https://www.wsj.com/articles/medicare-turns-health-care-prices-into-a-guessing-game-11558282907
Category: Essential Benefits under the ACA
Analysis of the ACA: A Public Policy “Devil in the Details”
Individual Health Shrinkage Drives Up Uninsured Rate: CBO Data
~Enrollment in every other major type of coverage grew or held steady~
The subtitle in the article above is correct: Enrollment in every other major type of coverage grew or held steady.
But this should not surprise anyone.
“Why“ the other major types of coverage increased, is the more important question. And examining this also reveals that the real, or net, uninsured rate probably went up much less than 5%.
The CBO data, based on their own definition of “insurance”, was destined to over-state the number of uninsured based on these data…
“CBO includes only major medical insurance that meets ACA minimum essential coverage standards in that definition. It excludes people who belong to health care cost sharing ministries. It also excludes people who are using products such as short-term health insurance as alternatives to major medical coverage.”
Nor does the number of “uninsured” mean that those folks went without care, especially those who might have cash-friendly Primary Care providers, or a Direct Primary Care physician.
And, as premiums continue to rise in the individual market we will see a shift from Unsubsidized plans to subsidized plan; and just as the data indicates we’ve witnessed a 300,000 shift in that direction.
Let’s examine some recent history as a perspective.
The first two enrollment periods after implementation of ACA in late 2013 and 2014, which also corresponded to economic recovery (no cause and effect) showed that the largest portion of newly insured (following the nadir of the uninsured rate) came from the Employer group market as hiring increased; and the second largest portion came from Medicaid and the smallest percentage from the individual market in form of ACA exchanges.
When you measure the effects directly attributable to ACA, the largest percent gains in insured rate have come from new Medicaid, followed by subsidized ACA plans. This is a crowd-out phenomenon at work, catalyzed by subsidized coverage (Medicaid expansion) on one end and rising premium prices in the Individual market on the other.
This is horrible public policy as it doesn’t promote insurance to be more affordable or efficient, it simply shifts the burden to the public sector while making premiums more expensive. And those premium increases are a direct result of regulations placed on the Individual Market: Community Rating, guaranteed issue and compression of the age ratios to 3:1, in an attempt to force it to “behave” more like the group market.
So does it really make sense to purposefully, by design, cause the price of insurance to rise and then turn around and subsidize the same product to make it “affordable”? I guess we know how they justify the name… Affordable Care Act… but there certainly isn’t any buyer protection from soaring prices!
All of which goes to show, that the net effect of the ACA has been to make the individual market UNAFFORDABLE which effectively shunts the demand into gov’t sponsored and/or subsidized coverage!
This is NOT a sound healthcare policy. But it is a very effective form of legal plunder accomplished by using the law to benefit a few special interests at the expense of the many.
Obamacare is now optional
“Wednesday’s rule reinstates and even expands the consumer protections Obama curtailed. It allows short-term plans to last 12 months, and allows insurers to offer them with renewal guarantees.
You read that right. Democrats curtailed consumer protections; Republicans are expanding them.
The benefits of Wednesday’s announcement are substantial. Various organizations, including some that oppose the new rule, project it will cover one million to 2.3 million previously uninsured Americans. Projections by Medicare’s chief actuary indicate it will reduce premiums for millions more by an average of 30 percent.
The policy change also promises more secure coverage for the sick. It frees consumers to avoid Obamacare’s price controls, which are eroding coverage for the sick. Instead, consumers can purchase consecutive short-term plans, tied together with renewal guarantees that protect them from medical underwriting when they fall ill.
Renewal guarantees can even protect some 200 million consumers with employer-based coverage, or no health insurance, from medical underwriting — for just one-tenth the cost of Obamacare plans.
When Congress passed Obamacare, insurers had just begun selling renewal guarantees as a standalone product. These policies gave purchasers the right to enroll in a health insurance plan whenever they wanted, at healthy-person premiums, no matter how sick they got in the meantime, and cost roughly 90 percent less than the average Obamacare premium. Twenty-five states approved this marvelous innovation for sale before Obama unilaterally banned it. Wednesday’s rule makes this and further innovations possible again.”
https://www.washingtonexaminer.com/opinion/obamacare-is-now-optional
Healthcare: What to Watch For
“…it is important for employers to be fully aware of what the regulations may impact them to safeguard against inadvertently putting themselves, or their employees, in an untenable situation.
It is important for an employer looking to offer an unconventional or untraditional benefit package to speak with an independent health plan attorney or CPA (not employed by the agency selling the program) regarding potential liability and compliance with federal and state laws regarding employer sponsored health plans.
Can your employee afford to reimburse the IRS for taxes not collected on an inappropriately structured HSA? Can your business afford a fine of $100 per day per employee for every day that the unqualified arrangement was offered? These are just some of the potential liabilities.”
Watch “Whole Foods’ John Mackey: Why Intellectuals Hate Capitalism” on YouTube
Who Wouldn’t Have Coverage If the Obamacare Mandate Is Repealed | The Heritage Foundation
…a recent review of the academic literature on the subject finds a mixed bag, but with the strongest link between coverage and health outcomes in cases where health insurance coverage improves access to care, “particularly among people with lower incomes and chronic conditions.”
That makes sense. Having health insurance makes less of a difference to people with higher incomes who can afford to pay for more of their medical care directly.
That leads us to the crucial, practical question that this academic debate largely misses: Who are the people that would no longer have health insurance if the mandate penalty were repealed?
Notice what CBO is not saying. CBO is not saying that those Americans will “lose” coverage. Rather, CBO is saying is that—absent the mandate penalties—those Americans, will voluntarily forego enrolling in health coverage. CBO is explicit on this point…
That explains CBO’s somewhat counterintuitive projection that, without a mandate penalty, millions of poor people will turn down the offer of free Medicaid coverage. The reason is that they don’t think they need it (because they are healthy) and if they become ill and seek care at a hospital, they know the hospital will enroll them in Medicaid to get paid. Indeed, it is also why, long before Obamacare came along, that there was a persistent and notable gap between the number of people eligible for Medicaid and the number of people enrolled in the program.
It also explains CBO’s other counterintuitive projection: that eliminating the mandate penalty will generate higher tax revenues. While not collecting mandate penalties brings in less revenue, CBO projects that there will be new revenues coming from the healthy people who decide to turn down tax-free employer health insurance in exchange for higher (taxable) cash wages. Presumably, CBO thinks that being healthy and very much alive are basic prerequisites for expecting those folks to generate additional tax revenues.
Repeal of the Obamacare mandate will not result in social catastrophe. Supporters of the mandate would have a more compelling argument if millions of poor and sick persons would be thrown out of their existing coverage, struggling with potentially fatal chronic illnesses and unable to get insurance to maintain continuous access to regular care. But that is not what CBO is projecting. Their argument is hardly compelling, to say the least, when the cohort of the future uninsured are healthy people who simply choose not to buy Obamacare coverage because they believe they don’t need it or want it.
Free Market Care – John Stossel
Imagine if you had “grocery insurance.” You’d buy expensive foods; supermarkets would never have sales. Everyone would spend more.
Insurance coverage — third-party payment — is revered by the media and socialists (redundant?) but is a terrible way to pay for things.
Today, 7 in 8 health care dollars are paid by Medicare, Medicaid or private insurance companies. Because there’s no real health care market, costs rose 467 percent over the last three decades.
By contrast, prices fell in the few medical areas not covered by insurance, like plastic surgery and LASIK eye care. Patients shop around, forcing health providers to compete.
The National Center for Policy Analysis found that from 1999 to 2011 the price of traditional LASIK eye surgery dropped from over $2,100 to about $1,700.
Source: Free Market Care – John Stossel
Obamacare Replacement Act – Senate Bill 222 by Senator Rand Paul – KY
Lots to like and consider here. We need more details about how tax equalization in the group market vs the individual market will be handled. The expansion of uses and benefits of HSAs is robust and will go along way to establishing more ways to self-insure and less reliance on networks and government programs; both are a good thing. The flexible, market-friendly Interstate Market for Health Insurance Cooperative Governing of Individual Health Insurance Coverage will be a welcome change. Again, devil is always in the details. Stay tuned for more details and insightful analysis here on the Sovereign Patient; we will post them as available.
Some highlights:
Effective as of the date of enactment of this bill, the following provisions of Obamacare are repealed:
- Individual and employer mandates, community rating restrictions, rate review, essential health benefits requirement, medical loss ratio, and other insurance mandates.
Protecting Individuals with Pre-Existing Conditions:
- Provides a two-year open-enrollment period under which individuals with pre-existing conditions can obtain coverage.
- Restores HIPAA pre-existing conditions protections. Prior to Obamacare, HIPAA guaranteed those within the group market could obtain continuous health coverage regardless of preexisting conditions.
Equalize the Tax Treatment of Health Insurance:
- Individuals who receive health insurance through an employer are able to exclude the premium amount from their taxable income. However, this subsidy is unavailable for those that do not receive their insurance through an employer but instead shop for insurance on the individual market.
- Equalizes the tax treatment of the purchase of health insurance for individuals and employers. By providing a universal deduction on both income and payroll taxes regardless of how an individual obtains their health insurance, Americans will be empowered to purchase insurance independent of employment. Furthermore, this provision does not interfere with employer-provided coverage for Americans who prefer those plans.
Expansion of Health Savings Accounts:
- Tax Credit for HSA Contributions
- Provides individuals the option of a tax credit of up to $5,000 per taxpayer for contributions to an HSA. If an individual chooses not to accept the tax credit or contributes in excess of $5,000, those contributions are still tax-preferred.
- Maximum Contribution Limit to HSA. Removes the maximum allowable annual contribution, so that individuals may make unlimited contributions to an HSA.
- Eliminates the requirement that a participant in an HSA be enrolled in a high deductible health care plan. This section removes the HSA plan type requirement to allow individuals with all types of insurance to establish and use an HSA.
- This would also enable individuals who are eligible for Medicare, VA benefits, TRICARE, IHS, and members of health care sharing ministries to be eligible to establish an HSA.
- Allowance of Distributions for Prescription and OTC Drugs o Allows prescription and OTC drug costs to be treated as allowable expenses of HSAs.
- Purchase of Health Insurance from HSA Account o Currently, HSA funds may not be used to purchase insurance or cover the cost of premiums. Allowing the use of HSA funds for insurance premiums will help make health coverage more affordable for American families.
- Medical Expenses Incurred Prior to Account Establishment o Allows qualified expenses incurred prior to HSA establishment to be reimbursed from an HSA as long as the account is established prior to tax filing.
- Administrative Error Correction Before Due Date of Return o Amends current law by allowing for administrative or clerical error corrections on filings.
- Allowing HSA Rollover to Child or Parent of Account Holder o Allows an account holder’s HSA to rollover to a child, parent, or grandparent, in addition to a spouse.
- Equivalent Bankruptcy Protections for HSAs as Retirement Funds o Most tax-exempt retirement accounts are also fully exempt from bankruptcy by federal law. While some states have passed laws that exempt HSA funds from being seized in bankruptcy, there is no federal protection for HSA funds in bankruptcy.
- Certain Exercise Equipment and Physical Fitness Programs to be Treated as Medical Care. Expands allowable HSA expenses to include equipment for physical exercise or health coaching, including weight loss programs.
- Nutritional and Dietary Supplements to be Treated as Medical Care o Amends the definition of “medical care” to include dietary and nutritional supplements for the purposes of HSA expenditures.
- Certain Providers Fees to be Treated as Medical Care o Allows HSA funds to be used for periodic fees paid to medical practitioners for access to medical care.
- Capitated Primary Care Payments o HSAs can be used for pre-paid physician fees, which includes payments associated with “concierge” or “direct practice” medicine.
- Provisions Relating to Medicare o Allows Medicare enrollees to contribute their own money to the Medicare Medical Savings Accounts (MSAs).
Interstate Market for Health Insurance Cooperative Governing of Individual Health Insurance Coverage:
- Increases access to individual health coverage by allowing insurers licensed to sell policies in one state to offer them to residents of any other state.
- Exempts issuers from secondary state laws that would prohibit or regulate their operation in the secondary state. However, states may impose requirements such as consumer protections and applicable taxes, among others.
- Prohibits an issuer from offering, selling, or issuing individual health insurance coverage in a secondary state: If the state insurance commissioner does not use a risk-based capital formula for the determination of capital and surplus requirements for all issuers. Unless both the secondary and primary states have legislation or regulations in place establishing an independent review process for individuals who have individual health insurance coverage; or The issuer provides an acceptable mechanism under which the review is conducted by an independent medical reviewer or panel.
- Gives sole jurisdiction to the primary state to enforce the primary state’s covered laws in the primary state and any secondary state.
- Allows the secondary state to notify the primary state if the coverage offered in the secondary state fails to comply with the covered laws in the primary state.
