This week the GOP is scrambling to slap together another version of a Trumpcare plan that will please all party members. The Freedom Caucus, the ultra-conservative wing of the GOP, wants to essentially do away with any government involvement in health care and turn it all over to private, for-profit companies to decide what’s best for Americans. Of course, the people making these decisions have wonderfully comprehensive health insurance provided automatically by the taxpayers at absolutely no cost to them. So, it’s understandable that they might not always understand the dilemma of everyday working people facing the purchase of health insurance. That said, let’s take a quick look at a couple of the primary features of the plan the GOP is currently considering.
First, they want to allow states to obtain waivers if a particular state decides that it does not want to provide all of the ten Essential Health Benefits (EHB) mandated by the current Affordable Care Act (ACA). You’re going to hear more about these so let’s take a quick look at what these EHB’s are.
- Ambulatory Patient Services (Outpatient Care)
- Emergency Services
- Pregnancy, Maternity, and Newborn Care
- Mental Health and Substance Use Disorder Services
- Prescription Drugs
- Rehabilitative and Habilitative Services and Devices
- Laboratory Services
- Preventive and Wellness Services
- Pediatric Services including Oral and Vision Care
Before the ACA, many insurance companies limited Mental Health Care, put very low limits on Rehabilitative Services and often put separate, high deductibles on Pregnancy and Maternity Care. With the waiver system being proposed by the GOP, insurance companies could once again take us back to the pre-ACA days when the could pick and choose what services to offer and limit or exclude those coverages that they did not find profitable. Once again, people needing those services, or any others the insurance companies chose to exclude, would find themselves out of luck.This is the very sort of cherry-picking that the ACA was designed to prevent.
Second, the GOP claims they want to keep the provision of the ACA that requires insurers to accept people with pre-existing conditions, but they now want to allow the companies the right to charge those individuals higher rates. This is the system we already had! How much do you think it will cost someone with a cancer diagnosis to buy insurance? This is the same as saying you have the right to buy a 2017 Lamborghini Adventador SV Roadster — all you need to do is pay $535,500! The word you will hear thrown about is guaranteed “access” to health insurance. Access means absolutely nothing if the insurance companies can single out those with pre-existing conditions and price them out of reach.
As of today, there is no word on what they are now planning to do with Tax Credits that help people buy insurance, or the Cost Sharing subsidies that help offset the cost of healthcare for those making less than 250% of the Federal Poverty Level. Regardless of what their decision is on those items, the two items mentioned above are enough to determine that millions of people will see their health insurance options return to the pre-ACA days. But of course, the people in the House and Senate will see no impact whatsoever on their nice, taxpayer paid group health insurance plans that cover everything.
Donald Trump and his colleagues in the GOP claim to have one mission: repeal Obamacare and replace it with something supposedly better. After the Congressional Budget Office found that such a move would leave over 20 million uninsured in the country, some of his party balked. The far right wing of the GOP, however, felt that the GOP plan didn’t go far enough and rebelled because they wanted even less government support for healthcare. Consequently, nothing has been done so far.
What is interesting is that all this talk about abolishing the Affordable Care Act has caused California to revisit the idea of creating its own single payer system for its residents, essentially a Medicare for All plan within just one state. It takes a large pool of people to make such a plan work and California is one of the few states with enough people to probably make this work. The California legislature put forward similar plans in 2006 and 2008 but they were thwarted by then Governor Schwartzenegger.
A 2005 study indicated that such a plan could save the state a third of a Trillion Dollars over ten years. Interestingly, the Congressional Budget Office in 1991 and 1993 studied a similar plan for the entire United States in which they found that such a plan could cover everyone in the country and still cut the per capita cost of health care.
Although California has a long road ahead of it before this idea might actually become reality, it will be interesting to watch because it has implications for the entire country. It is important to remember that in some countries universal coverage did not happen overnight either. In Canada, for instance. the history of their single payer system shows that it started with a single province and then a second, and then the whole country.
So the fascinating question with regard to US health care is, will Donald Trump and the GOP be remembered as the catalyst for bringing universal health care to the last industrialized nation on earth that lacks it? If California is successful, it is entirely possible that, as California goes, so goes the Nation.
It seems that the Trump administration can’t to decide whether Obamacare (ACA) will “explode” or “implode”. Different members of the GOP use these words interchangeably, seemingly unable to get their talking points synchronized. What all such statements have in common is the absolute lack of evidence or statistics that any such thing is actually going to happen.
Sure, premiums are going up but these memory-impaired politicians forget that premiums increased every year prior to the ACA being passed. Accepting those with pre-existing conditions was always going to cause a spike in rates until the pool stabilized, but to claim that premium increases only started after ACA was passed is just, well, a lie.
Oh, and I am amused that many of these same talking heads often reference the high-deductible plans that are the result of ACA. Excuse me? Actually, ACA made plans with deductibles like $7500 and $10,000 illegal! Once again, that information does not fit the GOP current agenda regarding the ACA, which is primarily “The sky is falling, run tell the King!”.
However, the message has continued to be that ACA is failing and that the public must accept whatever cobbled together mess the ruling party can come up with. One has to wonder if they have painted themselves into such a corner that the next step will be to torpedo the ACA themselves since it won’t fail on its own as they have predicted. There are many ways to do that even though the public, and some of their own party, have strongly denounced the plan they initially offered.
One way they can start that is by having the Justice Department stop defending the suit filed by the GOP House against President Obama in 2014 claiming that cost-sharing subsidies provided to some people to lower deductibles and out of pocket expenses are not legal. If Trump orders the Justice Department to stand down on the suit, then the plaintiffs prevail and the cost sharing subsidies disappear. If the insurance companies do not receive those subsidies, then they would either have to spike rates or drop out of the markets.
According to an article in The Hill on Tuesday, the Trump administration has not decided what to do. Insurance companies are clamoring for some direction because they can’t plan for 2018 unless the money is appropriated or the lawsuit defended. Only time will tell whether Trump will attempt to destroy the ACA himself or risk the possibility that the public’s growing affection for Obamacare will continue.
The Insurance Geek is a blog and website designed to make some sense out of what is often a confusing subject for many people. Insurance is not an exciting purchase, certainly not like buying a new car. No matter how deeply you plunge into debt to get those new wheels, most everybody gets excited about pulling into the driveway with a shiny new car. An insurance policy, not so much. You really can’t wave your brand new health, life, home or auto insurance policy in the air and impress the neighbors. And, since the insurance is often required by the state or your bank, there is the additional burden of having been forced to do it.
During over 30 years as an insurance agent, I have found that, while people aren’t necessarily thrilled about the purchase of insurance, the biggest consternation arises from the fact that the coverage, options, features and premiums are seemingly designed to be as confusing as possible. I have spent far more time over the years just explaining insurance than I have actually “selling” it.
I have written a few ebooks on insurance topics with the express idea of providing consumers with the type of knowledge needed to be a smart shopper. Those ebooks are on this website under the Insurance Books page and can be purchased if you find an interest. There is another ebook coming soon about the incredibly frustrating subject of health insurance and another one on Medicare supplements and options.
To add to those ebooks, I will also be posting in The Insurance Geek blog where I plan to delve into the same sort of topics but in a more “bite-sized” blog approach and with greater frequency. I hope you will find the information helpful. My belief is that by taking just a little bit of time to become a more educated consumer, you will understand the subject a lot better and make the purchase of insurance a lot less aggravating and intimidating. And if I can do that for just a few people, it will have been a good day!