The ACA ; Where Are We Going?

As of this writing, the House has passed one bill while the Senate still struggles with another version.
The sustainability of the ACA has been questioned in the past and one of the big questions remains; how can we carry on with these excessive subsidies? This blog is only about the subsidies and perhaps one idea to move the bill along.

This blog is only about the subsidies and perhaps one idea to move the bill along.
52% of all subsidies granted have had to be returned either in its entirety or partially. Meaning that 52% of Americans didn’t tell the truth when telling the ACA their income. These subsidies are being given to almost anyone who applies without them having to prove their income. Any broker can show you many cases where the subsidy was unwarranted and should not have been granted. The main reason why these subsidies were granted without proof is that those that voted for the bill wanted as many people getting subsidies as possible.

This is the hidden cost that most of Congress won’t discuss because they simply don’t know how to handle it. Once you give something to someone, it’s hard to take it back. That’s part of the struggle in repealing the ACA.
Cold, hard facts indicate that the subsidies provided cannot be sustained over a long period without raising taxes beyond where they are today. We are broke and getting into greater debt daily due to many factors including the ACA subsidies.
To further complicate matters, these subsidy overpayments must be returned only when you apply for a tax refund. The government can’t garnish your wages or force you to pay it back, but can only get the money through your tax refund. Say you owe the ACA $5000; your tax refund is $1800. The IRS takes the $1800 and you still owe $3200. That $3200 incurs interest but no penalty. So the problem keeps getting bigger as time passes. That is also unsustainable and cannot continue.

How is Congress going to fix this ever-growing issue?
The methods employed so far have only made the issue worse. What will their next steps be?
Congress needs to repeal the ACA and put a timeframe of 2 years until its demise which will give them the time to figure out how to replace it. There are so many good ideas but it seems no one is listening. Perhaps they should get a panel of professionals from the medical and insurance fields and lock themselves in a room for a week and come up with something that works for everyone?
Here is just one example of how to offer better and less expensive plans.

About 25 years ago the Las Vegas Chamber and an insurance carrier got together and came up with a chamber plan. The price per person was based on a fixed number, not age related but underwritten. So someone with no pre-existing conditions would get the best rate while those with medical conditions were rated based on their condition. The result was an almost 50% decrease in pricing for those on the chamber plan versus those who were not on that plan. It applied to small groups up to 50 lives. It worked so well that the chamber and the health plan made money. Everyone won.
When the ACA came about, the plan had to be discarded because the ACA would not insure a two person group if they were spouses. That forced those on the plan to go to the ACA for individual coverage thus ending this great option for small businesses. One Senator has mentioned this option but is not being currently considered. Wonder what other good ideas aren’t being considered?

Len Barend, The Barend Agency Inc.

702-250-2200

len@insurance4unevada.com

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