Where is the Affordable Care Act going? Does it have a future? Talk to Republicans and it doesn’t; talk to Democrats and it does.
Let’s examine it further. The mandate goes away as of 2019. The President is trying to disassemble it further by eliminating the CSR (Cost Sharing Reductions which is the government paying the insurance companies directly for those who are between 150-200% above the federal poverty level. If for example, you qualify for a subsidy and in addition to that subsidy you get a reduction in the deductible and max out of pocket based on your income. The government reimbursed these insurance companies the difference between the actual deductible and the reduced amount. This is actually illegal to do so but it was part of the ACA. Let’s say it gets stopped? What happens to those who qualified for the reduction? They end up paying the correct deductible, max, and copays. Most cannot afford that.
I’ve heard talk that the answer is buying coverage across state lines. That cannot work in the current environment because all individual insurance companies do not offer nationwide coverage. In order to buy a policy in Utah and use in Nevada, a nationwide network is required. The government cannot force insurance carriers to offer nationwide networks. So, what happens now? Probably nothing as this is not a solution but a temporary fix.
Now that we have dispelled some of the myths floating around let’s look at the issues.
- Individual coverage costs too much because everyone has to have the same coverage regardless if it is needed or not. Does a 50-year-old woman really need maternity coverage or pediatric dental or vision? Probably not but she gets it regardless because the ACA is one set of benefits fits all.
- True catastrophic coverage is only available to those under 30. Why is that? Why not make it available to everyone so they can pick the plan that works for them? Government interference is the reason. They decided that everyone had to have the same benefits regardless if they used them or not. Make real catastrophic coverage available to anyone that wants it. If you are healthy and only go to the Doctor once or twice a year, why do you need fixed copays for Doctor Visits?
- Eliminate the subsidies because they are bankrupting the country. 52% of all those getting subsidies has to return part or all of the subsidy because they underestimated their income; most deliberately. They did it because it meant a higher subsidy from the government. To add insult to injury, the only way to repay the difference is to have it taken from their income tax refund. What if they don’t get a refund? The amount owed keeps growing due to interest but no penalty. So 5 years down the road that amount owed is doubled or tripled or worst and you still aren’t getting a refund. How does it ever get paid back?
- A more realistic approach would be how Medicare gets additional money from its recipients. It’s based on income earned two years ago. So in 2016, your income was above $170,000 for a married couple filing jointly. They get taxed on top of their Part B premium of $134 per month to offset their high earnings. Simply apply that principle to the ACA. Your subsidy is based on your income tax filed two years ago. We don’t need 16,000 additional IRS agents because no one is getting any more than they are entitled to because their taxes have already been filed. No interest charged, no owing the government money. Most people will not have to repay any money. Of course, there needs to be a procedure for those actually earning significantly less this year than they did two years ago. I believe that can be worked out to everyone’s satisfaction.
- There are other things that can be done to reduce the high cost of insurance. Tort reform is one such idea that would help curb the high cost of insurance. Probably won’t happen as there are too many lawyers in Congress. Add reducing the high cost of malpractice insurance and we are making progress. Again, too many lawyers in Congress.
- How about requiring the medical community to be paid based on results, not number of visits. That allows those who provide quality care to be reimbursed greater than those that simply work on a number of patients. That would reduce insurance costs thus reducing the cost of insurance.
There are many other ideas out there to consider gut Congress is not moving in any direction other than to ask for Medicare for all. That would bankrupt this country so fast you wouldn’t see it coming.
What is needed is a commission of insurance company executives, Physicians and other medical professionals and insurance brokers and of course Health and Human Services personnel. Bet they could find a common ground that would make sense? Let’s face it, Congress passed the Affordable Care Act as a precursor to a single-payer system. Chuck Schumer admitted that on national TV. That is not the answer, just look at the Post Office, Medicare, and Social Security to see what government can’t seem to do. Run something without bankrupting it. Not good, is it?
It’s time to get this moving as the longer we wait, the harder it will be to fix it. Insurance premiums are growing faster than inflation with no end in sight.
The Barend Agency Inc.
Len Barend, broker