Archive for November, 2014

The election is over and the Republicans now have a chance to change the ACA.

November 10, 2014

What to do first?

There is hope on the horizon.

There is hope on the horizon.

Now that Election Day has passed and the Republicans will control both houses of Congress what can be done to improve healthcare reform? Some desires, such as repeal, may be unrealistic based on circumstances but some are a real possibility.

We will probably see an attempt at total repeal followed by piece by piece efforts to change the most egregious or negative parts of the ACA.

Let’s look at it.

Is total repeal a possibility?  From a technical perspective the answer is yes but two things come to mind. First, the Republicans will need to be steadfast in their resolve and cautious about their rhetoric because the press – at least that portion that supports the President at all cost – will quickly vilify any effort to alter the ACA.

Second, it will take a transitional period of at least two years to make the changes suggested below and to allow the market to settle back into a market-driven healthcare scenario, but it is definitely possible. The old saying “you can’t un-ring a bell” seems to apply, but in reality the country could return to a less intrusive market-driven solution given time for carriers to build plans and people to make choices.

So, since the House voted to repeal the ACA more than 40 times, over the past four years, one must assume that in 2015 a bill to repeal will be sent to the President passed by both the House and the Senate. This may seem senseless but it will be an important act of transparency because it will make every politician stake out his/her position about the ACA.

But one would expect the President to veto that bill.

So, instead of a total repeal, we should really consider piece by piece changes. This is possible but the politicians will be inundated by both the press and lobbyists, so backbone and integrity will be required.

Let’s look at a few aspects of the ACA that could be changed and the possible effects:

  1. MLRs – Eliminate this mandate. Let carriers price, sell, and profit (or lose) from their plans benefits and efficiencies. Minimum Loss Ratios by simple math increase the premiums charged by carriers. MLRs probably sound good to those who think that this would ensure that carriers pay every claim properly but it does not.
  2. Metallic levels – Eliminate this constrictive mandate. The Actuarial Values assigned to the metallic levels limit choice and flexibility. We should allow carriers to build their plan offerings based on what the consumer demands.
  3. Mandates – Eliminate special benefit mandates such as Pediatric Dental & Vision, as well the 63 preventive benefits. There are other benefits that fall into this category but the key is to eliminate extra benefits mandated because a special or limited interest felt that it was a good idea.
  4. Fees and taxes – eliminate the myriad of extra cost such as the PCORI fee, Transitional Reinsurance fee, medical device taxes, fees associated with the public exchanges just to name a few.
  5. Public Exchanges – eliminate the public exchanges and let the private sector provide this service. The public exchanges don’t operate as efficiently or cost effectively as the private exchanges so eliminate this cost and confusion.
  6. Make health insurance premiums 100% tax deductible regardless of who pays it – this would encourage the purchase of insurance by individuals far better than the 1% penalty.
  7. SB 161 – eliminate any obstruction at the state level to small employer access to stop loss plans. SB 161 in California completely shut down this alternative for small employers which eliminated competition, increased costs, and narrowed choices.
  8. HRAs – the ACA allows for HRAs but insurance carriers often restrict their implementation. Add language that guarantees an employer’s right to implement an HRA to improve the benefits it provides it employees.
  9. Single enrollment form – a simple idea but create a single simple enrollment form acceptable to every carrier or plan.
  10. Realistic Pre-existing condition period – allow for a six-month pre-existing period for new enrollees if no prior coverage was in place for a period of 90 days or longer.

Ten simple but effective changes that would help lower premiums, improve benefits, offer more flexibility and choice as well as cover our citizens with the benefits they desire without wasting money on needless extras.

Let me know what you think.

Mark Reynolds, RHU