The news from the White House is the “replacement” isn’t going to appear until the end of this year – or perhaps sometime in 2018.
That’s a very good thing.
For those that have been following our ACA Deathwatch, that is no surprise. In fact it’s a good thing, as the plans proffered by Ryan, HHS-Secretary-designee Price, and various other Republicans are short on details, conflict with Republican Governors’ wishes, and would result in major disruption to health insurance markets and imperil the Medicare Trust Fund.
There is no consensus among Republicans around key aspects of a replacement plan or the timing thereof. The White House’ latest announcement is at odds both with previous statements that the replacement bill would be released right after Tom Price’s confirmation as HHS Secretary, Speaker Ryan’s commitment to introduce a bill in March and Majority Leader McConnell’s promised timetable.
Here are the key problems facing the Repeal-and-Replace crowd.
- ACA is NOT a bunch of totally separate and stand-alone laws, regulations, fees, taxes, policy requirements, and standards. The fees, taxes, and reimbursement changes provide funding for Medicaid expansion, Seniors’ drug costs, premium support, technology, guideline development, and hundreds of other initiatives, many close to the heart of really powerful constituencies.
Republican leaders who once hooted at the length and complexity of the ACA bill are now learning that fixing healthcare is, shockingly, really complicated. - Republican Governors are quite concerned that a replacement will drastically cut funding they rely on for Medicaid, community health centers, public health, and other budget-critical programs. They expanded Medicaid based on a promise that the Feds would pay almost all of that cost; none of the plans currently under discussion live up to that promise.
- AARP is marshalling its very large and very vocal membership to complain about higher premiums for the 50-64 year old group that would result from changing age bands and reductions to Medicaid that would hurt dual-eligibles.
- Budget hawks are stuck because repealing ACA – or even just the taxes that are part of ACA – would lead to Medicare insolvency as early as this year.
- Most troubling of all – loss aversion. Now that people have coverage, they will be furious if Republicans don’t deliver on their oft-stated promises to reduce costs, preserve coverage, and expand choice. And no, the attempts by politicians to wordsmith their way out of this commitment by talking about “healthcare access” and “access to insurance” will NOT placate voters who lose coverage.
This last is the key.
The political cost to Republicans of failing to deliver on an impossible campaign promise will be high indeed. For now, they are going to push the deadline out as far as possible, perhaps pass a repeal-in-name-only bill, then wait till after the mid-term elections – or even the next presidential election – before doing anything serious.
What does this mean for you?
Republicans won’t pass and sign a true repeal bill for months.
They have even taken up new language to discuss the healthcare law. Now it’s repair and replace rather than repeal and replace.
I have read and heard rumors that the mandate will no longer be enforced. Is that true? If so, I could save $200/month! I would love to drop the “take from the middle class” rider that I had to purchase with my insurance. It is discouraging that it is going to take years to change or repeal Obamacare. How is the bleeding going to stop? It somehow needs to stop. Millions of Americans are getting killed with their high premiums.
Hello Spencer – What “take from the middle class rider” are you referring to?
I’d note that private insurers are the ones setting the rates,deductibles, copays, and coinsurance. Do you purchase your insurance via the individual market?
I had my wife and kids put on a group plan and in order to be ACA compliant I had to also purchase a $200 “rider” for the plan. Did I get duped? They said I needed it or I wouldn’t be ACA compliant and would get fined later when I did my taxes. I would love to be able to drop that. I get that insurance regulates the costs but when government gets involved then the people get dumped on. It isn’t like the insurance just takes the hit. Doesn’t it work that way on most things? For example the tax on sugar drinks in Philadelphia. The cost is being put on the consumers, not the soda companies. Maybe that is a bad comparison. Anyway I am just frustrated and hurting due to the ACA and many of my friends and family are as well.
Spencer – this does not sound reasonable. ALL health plans have to be ACA-compliant; you cannot purchase a plan that isn’t. So, forcing you to pay more to be compliant under threat of a fine does not sound accurate.
Here’s a site with details on AZ essential health benefits – required for all plans – https://www.cms.gov/cciio/resources/data-resources/ehb.html#Arizona
I’d suggest the “government gets involved people get dumped on” isn’t entirely fair. The reason for the essential benefits is to ensure people with mental health or substance abuse issues can get treatment, that those with pre-ex are covered, that maternity is covered, that there are no annual or lifetime limits on treatment for specific conditions or all conditions, etc. While some may see these as unreasonable, others see these as lifesaving rules that prevent insurers from denying treatment to those who need it most.
Thanks Joe. I will check out the site.
Yeah I don\’t think anyone has a solution on how to make Health Care fair for everybody. It would stink to have a pre-existing condition or not be able to get health insurance. It\’s also unfair to take from others. I think we do agree that there is a lot of abuse in the healthcare system which makes costs high. Hopefully the Republicans can figure it out. I would hope all work together in it.
Many school districts were allowed to grandfather in non-compliant plans, I know because my wife and our family have one. So there might be more out there. Never the less, the outrageous out of pocket and annual deductibles make the insurance a non-starter for many of us that still work for a living. The political and the insurance side of this are doing great, we are not! Insurance is about spreading risk equally amongst ALL the participants in the plan. In ACA some animals are more equal than others.
HI Tony – thanks for the note.
couple observations – insurers have lost a lot of money in the exchanges; while they are doing ok in the rest of their businesses (generalization I know), the exchange and individual markets have hammered them.
re spreading insurance risk – alot of the components of ACA were designed to increase the risk pool; the mandate, subsidies, penalties, essential minimum health benefits, 3 age bands etc were specifically intended to increase participation. Unfortunately with states blocking Medicaid expansion and others refusing to allow aggressive marketing of ACA plans, along with the falsehoods put out there by opponents, it’s not surprising the risk pool isn’t as large as we need.
Spencer,
Based on what you’ve described, it sounds like the Group plan that your family is on is not ACA compliant. The ACA mandates a minimum level of coverage. This was to help lessen the number of people who were underinsured. If you purchase insurance that does not meet that minimum standard, you would still have to pay the fine at tax time. The rider you have purchased should provide additional coverage that brings your plan up to the minimum required by the ACA.
The insurance exchanges in the ACA have a rather straightforward goal:
– they offer community rating and guaranteed issue.
Therefore sick persons will flock to them to get health insurance at standard rates (just to get insurance at all!)
– This creates huge costs for the insurers.
(always has, look at any of the states which offered guaranteed issue in the 1990’s)
– To hold down premiums, the insurance exchanges must get a huge number of healthy persons who do not file any claims… up to 8 or 10 healthy ones for every sick one.
Here is my point:
There are enormous numbers of healthy persons who have found a way to avoid joining the exchanges, including:
– grandfathered plans
– exemptions from the mandates
– short term health insurance
– staying on parents’ plan to age 26
– just paying the small mandate penalties
The above numbers are in the millions, and account for the death spiral on most exchanges.
The Republicans realize that healthy people do not want to be pooled with the sick, and will cater to this desire. As you point out, Joe, chaos may follow.