House Energy and Commerce Chairman Fred Upton along with Senate Finance Chairman Orin Hatch and Senator Richard Burr have outlined what is, at least for now, the Republican alternative to Obamacare. Republicans will now argue they have a better health insurance reform plan and that Obamacare should be repealed and replaced by it––particularly if the Supreme Court plunges the new health law into chaos by throwing the subsidies out in 37 states. They will have an uphill battle. Not because these Republicans don't have a lot of good ideas, but because they have put a list of big and complicated changes on the table. Lots of people may not like Obamacare but Republicans have now really muddied the waters with a huge take it or leave it alternative that will have plenty of its own reasons to give voters pause. My sense is that voters will end up liking parts of both Republican and Democratic ideas. They might ask a reasonable question: Why can't we take the best from both … [Read more...] about A Detailed Analysis of the Republican Alternative to Obamacare
A Cunning Strategy to Back Door Risk Pools and Market Segmentation Ted Cruz has offered an amendment—since included in the latest Republican Senate draft—that would enable health insurance plans to offer stripped down coverage outside the current Obamacare compliant individual market. Anytime spent covered by them would be considered a break in service and subject the consumer to the six-month lockout provision should they want to get into the standard market. Carriers offering these plans could not deny pre-existing conditions but could up-rate sicker people. Critics, including the health insurance industry trade associations, have come out against the idea because it would bifurcate the market into two separate pools—the healthier “Cruz pool” and the standard individual market subject to all of the current Obamacare consumer protections. And, while the most recent version of the Cruz amendment would require insurers to pool both their standard … [Read more...] about What’s Really Behind the Cruz Amendment to the Republican Senate Plan to Replace Obamacare?
Predictions that the individual health insurance market will now implode are misplaced. First, in the wake of the Republican collapse of efforts to replace Obamacare, Medicaid will continue on unaffected. The Obama Medicaid expansion is fully funded for years to come. The nineteen states that did not take the expansion will continue to be on the outside looking in as their taxpayers continue to fund the expansion in the 31 states that did expand. And, health insurers will continue to enjoy that growth in their business as states continue to benefit from the open-ended federal funding. The individual health insurance market will not collapse. With about 3,000 counties in the U.S., I can't give you an absolute guarantee that there won't be a few that will not have an insurance carrier serving the Obamacare market in 2018. But generally, the vast majority of people eligible for subsidies will have at least one carrier to buy from. The Kaiser Family Foundation is out with a recent … [Read more...] about The Post-Republican Obamacare Market Will Be “Stable” and Very Profitable for Health Insurers
At the core of Republican objectives for the "repealing and replacing" of Obamacare is bringing down the cost of health insurance––not just the premiums but the out-of-pocket costs people pay as well. If implemented, the Senate Republican bill may actually end up increasing costs compared to Obamacare. Clearly, if Republicans cut $408 billion in current tax credits and other insurance assistance, as the Congressional Budget Office (CBO) has estimated, someone is going to be getting less and their net cost will be more. But there is an even bigger factor at play here. Readers of this blog are likely tired of my continually reminding them that only 40% of the Obamacare subsidy eligible ever signed up leading to a risk pool with too many sick people and too few healthy people to pay their claims. The Republicans are only going to make this problem worse. My discussion with health plan actuaries has led me to conclude that Obamacare's expensive health plans could cost as … [Read more...] about The Senate Republican Obamacare Repeal and Replace Bill Will Not Reduce the Cost of Health Insurance
It won't work. Obamacare works for the poorest that have affordable health insurance because all of the program's subsidies tilt in their favor. Obamacare doesn't work well for the working and middle class who get much less support––particularly those who earn more than 400% of the federal poverty level, who constitute 40% of the population and don't get any help. Because so many don't do well under the law, only about 40% of the subsidy eligible have signed up and, with so many insurers losing lots of money, the scheme is not financially sustainable because not enough healthy people are on the rolls to pay for the sick. To fix it, House Republicans are proposing a very attractive program for the better off and, with the Medicaid rollback, gutting the program for the poor to be able to pay for it. Republicans claim their new tax credits would be enough to buy a catastrophic plan even for the poorest––and in many cases that will likely be true. But, what good … [Read more...] about The House Republican Obamacare Replacement Plan: Mind Boggling