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About that Health Care Thing...

November 12, 2016

 

Let me try to make this as simple as possible.

 

The Affordable Care Act (Obamacare) did a lot of things.  Here are just a few:  It set up state-based exchanges so people could compare and contrast private insurance plans. It allowed people under the age of 26 to stay on their parents’ insurance plans. It lowered the out-of-pocket costs of prescription drugs for seniors on Medicare. It expanded Medicaid. And it said insurance companies no longer could refuse people coverage based on so-called preexisting conditions.

 

Republicans now say they want to keep parts of the law but scrap others. One they want to hang onto in particular is the preexisting condition ban. They want insurers to have to cover everyone who wants to buy insurance.

 

But at the same time, they want to get rid of the requirement that everyone buys insurance (the mandate) and the subsidies (help people get paying for their health insurance if they make less than 400% of the poverty level and buy through the exchange).

 

What do you think will happen then?

 

Insurance companies don’t want to cover sick people. They lose money covering sick people. The mandate was the bargaining chip that allowed the preexisting condition ban to happen. Insurance companies said, “Fine, we’ll take everyone, but you have to require everyone to get into the pool – sick people and healthy people. It’s the only way we can survive.” Take away the mandate, and insurance rates soar. You think it’s bad now? Just wait until Republicans try to eliminate the provision that got insurers to play ball in the first place.

 

So now you have skyrocketing insurance rates and you want to get rid of the subsidies? Great. That means all of the people getting help paying for their health insurance now have to pay whatever the insurance companies want to charge without any assistance.

 

Republicans say letting insurance companies sell across state lines will increase competition and drive down prices. This is a terrible plan for many reasons:

 

  1. Consumer protections are state based. Get rid of the state lines and insurers all set up shop in the state with the least regulation. Why do you think so many credit card companies are set up in Delaware?

  2. Insurance networks are state based. Pricing is state based. Cost of living varies from state to state. Let’s say you live in NV. You may be able to find a less expensive plan in CA but you aren’t likely to find a doctor or hospital in NV who takes your insurance. Your coverage is useless if everything you need it for is considered out-of-network.

  3. Insurance companies make money by not insuring sick people and then by trying to find ways not to pay for medical care when healthy people do get sick. They don’t want your business if you’re sick. They have no incentive to compete for your patronage. And the markets are so consolidated that only one or two insurers hold a monopoly in any given state. So they don’t compete to drive down price. They compete to see how much the market will bear. The idea that insurance companies – whose legal obligation is to make as much money for their shareholders as possible – will want to slash prices to get the business of the people who need insurance the most is ludicrous.

 

Now, let’s talk about using high-deductible plans with Health Savings Accounts. HSAs are convenient tax shelters for rich people but make no sense for the rest of us. High-deductible plans mean you have to pay a lot of money out of your own pocket before your insurance kicks in. Most Americans don’t have extra income they can set aside now just in case. And the thought that people will be more conscientious health care consumers if the first dollars they spend are coming out of their own pockets is flat out wrong. No one shops for cost in a medical emergency. You don’t break your arm and think, “Hmmm, let me call around for the cheapest cast.” You go to the closest ER, ideally one in-network with your insurance plan. And when people get sick and have to spend completely out of pocket for health care, they tend to avoid getting health care. What happens then? They get sicker and end up spending more in the long run. We as a nation end up spending more in the long run.

 

No, what we have now isn’t perfect. I’ve never defended it as such. But the ACA is an improvement on what was happening before, and I believe if we keep going, we can do even better. If we put partisan politics aside and let really smart people who understand how our health care system works get together to design a way to improve it away from the influence of corporate lobbyists and special interests, we might be able to achieve something great.

 

Until that happens, the best we can do is help people understand what politicians are talking about when they threaten to “repeal and replace” the ACA. It’s a lot more complicated than the catchphrase suggests. Take a moment to listen to what the people who have been fighting for reform for years – in some cases, decades – have to say. I promise they know your pain. They’re on your side. They want to make it better too. And they know that you can’t pick and choose the good stuff, get rid of the less popular parts of the law, and somehow it all magically just works out.

 

How about this idea? Let’s repeal and replace the stale rhetoric surrounding the ACA and start talking about what it would take both to expand access and drive down cost. You know, what we set out to do with national health care reform in the first place.

 

 

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