This month brings us a new president who has pledged to change the Affordable Care Act, aka Obamacare. The details of the changes are yet unknown, but I wanted to give you some background in case you’re concerned.
What problems does Obamacare try to solve?
- Too many uninsured individuals without access to preventative care. Many were using costly ER resources (and not paying for them).
- General health care costs too high.
What is the Obamacare “solution”?
1. Access to health insurance is made universal and everybody is required to get it:
- 65 or older… MedicareLow income… Expanded Medicaid
- Sick… Preexisting conditions now covered
- Employees… Through work if 50 or more employees
- Middle income… Through exchanges with subsidies
- Others… Standard priced individual market
2. Plans are standardized:
- Ten essential benefits including maternity, mental health, etc.
- “Choice” is limited to network, share of cost and price.
How does Obamacare pay for millions of new and sick insureds?
1. Charge younger, healthier and wealthier people more to subsidize older, sicker and poorer people. Plus subsidize the whole thing through the taxpayer.
2. To reduce cost, establish more central control of the health care system which meant less discretion and more administration for doctors and insurers.
How was Obamacare “sold” to the American people?
Some form of universal health care has been accepted as an objective in advanced countries such as Canada and the UK. Those nations have made a legitimate choice to restrict level of care to offset the cost of covering everyone. Unfortunately this difficult tradeoff was not transparently debated for Obamacare; instead it was sugar-coated. Everyone agreed Obamacare would result in more insureds. But they were famously told “if you like your plan you can keep it” which was not true. They were also told premiums would be lower, there would be lots of choice, you could keep your doctor and health care costs would be lower.
Obamacare Results and Issues
Millions of people previously uninsured are now insured. But millions of people who liked their old plans saw them cancelled (because they didn’t meet the standardized requirements). Standard premiums are going up by double digits and deductibles are painfully high. And choice is being reduced as insurers can’t make the numbers work… some counties now only have one provider. The economics of Obamacare as it’s currently configured do not appear sustainable.
Changes on the Horizon
It is unlikely Obamacare will be completely tossed out. Certain provisions, like allowing for preexisting conditions, are very popular. Some changes being considered are:
- Use federally funded “high-risk pools” for the sickest individuals to help stabilize normal risk pools for insurers.
- Provide some flexibility on mandated benefits (so older people might not have to pay for maternity for example)
- Grant a tax deduction for individuals buying insurance so their cost is more in line with insurance provided at work which is deductible to the employer
- Promote the use of Health Savings Accounts to reward healthy behavior and help people deal with the high deductibles associated with Obamacare plans.
At Desert Insurance Solutions
Health insurance has never been so complicated, and with all the pending changes it’s a moving target. You need the right advice. To help navigate this sea of change we’re pleased to have Colleen Flores on staff… she’s our health insurance expert. She works with individuals and businesses with group plans. For individuals the window for open enrollment is closed until November, 2017. But small businesses can take action now… if you own one and would like a free insurance review, give us a call. In recent weeks we’ve found ways to set up group plans for several businesses whose previous insurance provider could not. We want to be the “solution” in Desert Insurance Solutions!
My closing thought is a hope. The Democrats built some good aspects into Obamacare. The Republicans have some good ideas to improve health insurance. No plan is perfect and there is no free lunch. My hope is our leaders put politics aside, negotiate in good faith and come up with something that both works and is affordable for our country. Our health is too important to be a political football.
This site is informational and not a substitute for professional advice. Insurance coverage is subject to the language of the policies as issued.