Yearly Archives: 2017

Lawmakers will soon grapple with the fact that sick people are expensive to cover, and someone has to pay. However, we must understand that there is no certain cost to health insurance.

What the general discussion about how to cover people in the future is missing is that Obamacare is so flawed that by itself it is manufacturing plan premium levels that are at least 30% to 40% higher than they need to be.

The Obamacare insurance exchanges cover only about 40% of those that are subsidy eligible, when the longstanding insurance industry underwriting rule calls for 75% of an eligible group to be covered in order to have enough healthy people enrolled to pay the costs of the sick. This critical point that is being missed.

What would happen if the plans were more attractive––if people saw value in them? And, if we had 75% of the eligible group signing up as a result, what impact would that have on current premiums?

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Practically since Obamacare became law, Republicans in Congress have been promising to repeal it. The law has been consistently unpopular during that time as well.

The January edition of the Kaiser Health Tracking Poll shows that those who want to repeal Obamacare outnumber those opposed 48 percent to 47 percent. This is higher than in the November edition, which found that 43 percent wanted to repeal or scale back the law.

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It’s clear that whatever replaces Obamacare must focus on quality and incremental local solutions, not one-size-fits-all government mandates.

In this respect, the federal government’s biggest task for replacing Obamacare is to get out of the way and let state policymakers and health care providers innovate.

First off, let’s get clear what Americans want: They’d like many choices of affordable health insurance plans that allow them to choose their doctors. They want to buy a plan when they are young, then keep their plan from job to job and into retirement. And they’d like it to be truly affordable. These “must haves” are obvious to people of any political orientation.

Instead of approaching this challenge like designing a single system or product (the way Obamacare was constructed), Congress needs to help these conditions develop organically, while preserving freedom of choice for Americans.

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Late last year, House Speaker Paul Ryan (R., Wis.) told a group of senior GOP lawmakers that the person they needed to watch in the Senate in 2017 was Elizabeth.

“Elizabeth Warren?” one lawmaker asked.

“No,” Mr. Ryan replied, according to a lawmaker in the room, “Elizabeth, the Senate parliamentarian.”

Elizabeth MacDonough, the sixth person and first woman to hold the title of chief Senate parliamentarian, will play a crucial role in determining what can be included in legislation enabling the Senate to roll back major parts of the Affordable Care Act with just a simple majority, rather than the 60 votes usually needed.

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Health policy experts on both the left and the right need to take a deep breath and re-direct their collective energy to suggesting ways to improve the current regulatory environment.  No industry stakeholder can say with a straight-face that the individual health insurance markets are functional.  It is well-accepted that the markets are unbalanced.  And it is well-established that the unbalanced markets are resulting in financial losses for insurance companies and premium increases for consumers.

Is this the Republicans’ fault?  No.  Is it the Republicans’ problem?  Yes.  As a result, once portions of the ACA are repealed in the coming weeks, Republicans will undertake efforts to improve the current regulatory environment.  How?  First, it is likely that Congress will fund the “cost-sharing” reduction subsidies for 2017, 2018, and likely 2019.

Second, Congress and the Administration will attempt to stabilize the individual insurance markets by requiring pre-verification before a person can enroll in an ACA Exchange plan during a “special enrollment period”; changing the 90-day grace period in cases where a policyholder fails to pay their premiums; prohibiting 3^rd parties from paying premiums on behalf of certain consumers; providing more flexibility for insurance companies under the Medical Loss Ratio rules; continuing payments under the “reinsurance” program for 2016 (not to be confused with the “risk corridor” program); fixing the “risk adjustment” formula; and modifying the age variant for developing premium rates from a 3-to-1 to a 5-to-1 ratio.  In addition, it is likely that funding will be provided to cover high-risk individuals – through high-risk pools or other means.

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President-elect Donald Trump said in a weekend interview that he is nearing completion of a plan to replace President Obama’s signature health-care law with the goal of “insurance for everybody,” while also vowing to force drug companies to negotiate directly with the government on prices in Medicare and Medicaid.

Trump declined to reveal specifics in the telephone interview late Saturday with The Washington Post, but any proposals from the incoming president would almost certainly dominate the Republican effort to overhaul federal health policy as he prepares to work with his party’s congressional majorities.

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Republicans have their best opportunity in a generation to enact a reform plan for health care that moves decisively toward a market-based approach, with far less reliance on federal regulation and control. A reform plan of this kind would represent a dramatic break from decades of policymaking and would be a major component of an effort to rein in the sprawling federal welfare state.

To succeed in this effort, however, House and Senate Republicans, as well as the incoming Trump administration, must dispense with wishful thinking. There is no plan for replacing the Affordable Care Act (ACA) that is without political controversy. Whatever they do will involve trade-offs, and in some cases they will be attacked by their political opponents for doing what is necessary but perhaps unpopular.
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Congress has begun the work of replacing the Affordable Care Act, and that means lawmakers will soon face the thorny dilemma that confronts every effort to overhaul health insurance: Sick people are expensive to cover, and someone has to pay.

The 2010 health law, also known as Obamacare, forced insurers to sell coverage to anyone, at the same price, regardless of their risk of incurring big claims.

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The American health care system is not like a normal market. When you make most health care decisions, you don’t get much information on comparative cost and quality; the personal bill you get is only vaguely related to the services; the expense is often determined by how many procedures are done, not whether the problem is fixed. Republicans are going to try to introduce more normal market incentives into the process. They will likely rely on refundable tax credits and health savings accounts to ensure that everybody can afford to shop for their own insurance and care.

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