Now that Donald Trump is our new President, the Affordable Care Act will be going through many changes. There are many proposals on the table and now the new administration and Congress has to determine the new direction. Continuing along the same path will end in fiscal disaster for all Americans.
As a health insurance broker I have seen firsthand how poorly the ACA has performed. My biggest concern is the billions of dollars wasted on subsidies, website development, lower provider participation rates and simple fraud.
Let’s address the subsidy issue first. 52% of all Americans getting subsidies had to pay part or all of it back because they under estimated their income. (Can’t determine whether deliberately or by mistake?) The result is the same, many received subsidies they weren’t entitled to and had to pay it back. Unless you file taxes and got a refund there was no facility in the ACA for repayment. Perhaps this was done on purpose? (You decide) Your unpaid bill accrues interest but not penalty. Several years down the road you will have to pony up the money to the US treasury.
The Obama Administration wasted billions on website development that continually has to be fixed so it works. They hired a form out of Canada in a no bid situation because the owner went to school with Mrs. Obama. Can’t be fixed because the barn door is open, the cows are gone and closing the door isn’t going to get the cows back in the barn.
Fraud comes in many varieties; one claiming your income is lower to get a higher subsidy; Providers billing for services not performed and drug prices higher than anywhere else in the world could be considered fraud. Tighter controls on all aspects of healthcare delivery is the only way to fix it.
The Trump Administration wants to promote Health Savings Accounts (HSA’s) as a means of lowering health insurance premiums. Essentially, the insured puts money aside pre-tax to then pay for out of pocket medical expenses with pre-tax dollars. Sounds good and actually works but for those that don’t have the extra money to put away doesn’t make sense. The essence of the HSA is to have no pre-determined fixed copay for any service or drug. You pay the contracted rate for all services and it all goes towards the deductible or max out of pocket (depending upon the plan). Why pay a higher premium monthly so you can have a $25 Doctor Visit when you only go to the Doctor once or twice a year?
Current premiums have risen about 27% regardless of whether you had employer or individual coverage. At the same time the deductibles and maximum out of pocket have also risen significantly and vary by location. Additionally, premiums for younger adults have risen 44%, thus causing many younger adults to leave the plan and pay the fine. (Sometimes the fines are cheaper than paying the premiums).
Folks on the exchange are not happy; according to a recent study by Deloitte which states that only 30% of those on the exchange were happy with their plans. Astounding since those on the exchange are getting subsidies to help pay their premiums.
Then there is the issue of Providers. On the exchange there are fewer providers and many plans have what is called narrow networks. The statistics state that providers on the exchange are 34% less than with commercial plans. Fewer providers leads to longer waiting times to see the provider and could cause major health issues. Many Doctors are not accepting exchange plans because the reimbursements are too low for them to remain in business. Commercial plans simply pay better.
As you can see, all is not well with the ACA. The Trump Administration needs to very carefully figure out how to solve these issues before repealing and replacing the ACA. I am for the repeal and replacement but want to make sure the administration has carefully considered all aspects before acting. America needs this to be fixed and quickly.