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Where to on health insurance?

November 30, 2016

While the liberal-progressive freak-out continues, some people are already asking more serious questions related to the rapidly coalescing Trump Cabinet.

With his pick of Dr. Tom Price as HHS secretary, President-elect Trump seems to be poised to make good on one of his most visible campaign promises, repealing and replacing Obamacare.

Representative Dr. Tom  Price (R-GA) has been working on alternatives to Obamacare almost since the day it was signed into law.   With any luck, Congress should have a bill on President Trump’s desk within 30-60 days of the time he takes the oath of office.

That’s both good and bad.

After the economy, and inextricably intertwined with it, Obamacare was one of the big three most visible campaign issues.

For all that many people have found the Affordable Care Act to be the Unaffordable, No-care, No-work Act, there are a lot of people who are just happy to have any kind of coverage.  They are scared to death that they will lose what little they have in the post-election political maelstrom.

So, what does the new HHS Secretary envision to replace it and what makes him qualified to judge?

Dr. Price authored the Empowering Patients First Act  (HR 2300 at the time, now HR 2519) in May of 2015, posting links to the  complete text  of the 242-page bill on his website, and there were some significant objections even at that time. A shorter synopsis is also available on the site.

With the seating of a new Congress on  January 3, 2017 the bill will have to be reintroduced, possibly leaving room for yet a new iteration.

The most commonly heard previously registered complaints were that as a doctor and a politician, Dr. Price didn’t understand health insurance from the user, i.e. the patient perspective.

One of the most significant complaints was that his plan relied on partial tax credits, which were often not sufficient to pay for any family health plan available on the open market at that time.

Other Federal help would be furnished as block grants to the states, presumably to shore up their Medicaid programs.

The other was his insistence that it was the citizen’s duty to put back enough money to pay for “routine” testing and care and reserve the insurance for more serious ailments, making huge deductibles and exclusions a built-in part of the plan.

Given that most Americans can barely scrape together $1,000 now for emergency use, and the number of people who are in the black hole between subsidized premiums and the ability to pay for all of their own premium costs, the Price plan raised many questions.

One cornerstone most of the repeal-and-replace efforts have incorporated  is some form of Health Savings Account, but even those semi-voluntary accounts are strictly government-limited.

With even a simple battery of diagnostic imaging tests often running into the thousands of dollars, and even routine office visits and their associated costs now running over $200, limiting the amount that people can set aside does not and never did make any sense.

Equally ridiculous was the “use-it-or-lose-it” concept, which left no option to let the account build up or receive one-time deposits to cover as much as the first $10,000 of care, which is now often a family’s “normal” out-of-pocket cost.  Balance restrictions also apply to the Price plan (Section 113).

Perhaps Representative Price doesn’t know it, but many, many  “insured” people don’t go to the doctor even when they need to, solely due to the effect of Obamacare.  After all, by the time they pay anything from $2000 to perhaps $10,000 in premiums for their “free” healthcare, who’s got the money to pay out another several thousand in non-covered charges due to high deductibles?

Nothing in Dr Price’s plan was seen as doing much to alleviate that problem.

True, it does state that the tax credit could be “advanceable.”  That’s great if $1200 will buy you an individual policy.  Considerable research does not turn up any $1200/yr.individual plans.

Considering that the cheapest “Blue” plans for single people over 50 tend to average over $600/month, the $3,000 subsidy for older Americans isn’t very useful either.

That’s not to say that the 2015 and ’16 bills did not have some good points, for individuals and for  employer-based coverage.

It gets rid of the “penalty” for not purchasing insurance, has some attractive tax benefits, does allow for a rollover to a spouse or child and protects the funds from seizure in a bankruptcy.

In addition, it has some very interesting upgrades for those with employer-based insurance, such as allowing employers to subsidize coverage from any insurance company, rather than binding the company and the employee to one insurer.

It also includes an option (not a requirement) for the insured to opt out of the 7.53% payroll-based government health care payments, which might appeal to employees more toward the upper income ranges.

It is much too early to speculate on other impacts of the appointment, should Dr. Price be confirmed, but he is known to want to overhaul Medicare and Medicaid significantly.

That leaves a lot of people wondering what’s wrong with expanding the concept of Medicaid to encompass most of the low-income population, and letting the rest of the market exist pretty much as it did before, sans the geographic and pre-existing conditions restrictions.

Whatever the final legislation looks like, it is unlikely to fully take effect for at least two, and probably three or four years, simply due to the mathematical and legal complexities of changing the whole system again so soon.

It’s at least reassuring to know that at least one side of the political spectrum has something more useful to worry about than what cable news show is playing in bars and restaurants.

From → op-ed

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