Avik Roy wrote an excellent piece in Forbes taking on the issue of guaranteed issue head on:
Thanks To Democrats, Pre-Existing Conditions Outweigh The Uninsured In The GOP Obamacare Deal
Should we continue letting the “ludicrously dishonest” (well stated Avik Roy) presumptions of the ACA shape the future of our healthcare delivery system?
I think not.
Prior to the ACA, 6 states (Maine, Massachusetts, New Jersey, New York, Vermont and Washington) required guaranteed issue individual plans. In 2010 these states had some of the highest individual insurance rates in the country:
There were another 35 states that offered guaranteed issue high risk pools:
High-Risk Pools For Uninsurable Individuals
That means 41 states already had access to guaranteed issue individual health insurance plans prior to the ACA.
Here’s another point… around my part of the country (KS / MO) the guaranteed issue plans available prior to the ACA were less expensive than the non-subsidized 2017 individual plans!
ACA proponents are quick to point out that there are more people insured now than prior to the ACA. What they fail to mention is that most of those gains are from new Medicaid enrollments (15 million) vs. state or federal Marketplaces (11 million):
Key Facts about the Uninsured Population
Since I don’t just want to be the one pointing out problems without offering a solution, here are my recommendations for an ACA replacement plan:
- Repeal the ACA… All of it
- Individual mandates and employer mandates would be gone (no more 1095-C forms… would anyone be disappointed?)
- All individual health insurance premiums should be tax deductible just like employer group plans are tax deductible
- Employers should be able to contribute to individual health insurance premiums or group health insurance premiums pre-tax so employees can choose to keep their individual plans if they prefer
- States should decide if they want dependents covered through age 26
- States should decide if they want to require all individual plans to be guaranteed issue
- States that don’t require guaranteed issue should be required to have a high risk pool
Since government programs are the nearest thing to eternal life we’ll ever see on earth (Reagan / Byrnes), I am assuming subsidies are here to stay.
- These high risk pools would be partially subsidized by states and the federal government to help make them affordable
- Low income people would receive reduced tax credits / subsidies to purchase whichever health plans they want (no minimum essential coverage / minimum value requirements)
Keep in mind, the subsidies could be reduced (if not eliminated) for a lot of people when the cost of insurance goes back down to pre-ACA rates.
- States should decide if they want Medicaid expansion (and be willing to pay for it themselves)
- Include tort reform legislation limiting frivolous lawsuits and capping malpractice settlements
- Include Price Transparency legislation letting patients know up front what tests and procedures will cost
And since health insurance does not equal health care, there needs to be fundamental changes to physician access:
- Direct Primary Care’s (DPC) monthly membership fees should be allowed as an eligible HSA / FSA / HRA expense (are you surprised I made it this far before mentioning HSA?)
- States should be given block grants to explore more effective health care delivery systems (i.e. HSA & DPC) for Medicaid, Medicare, and VA
Allowing healthy Americans to purchase underwritten health insurance plans at substantially lower rates has been called discrimination by some. That is true. Insurance companies discriminate.
What would happen to auto insurance rates if everyone paid the same regardless of driving records or previous accidents? Most would pay substantially higher, some would pay less.
What would happen to life insurance rates if everyone paid the same regardless of weight / tobacco use / health issues? Most would pay more, some would pay less.
Providing access to high risk individual insurance plans for the few that need it while allowing healthy individuals to purchase lower cost underwritten plans would make individual health insurance affordable again.
My HSA Guy 