Why do Politicians inject so much Government control into Healthcare Reform? Is it an addiction? Let’s see.

Before we start we must first agree that no one understands to much about the American Healthcare Act (AHA) which the Republicans presented yesterday as a replacement for the ACA.

Will there be just this single bill collaborated upon by the varied opinions within the Congress? Or will we see multiple bills offered by competing politicians each thinking theirs is the best? Or will it become a series of smaller bills designed to focus on specific segments of the healthcare delivery and finance system?
The one fact we know is that until yesterday we had seen nothing  except “talking points”.

I have read the bill twice so far. I know what you’re thinking but I had the time and I’m interested. One thing seems consistent and that is the Government’s “hand” in determining how too & how much. Why do they do that?

The Government needs to do just a few things then get the hell out of the way.
You’ve read our ideas about how to fix the system in previous posts.
In this bill they did not do enough “repealing” and not enough “replacing”.
Here are just a couple thoughts:

  • Make health insurance premium 100% tax deductible for anyone who pays it.
    • Their attempt at this in the AHA is admirable but confusing as it discusses monthly credit amounts and monthly limitations. It could be simply “If you pay for it you get to deducted it on your taxes.”.
  • Make all plans for individuals and families guaranteed issue with no pre-ex.
    • They eliminated the mandate penalty and opted for a surcharge on premium of 30% if coverage is not continuous. This will not do the trick for insurers.
  • Eliminate benefit mandates:
    • EHP Sunset in 12-31-19, which is good.
    • Insurers free to offer any plans they desired as of 10-1-17. But, this is questionable because the AHA still refers to “credible coverage”.
  • Eliminate rating restrictions and obstacles. They missed this one:
    • AHA changes premium ratio allowed from 3:1 to 5:1. Not enough.
    • Prior to ACA the ratio was as high as 8:1 which is better.
  • Left the Medicare expansion for states & tax credits below the poverty line:
    • They did both and allow “expansion states” to continue Medicaid until 1-1-20.
    • “Non-expansion” states will give eligible members monthly refundable tax credits.These will be set up to pay directly to insurers by 1-1-20. It is just a slight twist in the approach to subsidies used on the ACA.
  • Did not include:
  • ERISA Pre-emption to allow carriers and plans to sell across state lines.
  • ERISA Pre-emption to stop state legislatures from stifling stop loss plans for small employers as done in CA, NY and other states.
  •  NO new benefit mandates from states or Feds for five years. It’s unclear how much freedom insurers will have to build plans the market demands.
  • Make HRAs and MERPs available to implement on all plans.
  • Allow carriers a reasonable corridor for Risk Adjustment Factors.
    • So, the underwriting will be Guarantee Issue but the rates will remain higher than needed because carriers have no protection against adverse selection.
  • All insurers must publish and release statistics and experience data.
  • Tort reform: Loser Pays and/or Fixed Attorneys at 15%.
  • Health plan commission set at level 7% and does not increase as premium does.
  • Providers must post their rates per service. Hospitals must post their outcome statistics as well as infections, error rates, and other outcome data.

They included language about wellness and prevention but it is not clear as it refers back to current language, which would be ACA language. Let’s hope they don’t get entangled in clever wellness and preventive health strategies. Unless we are going to get serious about tackling the two biggest issues affecting healthcare cost, that being smoking and obesity, then  pushing wellness will be like pushing a rope up hill.

It’s said that one should not go grocery shopping when one’s hungry. I guess it should be said that one should not write a Blog Post when one’s fed up, right? But it is difficult to not be frustrated with a Congress that over 7 years voted 50+ times to Repeal & Replace as well as campaigned for re-election promising R&R but deliver very little.

It’s complicated for sure but after 7 years one would think that a replacement plan would have more meat on the bones. The AHA offered will need huge changes to be acceptable to the folks and that time will give more opportunity for special interests to get their fingers into the design.

In previous Posts we have laid out a number of issues and ideas to repair our system, bring down costs, and provide better benefits. The Republican American Healthcare Act includes just a few of those ideas. Let’s all hope that we witness some statesmanship from our legislators in the coming weeks as it will be needed in order to carry this bill through..

Anyway, that’s my 2 cents worth. What do you think?
And remember, we’re all in this together.

Mark Reynolds, RHU
559-250-2000
mark@reynolds.wtf

 

2 Responses to “Why do Politicians inject so much Government control into Healthcare Reform? Is it an addiction? Let’s see.”

  1. Joanne Calhoun Says:

    I am disappointed they needed to fix and replace some things, I think “making people and businesses accountable for folks having insurance is crazy they are grown ups and should have the brain to get insurance. If they want to make it affordable they should consider how much money people make. For instance you have those who are 70 years old and can afford 500.00 premiums and you have those in that age bracket who can’t afford 50.00 a month, it should be by affordability not age alone.

    And get rid of the 1/4 and 1/2 employees that make a small business get fines like a large business. But not other benefits with the large business fines. It’s crazy if you have a part-time person who gets more hours because of a staffing shortage you will have to offer insurance then they go back to the normal hours and what you cancel them out? It’s so much work for very little return for the folks who still have to pay the premiums.

    I only hope they come to their senses and not make a bad product even worse. They really should have had a team of professionals not just politicians making these changes without the help of medical, and insurance professionals. We shall see another scheme that will leave the insured scratching their heads.

  2. chrstian63 Says:

    Hey Mark, another great post! I think we should amend the US Constitution forbidding any taxes on any money used for Health Care. No tax on premiums or expenses – period.
    This would instantly reduce costs and many laws and rules on the books would become useless thereby simplifying our industry. Most of the complications come from avoiding taxes. So if there were no taxes think of all the crap employers and individuals have to do now becomes nada.

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