Everyone is saying that the ACA can’t be fixed, and we need to start over. Let’s examine some of the components of the ACA and see if it can be fixed.
In a previous blog, I suggested that Congress allow all Americans to buy the same coverage they have instead of the ACA. No supporters in Congress for sure.
The major issues with the ACA are how the pricing works. Prior to the ACA the insurance companies used a 5-year rate band. 20-24, 25-29, etc. Under the ACA, the age bands were originally 0-19, 20-39, 40-59, 60-64 and 65+. Meaning that the pricing was controlled by these bands. The other issue was that the oldest bands couldn’t pay more than 3 times the lower bands. That raised the pricing for everyone to accommodate the new rules. Previously those rates did increase but not at the same rate increases of today. Males under 30 rates went from under $100 per month to over $230 when the ACA started. Today those same rates are over $300 per month and rising annually. Any new plan should consider going back to the old pricing model. It worked for many years. The ACA pricing model isn’t working.
Another issue with the ACA is everyone must have the same coverage. Maternity, pediatric dental and vision are mandatory in all plans even if the benefit is unnecessary for you. There is minimal essential coverage that every ACA plan must have even if you don’t need the benefit. As an example, why would women over 45 or 50 need maternity coverage; the same for singles and the gay and lesbian community? Perhaps some would but it is rare. Why would anyone as described above need maternity or pediatric dental coverage if childless?
These pricing matrices is based on the premise that all Americans will buy the coverage, thus justifying the rates. Since that did not happen, the premise that everyone must have the same coverage is causing the ACA to fail.
Also, there is not any out of network coverage unless an urgent or emergency and that does lead to balanced billing which is now being addressed in Congress but who knows when that will get resolved. The other issue was everyone had to have coverage until that was revoked by the President. The reason everyone had to have coverage is that the pricing would only work when everyone bought coverage so costs could be spread over the entire age groups. Meaning those younger folks who didn’t have anything wrong with them medically were paying for the sick people. That did not go over as planned as many younger people felt the fine was way cheaper than buying coverage. That affected the entire rate structure thus leading to higher premiums each year.
All these factors and other contributions to the ACA failing to provide coverage at affordable monthly premiums. The only way to provide affordable health insurance is to look at all the components that make up the pricing and see how it can be adjusted to lower overall premium
One thought is to change the parameters of the pricing model by eliminating the essential benefit mandate in the ACA. There are so many different options that the ACA should be scrapped and replaced. That’s great, but how do you do that?
The most important factor is that Congress alone cannot come up with what makes sense for insurance. They proved that with the ACA to begin with. Please remember that those that designed the ACA favored socialized medicine and the ACA was the precursor to single payor coverage. The only benefit of the ACA is that it eliminated denials based in pre-existing conditions and that is the only benefit that should not be eliminated.
One solution that came from the junior Senator from Kentucky, Rand Paul will help all small businesses including the husband and wife businesses. He suggested we allow Association health plans to be developed. Meaning an organization like a Chamber of Commerce sell coverage to small business (less than 50 employees) and allow husband and wife groups to exist. (those groups were eliminated by the ACA, so husband and wife groups had to buy the ACA individual plans). Most of these small businesses are mom and pop shops and group insurance is not affordable. So, they ended up on the ACA and had price increases so steep that the coverage was eventually dropped.
In NV all the major chambers came out with great association health plans and brokers sold a lot of these plans. Then the NY courts stepped in and declared them illegal. All chamber plans ceased to exist while the appeals were being filed. What a shame that one state could dictate to the other 49. Those on these plans can continue because they had 2-year price guarantees but will end on 12/31/2020.
These different approaches offer better coverage than the ACA with lower costs.
In order to fix the ACA, I would favor a coalition of insurance companies, doctors, hospitals and insurance brokers to begin the process to rebuild the ACA. Have several options and then bring Congress in to consider those options. If we leave it to Congress, it will never get fixed. The only condition is that pre-existing conditions must continue in any plan going forward. Everything else is a possibility for change. There really isn’t one answer to fix the ACA. Everyone involved in changing it must have an open mind and think outside the box.
I understand that some effort is being made to redesign the ACA so everyone can afford it. I hope we are all alive to see this happen. I have my doubts because it is a political nightmare and neither side wants to help the other to resolve this for the American public. They are putting politics first instead of the American public.
Medicare for All is not a good solution and will cost trillions to run and cause non-medical personnel to make decisions on who gets and who does not get services. That is usually based on age and is unacceptable to this blogger. See other blogs on my website; www.insurance4unevada to read about why Medicare for All is dead on arrival and cannot work no matter how it is presented. Those blogs clearly and concisely show the economic disaster this bill would cause and would destroy the US economy as we know it. It also shows who will lose when Medicare for All is implemented and how much more it would cost each American. Not worth the cost and it will not improve our medical coverage.
Len Barend, Broker
The Barend Agency Inc.