It's me again, Rob, with ideas on how to preserve, stabilize and strengthen the Affordable Care Act. This is a long one, so I know neither you nor your staff will read it, but you really should.
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Despite Secretary Tom Price's ignorant rhetoric, the Dept. of Health & Human Services confirmed last week that the ACA is "working as intended." This was followed on Monday by a new analysis of the first quarter 2017 ACA results from the non-profit Kaiser Family Foundation, which found that "Insurer financial data suggest stabilizing individual health insurance markets," and "We find no evidence of the individual market collapsing."
So we can dispense with the fiction that Obamacare is "failing" and "in a death spiral." It's not. But, operating effectively as a large group insurance system, it could be further stabilized and strengthened by encouraging increased participation from insurers and enrollees. Here's how:
1. Continue to fully fund the ACA's cost-sharing subsidies. These are not premium subsidies. Instead, they subsidize out-of-pocket costs of deductibles and co-pays for certain low-income insureds. Insurance companies cover these costs up front and are reimbursed by the federal government. Reimbursement is now in doubt due to a GOP lawsuit alleging the ACA doesn't have funding authority for such payments. The case is in limbo while you R's screw around with TrumpCare. But some insurance carriers have withdrawn from the ACA exchanges as Trump threatens to renege on these cost-sharing payments in 2018.
2. Continue to enforce the ACA's individual mandate and penalties for non-compliance. Although Trump threatened to waive the requirement, the IRS continues to issue and collect penalties from taxpayers who refused to buy health insurance. That's good. But your GOP bills would eliminate penalties on both individuals and employers of 50 or more. That would be bad -- a participation disincentive that would allow the number of enrollees in the group to shrink. Our largest group plans are Social Security and Medicare, and they're mandatory. Virtually all working people must participate and pay into them. Our approach with the ACA must be the same -- everyone benefits when the group is as large as possible. The "choice" argument made by some conservatives is bogus. So is the idea of high-risk pools to isolate those with expensive treatment needs. Think "big group!" Spread the risks over large numbers.
3. Remember the "A" stands for affordable. Maintain the ACA's premium subsidies at the current level using the existing income-based calculations. In fact, to increase the group size for the benefit of all, consider making the premium and cost-sharing subsidies more generous, not less. This would entice more people to enroll and stay enrolled, which would in turn encourage more insurance carriers to participate. Maintain the ACA's Medicaid expansion. Slashing the Medicaid rolls is unconscionable. Keep thinking "big group!" Young or old, rich or poor, healthy or sick, this is just a numbers game. Everybody into the pool!
4. Remember the "C" stands for care. So keep the ACA's benchmark actuarial value and essential benefits. Your plan to reduce the ACA's "silver" plan benchmark from 70% AV (insurance paying 70% of covered services) to 58% is a deception and bad health insurance policy. So is eliminating the ACA's required "essential medical benefits." Such tactics are included in the Senate bill so the GOP may give the illusion they've "lowered" premium costs, when all you really did was greatly reduce coverage. Giving me less covered care, then crowing about how you've saved me money is no care at all -- it's a crock!
5. Reinstate the recently-expired risk adjustment, reinsurance and risk corridor programs which helped stabilize premiums. Make them a permanent part of the ACA. Such programs are a great help to insurance companies in maintaining steady, affordable premiums.
6. Make a government-run public option plan available on the federal and state exchanges, at least in areas where only one or two carriers now participate. Ideally, a public option should be a part of the exchanges in every state coast to coast. It would improve competition and offer us a genuine choice. (Insurance companies hate this idea, but remember you work for us, not them.) A simple and easy starting point would be to lower the Medicare eligibility age from 65 to, say, 50, and offer that option on the health insurance exchanges.
7. If necessary, use government controls to stabilize participation and pricing on the exchanges.
- Require two or three insurance companies to participate on each state's exchange. Hand-pick those companies if necessary.
- Based on income tax returns, automatically enroll certain low-income individuals in an affordable exchange plan if they don't choose one on their own. Medicare does this, and it guarantees a certain level of participants.
- Require everyone purchasing individual health insurance to do so on the exchanges. Washington D.C. does this with their health insurance exchange, and it seems to work pretty well. Again, keep thinking "big group!"
- Institute government price controls on premiums as a last resort. We've used price controls during WW II, the Korean war, and in the early 1970's. It's a strong step, but it can be effective.
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