers feel is woefully inadequate, but the alternative is the bankrupting of the middle-class with the ACA’s out-of-control premium increases, so it’s worth it to return to a system that worked in the past. High risk pools existed before Obamacare, but many were underfunded, charged policyholders premiums in line with the costs of their ongoing care and had waiting lists.

 

Lower-income people could get caught by this amendment if the bill becomes law. A Congressional Budget Office analysis of an earlier version of the bill found 24 million people could become uninsured under the GOP legislation. That number is likely ginned up because it assumed that everyone who went on Medicaid under the ACA would be ineligible under reform, but we showed in our earlier analysis that this is not true. The few lower-income folks who become uninsured due to the rollback of Medicaid expansion may encounter higher premiums when they try to get insurance because insurers would be allowed to set rates based on their health backgrounds.

In other words, people will once more pay premiums based on what their cost of care is likely to be.

 

Medical care is incredibly expensive in the United States, and if you get sick, it’s going to cost a lot. Which is why it’s important for older and less healthy people to purchase medical insurance, but when Obamacare required everybody to buy insurance and insurers to offer coverage to everybody, regardless of their cost of care, it distorted the insurance market and drove up premiums to unaffordable levels for everyone. Before Obamacare, insurance companies were required to sell insurance to people with medical issues provided the person could pay the premiums dictated by their cost of care. That was actually a provision within HIPPA that Obamacare supporters refuse to acknowledge.

Why the ACA is failing is that it regulated how much insurers could charge people with medical issues. This is called “a community rating”. That meant insurers suddenly had to charge everyone the same price for the same coverage. Prices can’t currently be based on factors such as a person’s sex or how sick they are. Under the GOP plan, states could get a waiver that would allow insurers to set prices based on how healthy a person is.

Republicans have argued that they wouldn’t be totally eliminating protections for people with pre-existing conditions because states don’t have to ask for a waiver. Obamacare supporters believe that claim ignores some difficult realities.

Subsidies that help people buy insurance will be reduced under the AHCA. That will likely lead healthier people to leave the insurance market, further increasing premiums for those who remain. Yeah, freedom sometimes allows people to act in their own best interest. States might have to seek the waivers to keep the insurance marketplaces up and running. Yup, that’s the whole supply-and-demand cycle that economists warn us about. All this could add up to insurers’ offering coverage that is unaffordable to people with pre-existing conditions.

The AHCA tries to combat those increased costs through a fund for high-risk pools, insurance programs for people with extremely high health care costs. I am familiar with Alaska’s high-risk pool and it did a good job in covering people with pre-existing conditions … far better than having only one insurance company in all of the state of Alaska to cover everybody in the individual market at very high premium prices.

Monopolies can pretty much charge what they want and Obamacare created a lot of monopoly in the insurance market.

 

Medicaid would go back to being a program for the poor.

Although amendments to the AHCA have gotten the most coverage in recent weeks, changes to Medicaid from the original version of the GOP bill are what cut government spending while rolling back multiple taxes.

Before the ACA, Medicaid was an insurance program for people below the federal poverty line and those who met certain criteria, such as having a disability, being pregnant or being a woman with children. Obamacare changed that by opening up Medicaid to everyone below 138 percent of the federal poverty line in states that chose to expand the program. Thirty-one states and D.C. opted to expand Medicaid, and more than 11 million people joined the Medicaid rolls. Many were already eligible for Medicaid and had chosen not to apply or they only became aware that they were previously eligible when they were forced to apply.  Medicaid expansion included families of four making up to $55,000 here in Alaska. The GOP bill would freeze that part of the program on Jan. 1, 2020.

Some Obamacare supporters claim the AHCA wouldn’t just cut back Medicaid expansion, it would also trim the prior existing program, by capping how much states would be reimbursed for enrollees. The Congressional Budget Office estimates that the net effect of the changes would be 14 million fewer people on Medicaid, which might delay the impending bankruptcy of that program by a decade.

 

Insurance premiums would go down for some, but others would pay more than they currently do.

 

Then there are the insurance subsidies and monthly premiums for people who buy insurance on the private market instead of through an employer. The AHCA would make several big changes that would likely lower premiums somewhat, according to the CBO’s analysis. In addition to potentially changing the costs for people with pre-existing conditions, the bill would allow older people to be charged a lot more than they currently are  …  up five times what younger enrollees pay. Again, older people who are not in good health are a primary driver of the premium increases we’ve seen under Obamacare. Currently, subsidies available to people who buy on the Obamacare marketplaces are calculated so that lower-income people won’t pay more than a set percentage of their income. Subsidies go up if you earn less, live in an area where insurance is more expensive or are older. Under the GOP bill, the system would become simpler: You’d get a subsidy based on your age, which would begin phasing out for people with an income of $75,000 a year.

The McArthur amendment would also allow states to get a waiver on the essential health benefits required by Obamacare. This provision requires plans to cover a range of services, including hospital, maternity and mental health care. So, if you’re a single male, you pay for maternity coverage whether you need it or not. The requirements push up insurance premiums, because insurers must cover more services.

This aspect of the AHCA brings up a larger question facing the bill overall. Passage in the Senate is far from certain, but even before that, the AHCA would have to pass muster with the Senate parliamentarian, the gatekeeper for Senate rule making. See, this GOP replacement bill is not really a full replacement; it’s kind of like an update to the ACA. That’s because the GOP doesn’t have the votes to fully repeal the ACA, which would require 60 senators, so it’s using a process called reconciliation, which allows the Senate to to pass bills that affect the federal budget with a simple majority. Much of the AHCA, such as the cuts to Medicaid and changes to insurance subsidies, falls within that mandate. But other changes, such as waivers to essential health benefits, don’t have a direct budgetary impact, leading some experts to believe the Senate parliamentarian will flag those changes as outside the realm of reconciliation.

 

What We Couldn’t Find in the Bill?

There’s still no interstate purchase of insurance and there isn’t a mechanism for allowing individuals to form groups that are not employer-based, so the two biggest tools for driving down premiums remain unavailable. They may come in one of the two later stages, but as already explained, these are easily swept aside by every new Secretary of Health and Human Services.

While the Republican bill may be a step toward making medical care more affordable to most Americans, it is a far cry from the “repeal” Republicans ran on when the Tea Party began to make inroads and win seats and they realized promising something they couldn’t really deliver was better than being realistic.

The AHCA still stinks like three-day-old fish left out on the counter, but it may not stink quite so much as the ACA. Premiums will go down for healthy individuals in the middle class, but so long as we’re still mostly required to buy insurance or pay a penalty, we aren’t really free to make our own decisions.

 

Advertisements

What's Your Opinion?

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

Leo X. Robertson

News of my latest publications, events, and episodes of the Losing the Plot podcast!

Sherry Parnell

Author of "Let the Willows Weep"

Emerald Book Reviews

Book Reviews and Promotion Services

YA Chit Chat

The Ponderings of YA author J. Keller Ford

madchen863's Blog

Planet Earth: home of life

MIND MIX RADIO

Radio for the Awake and Aware

SHAKERS & MOVERS

Soweto isiPantsula Crew + Management

RedheadedBooklover

Just a redheaded woman who is obsessed with books

Mercedes Prunty Author

The Walking Mumbie

InsureZero Blog

All you need to know about Insurance

Creative Ideas for Starving Artists

Brain juice that revives and refreshes

Real Science

"Science is the belief in the ignorance of the experts" - Richard Feynman

Marsha Ingrao

Traveling & Blogging Near and Far

Victoria (V.E.) Schwab

"You can't get a cup of tea big enough or a book long enough to suit me." ~C.S. Lewis

Darlene Foster's Blog

dreamer of dreams, teller of tales

All About Writing and more

Advice, challenges, poetry and prose

Tapestry ~ Treasures

My life is but a weaving between the Lord and me!

Sue Vincent's Daily Echo

Echoes of Life, Love and Laughter

S.R. Mallery's AND HISTORY FOR ALL

Everything Historical And Much More...

%d bloggers like this: