As we get close to the election, it’s clear that something should be done, at the federal or state level or both, to address the shortcomings of the Affordable Care Act.
The news that premiums on the so-called Obamacare benchmark health
plans will be 25 percent higher on average next year came on the heels
of earlier reports that people in most states will have considerably
fewer health plans to choose from.
The health care consulting firm Avalere, which tracks insurer
participation in the Obamacare exchanges, says the number of insurers
offering Obamacare coverage has fallen from an average of more than five
last year to just 3.2 next year. While most of the nonprofit health
plans are sticking with Obamacare, three of the biggest for-profit
insurance corporations — Unitedhealthcare, Aetna and Humana — have
announced that they’re pulling out of many markets.
Hillary Clinton has pledged to fix what ails Obamacare while Donald Trump, like just about every other Republican, has pledged to get it repealed.
Don’t hold your breath
Hillary Clinton has pledged to fix what ails Obamacare while Donald Trump, like just about every other Republican, has pledged to get it repealed.
Don’t hold your breath
Regardless of
which one makes it to the White House, don’t expect much of anything to
actually happen, at least in Washington. Odds that the law will either
be repealed or fixed in any meaningful way are very slim. That’s because
neither party is expected to have a big enough majority in Congress for
any legislation of consequence to reach the president’s desk.
If Clinton
becomes president and Democrats regain control of the Senate, it’s
possible that some fixes could be made during the budget reconciliation
process, but there are numerous restrictions on what could be
considered.
For the record,
Clinton says she would address rising premiums by limiting the amount
of money Obamacare enrollees have to pay for coverage to no more than
8.5 percent of their income. The current limit is 9.66 percent.
She also wants
Americans to have access to a “public option” — a government-run health
plan that would compete with private insurers. Here Clinton is
supporting a proposal that private insurers hate but that was so popular
among most Democrats back in 2009 that the House version of Obamacare
contained language that would have created such a health plan. But even
though the Democrats controlled both the House and Senate back then,
the insurance industry called in enough chits to ensure that the public
option language was stripped out of the final Senate bill, and it was
the Senate version that reached Obama’s desk. You can rest assured that
the industry would be just as motivated to keep a public option from
being born during a Clinton administration as it has been during the
Obama administration.
Keep in mind that Obama also supported a public option. He still does, but can’t get Congress to create one.
Magical thinking
As for Trump,
he says that after he gets Obamacare repealed (that’s not going to
happen, but let’s suspend disbelief for a moment), he would “allow”
health insurers to sell policies across state lines, encourage more
people to enroll in health savings accounts and change the way Medicaid
is administered by giving states almost total control over the program
through block grants.
Democrats are
not keen on any of those ideas, which Republicans have supported for
years, and will continue to block them. The only way they’d have a
chance of becoming law would be for Republicans to way outnumber
Democrats in the next Congress, and that’s not expected to happen.
Even if
Republicans do retain control of both the House and Senate next year,
don’t look for Obamacare to be repealed. That’s because, when push comes
to shove, Republicans will not vote to strip 20 million Americans of
coverage they have gained because of the law. Here’s another reason it
will not be repealed: the insurance industry won’t allow it. Despite the
complaints some insurance corporations have made about losing money on
their Obamacare enrollees, they have thrived overall under the law.
The share price
of most of the big for-profit insurers has more than tripled since the
law went into effect. Those companies are actually making record profits
under Obamacare. Remember that Obamacare makes it illegal for most of
us to be uninsured. Without a public option, Americans who are not
eligible for a government-run program like Medicare or Medicaid
(Medi-Cal in California) have no choice but to buy coverage from a
private insurer. Look at it this way: If you were a business owner,
wouldn’t you be delighted if Congress passed a law requiring people to
buy the stuff you sell? (That’s why I told members of Congress during
the health care reform debate that if they passed a law without a public
option, they might as well call it “The Health Insurance Profit
Protection and Enhancement Act.”)
But even if
Trump could deliver on his campaign promises, “allowing” insurers to
sell policies across state lines simply won’t work. He would have to
force them to do so, and also force state insurance regulators to go
along with the idea.
Chickens and eggs, eggs and chickens
Chickens and eggs, eggs and chickens
Selling
coverage across state lines is already possible, and some states have
even tried it. Georgia, for example, formally invited insurers from
neighboring states to come in and set up shop a few years ago. There
were no takers. Not a single one. That’s because the barriers to enter a
new health insurance market are incredibly high.
It’s a
chicken-and-egg kind of thing. To be able to get people to enroll in
their health plans, insurers have to offer competitive premiums and
offer a pretty good provider network. To pull that off — to be able to
price their policies competitively — insurers have to get hospitals and
other health care providers to give them decent discounts. But if an
insurer doesn’t already have a lot of enrollees, health care providers
have little if any incentive to offer it much of a discount. Bigger and
well-established health plans with a lot of enrollees have much more
clout at the negotiating table with doctors and hospital executives than
out-of-state plans with no enrollees.
It is extremely
difficult for a new entrant in any health insurance market to achieve
sufficient market share to turn a profit. That’s why most of the co-op
health plans authorized by the Affordable Care Act have already gone out
of business. They couldn’t get to the point where they weren’t bleeding
red ink. Again, the chicken-and-egg thing.
Trump would make shady insurers happy and rich
Trump would make shady insurers happy and rich
The only way
insurers would be interested in Trump’s idea of “getting rid of the
artificial lines around states” would be if Congress got rid of all the
consumer protections in the Affordable Care Act and allowed insurers to
set up operations in whatever state has the fewest coverage mandates and
regulations.
Shady,
profit-obsessed companies would actually love that. They’d be able to go
back to charging women more than men and older folks five to ten times
as much as younger folks for the exact same policy. They’d be able to
once again charge people with pre-existing conditions more than
healthier people. And they be able to sell risky, bare bones policies in
every state, even if lawmakers and regulators in the other states
objected to insurers being able to sell such junk insurance within their
states’ borders. In other words, what Trump believes is a good idea is
something that insurance regulators in just about every state think is a
terrible idea. Great for shady insurers, awful for the rest of us.
What all this
means is that, unless Democrats and Republicans can set aside their
ideological and political differences and agree on how to “fix”
Obamacare, which is highly unlikely, we shouldn’t expect either Clinton
or Trump to get much of anything done. If any progress is to be made in
the foreseeable future, it undoubtedly will have to be at the state
level.
This has also been published by HEAL California. If you believe money should not be a factor in one’s health, join HEAL California to make a difference.
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