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Can Maine fix Obamacare?

May 3, 2017

They say that states are the laboratories of democracy. Maybe for government run healthcare too?

First, everyone needs get over the shock of that phrase.  Like it or not, the government has hijacked the private health insurance marketplace, and by extension, the healthcare system.

Assuming we wanted to go back to a totally free market system, it would take years to unravel the damage done by Obamacare.

Second, enough people have obtained at least a modicum of health care accessibility, mostly through Medicaid, to generate strong support from the sickest and most vulnerable citizens, i.e. those with pre-existing conditions.

Even the most rabidly partisan right-wing groups can’t justify simply ending that care without providing any kind of safety net. Republicans have pre-existing conditions too.

If we accept that the government is now irrevocably entrenched between you and your insurance agent, and by association between you and your doctor, what comes next?

Obviously, there needs to be some sort of model that assures accessibility to care for everyone without breaking the backs of some to provide care to the relatively few.

The state of Maine may provide at least a partial answer.

President Obama was fond of saying that the ACA was modeled “almost exactly” after Massachusetts’s attempt at a government run system, and now Vice-President Pence is claiming much the same legislative state DNA for the AHCA, attributing it’s skeleton to Maine’s brief but apparently effective “invisible high risk pool” .

It’s the “almost” part that seems to be the hang-up.

The proposed Federal Invisible High Risk pool or FIHRP, per a study published April 17, 2017 makes several assumptions based on the current ACA or Obamacare costs and includes a disclaimer that should any of the data points upon which these assumptions are made change (and they have), the projections are then null and void.

Since this is a blog and not a peer review, you are encouraged to go read the paper referenced above, known familiarly as the Milliman Report and commissioned by the Foundation for Government Accountability, for yourself. Pay particular attention to the cost charts and Exhibit A.

The important thing to take away from this is that Maine had a workable mechanism  to deal with the added costs of insuring people with health conditions known to be expensive to treat over the insured’s lifespan.

It’s the reason that President Trump can quite honestly say that the new AHCA does have a provision to cover pre-existing conditions.

The general goal is to bring down the cost of the premiums to a level that will entice everyone to opt into some sort of health insurance coverage.

Under this model, the insurance companies would still “rate” high risk patients, and would have considerable say in what those people are charged for premiums, but they would potentially cede most of those premiums back to the government to help pay for treatment.

Maine’s governor, Paul Le Page, in an interview on Fox News on May 3, offered his opinion that the way the funding, i.e. the premiums, to actually pay for the care is handled differs substantially from Maine’s plan. The Federalist also notes that that the Federal model differs significantly from the Maine plan.

Like Medicare  and Medicaid, the Federal legislation would impose de facto price controls on treatment costs, making it probably no more palatable to physicians than the old ACA or any other Federal reimbursement scheme. That solution could potentially leave in place high deductibles and out-of-pocket costs.

In other words, somebody skimmed the cream from the Maine plan and left the rest of us with the 1% skim milk  version.

In contrast, Governor Le Page noted that Maine required collection of a  $4.00 surcharge from every person insured, and required 90% of the high risk premiums to be deposited in a fund, or pool. The $4.00 surcharge applied to all insured people, including those with employer coverage.

Although the Maine plan was only active for the 18 months or so before the Obamacare state and Federal exchanges were up and running, it got good reviews for lowering premium costs and encouraging insurance companies to provide several types of plans.

Not so popular was that older people still paid a lot more for their coverage, at precisely the time in life when many were contemplating retirement on a fixed income and when job prospects were substantially curtailed. Also less than popular was the control insurers had over premiums.

At this point in history, it is obvious that just getting coverage to low-income and high risk patients, via state-run high risk pools, would have been far better than a wholesale take-over of the  health insurance market by the Federal government.

It would have also been less disruptive, since according to the Kaiser Family Foundation, 35 states already had some form of high risk pool coverage mechanism.

In short, repealing and NOT replacing Obamacare could potentially have led to better outcomes for all of us.

Given the poisonous political climate, that’s never going to happen. There is too much political scorekeeping going on for that common sense solution to ever fly on its own.

Still, if people in Congress are going to say they are using the Maine model then it would behoove them to copy it more faithfully. No matter what model gets adopted, it HAS to generate enough funding to pay claims.

That’s not to say that the Maine model can’t be tweaked.  For instance, the $4.00 surcharge could be extended to everyone. Even government controlled direct payment programs that do not already provide access to medical care, such as unemployment insurance, Pell grants, ADC, etc. could be docked $4.00 a month. That would free up already approved program funding to be applied to health insurance. Exceptions would be  Medicaid, Medicare and private pension plans that already offer insurance.

The reason the AHCA is not moving forward is not just partisan politics. It still has some serious shortfalls.

The Maine model is not a panacea, but paying at least a modicum of attention to what worked there and what didn’t could finally move the health insurance debate forward.

From → op-ed

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