Any healthy guesses?
Posted: Mon Nov 14, 2016 7:20 pm
What parts of the ACA will remain after "repeal and replace" or an amendment? There are four general areas that make up the ACA (Obamacare) and when people say the hate/love it, they normally do not distinguish. The four main sections of the law are:
1. Medicaid expansion.
2. The insurance "exchange" for individual policies (and small employers).
3. Regulatory provisions that say what can/can't be in a health policy/plan.
4. Taxes, which are made up of general taxes to fund particular provisions, and punitive taxes and tax subsidies to encourage coverage.
The Medicaid expansion has done what it set out to do, which is cover more lower income people, with reports of about 10 million added. Unfortunately, this is not soundly funded, which is why so many governors did not agree to the expansion in their states. They were afraid of getting people onto Medicaid only to have to fill the funding gap when the federal government decided to stop borrowing money to provide this coverage. If there is no funding for this, then it needs to be phased out or cut back.
The insurance exchanges had early success in providing low cost policies, but then the reality hit. Insurance companies initially low-balled their premiums to build the insured base, with the back-up that the reinsurance tax would cover their losses if they had a high cost experience. As expected, many of these plans had poor experience from the beginning, and the reinsurance funds were far less than needed to cover losses. This has led to the well-reported high premium increases and insurers dropping out of various counties and states. The non-ACA individual policy market still exists, some state exchanges are in decent shape, and some states previously had high-risk pool programs in place. This part of the law has been unpopular and it should be fairly easy to end it, especially if the law is changed to allow purchasing policies issued in other states to increase available policies.
On the regulatory side, there are provisions that make sense and others that are costly with little benefit. I expect that the following will continue: 1) coverage under parent's plan until age 25 (get this healthy population in the insured pool); 2) guaranteed renewal of an existing policy -- many states already had this and no one should be bumped off their policy because they become high cost since that is the whole point of insurance; 3) elimination of the annual and lifetime caps -- again, this is why we have insurance and, on a macro-level this does not cost very much, but it makes all the difference to the unlucky few who push up on the prior limits.
There are many provisions that provide some benefit but do have a substantial cost: coverage of preventative care with no patient cost; easing of the pre-existing policy exclusion for people who have been in the system (people who have no coverage and then get sick/injured should have to go through waiting period of the prior law and should be in the high-risk pool plans); civil rights provisions; claim denial/appeal process.
Provisions that should thrown on the huge pile of bad ideas: minimum essential health coverage (i.e., required provisions and level of coverage in policies), elimination of stand alone mini-plans and HRAs, required waiting periods for employer coverage, automatic enrollment provisions, dependents required to be offered coverage, and many others. These all impose substantial costs and regulatory costs, and actually work to reduce the amount healthcare that is actually offered.
Most of the taxes can go. Tax on individuals for not having coverage. Tax on employers for not providing X level of coverage. Tax on all policies. Tax on "Cadillac" plans, which is really a tax on Chevys. Get rid of the unwieldy tax reporting forms to prove someone has insurance or an employer paid for insurance. Tax on medical devices. Tax on prescription drugs. The reinsurance tax has already expired. Okay, we can keep the tax on tanning salons. Then there are a ton of minor taxes that, like the ones above, are just bad tax policy -- provide minimal tax revenue, are unfairly focused, and have a high cost of compliance. In their place will probably be a modified form of the ACA tax incentives for individuals and small employers to provide coverage. These are a cost item, as is the Medicaid expansion, which raises the common problem of how to pay for such benefits when taxpayers are not willing to fund the programs. Expect it to not be easy, and to get messy.
1. Medicaid expansion.
2. The insurance "exchange" for individual policies (and small employers).
3. Regulatory provisions that say what can/can't be in a health policy/plan.
4. Taxes, which are made up of general taxes to fund particular provisions, and punitive taxes and tax subsidies to encourage coverage.
The Medicaid expansion has done what it set out to do, which is cover more lower income people, with reports of about 10 million added. Unfortunately, this is not soundly funded, which is why so many governors did not agree to the expansion in their states. They were afraid of getting people onto Medicaid only to have to fill the funding gap when the federal government decided to stop borrowing money to provide this coverage. If there is no funding for this, then it needs to be phased out or cut back.
The insurance exchanges had early success in providing low cost policies, but then the reality hit. Insurance companies initially low-balled their premiums to build the insured base, with the back-up that the reinsurance tax would cover their losses if they had a high cost experience. As expected, many of these plans had poor experience from the beginning, and the reinsurance funds were far less than needed to cover losses. This has led to the well-reported high premium increases and insurers dropping out of various counties and states. The non-ACA individual policy market still exists, some state exchanges are in decent shape, and some states previously had high-risk pool programs in place. This part of the law has been unpopular and it should be fairly easy to end it, especially if the law is changed to allow purchasing policies issued in other states to increase available policies.
On the regulatory side, there are provisions that make sense and others that are costly with little benefit. I expect that the following will continue: 1) coverage under parent's plan until age 25 (get this healthy population in the insured pool); 2) guaranteed renewal of an existing policy -- many states already had this and no one should be bumped off their policy because they become high cost since that is the whole point of insurance; 3) elimination of the annual and lifetime caps -- again, this is why we have insurance and, on a macro-level this does not cost very much, but it makes all the difference to the unlucky few who push up on the prior limits.
There are many provisions that provide some benefit but do have a substantial cost: coverage of preventative care with no patient cost; easing of the pre-existing policy exclusion for people who have been in the system (people who have no coverage and then get sick/injured should have to go through waiting period of the prior law and should be in the high-risk pool plans); civil rights provisions; claim denial/appeal process.
Provisions that should thrown on the huge pile of bad ideas: minimum essential health coverage (i.e., required provisions and level of coverage in policies), elimination of stand alone mini-plans and HRAs, required waiting periods for employer coverage, automatic enrollment provisions, dependents required to be offered coverage, and many others. These all impose substantial costs and regulatory costs, and actually work to reduce the amount healthcare that is actually offered.
Most of the taxes can go. Tax on individuals for not having coverage. Tax on employers for not providing X level of coverage. Tax on all policies. Tax on "Cadillac" plans, which is really a tax on Chevys. Get rid of the unwieldy tax reporting forms to prove someone has insurance or an employer paid for insurance. Tax on medical devices. Tax on prescription drugs. The reinsurance tax has already expired. Okay, we can keep the tax on tanning salons. Then there are a ton of minor taxes that, like the ones above, are just bad tax policy -- provide minimal tax revenue, are unfairly focused, and have a high cost of compliance. In their place will probably be a modified form of the ACA tax incentives for individuals and small employers to provide coverage. These are a cost item, as is the Medicaid expansion, which raises the common problem of how to pay for such benefits when taxpayers are not willing to fund the programs. Expect it to not be easy, and to get messy.
