Tuesday, January 17, 2017

Where Trump has it right on health care insurance (updated)

Donald Trump announced a worthy goal, that everyone in the US should have health insurance, and it ignited a firestorm in the GOP, with a Congress that seems to be hell-bent in reducing the numbers who have insurance through Obamacare.  They were wringing their hands, too that Trump was planning to take on the powerful lobbyists of the drug industry, since a great deal of the cost of insurance and the health care system in general was due to rising drug prices. Trump also demanded that repeal had to have a replacement nearly simultaneously.

Recently Donald Trump indicated a slow down to next year in providing a placement plan. Reality is setting in that moving from a campaign slogan to a plan that meets his goals is not that easy and he is wise to look before he leaps. Immediately, House Speaker Paul Ryan said Congress will not wait, but find a replacement this year, underlining in nine years, they could not agree on a replacement and will have a difficult time now.

Many GOP politicians ran this year on a platform of repealing Obamacare, they won, and they believe they have a mandate to repeal Obamacare, in spite of polls showing that only 18% favor repeal with no replacement those same politicians could not agree on a replacement. In fact, their plans to repeal but not tell consumers what the replacement would be until after the next election cycle was shot down by Trump. The mandate is to replace it,  and/or  fix (repair) it, but with what quality at how many covered at what cost are questions still hanging.  The  legislative challenge  is how can the GOP  get enough Democrats on board to avoid a  Senate filibuster over replacement details.

Paul Ryan, House Speaker, in a briefing February 7, is pressing forward on repeal/replace, whether or not the Trump administration has their plan. Their pitch: Obamacare is failing anyway, so they will come up with a better plan. If the plan is like prior proposals the GOP has made, what they have in common is that their plans would fail even worse than they claim about Obamacare, discriminating against women's health, and not disclosing how many would get any premium support via a tax credit, or what the impact would be on the actual cost of their proposal.

The policy challenge is how they can find ways to finance a plan that meets their goals without blowing the deficit out of the water and without removing insurance from 22 million who benefit directly now and everyone else indirectly from required standards for all health insurance, public, private and employer provided.

For those who gloss over the iimplications on the defict of any fix should recall the Simpson-Bowles commission The Simpson-Bowles bipartisan deficit reduction commission examined the relationship of Obamacare to the deficit and recommended “Controlling health care costs by maintaining the Medicare cost controls associated with the recent health care reform legislation.”  In fact, cost savings to Medicare by Obamacare has added 12 years to the life of Medicare per recent government reports.

The GOP plan in controlling costs is "competition", freeing insurers to offer choices that do not conform to the standards required in Obamacare, including women's health, covering pre-existing conditions forbidding life time caps on coverage, and making partitcipation strictly voluntary with no penalties. First, what lowers costs is the size of the pool ..in any insurance plan, whether casualty, life insurance or health. The pool must have a mix of both those who pay in but never use vs those who pay in and use the coverage. The GOP plan narrows the pool by not requiring only those who think they will never get sick to join in the pool. It would also allow men who do not want to see any of their premiums support women's health to opt out of such benefits. That reduces the pool, too.

GOP proposes putting those with pre-existing conditions in a special pool of those who are bad risks and subsidize that. However, those pools exist now, have been tried before Obamacare passed, and turned out to be failures and extremely costly. Either they required a large taxpayer subsidy or their premiums were not reduced enough to make them affordable for many people. In Colorado, the high risk pool premiums were only reduced enough to bring them down to the level paid by those who had no prior conditions, which were still unaffordable for thousands without subsidies. Few in lower income brackets signed up

The other false premise advocated by the GOP is the concept of competition, including buying insurance in other states. Without nationwide standards, those other states would be free to provide substandard, cheap premiums and there would be a race to the bottom for all offering poor quality or fewer benefits. However even more fundamental is the fact that there is no competition in the market anyway. Major insurers have affiliates in multiple states, meaning your state may have Blue-Cross Blue Shield, and going to another state you will run into their affiliate. The other factor that keeps the insurance market from being compeittive is that all insurance is exempted from federal anti-trust laws, meaning they are free to get together with competitors, set prices and benefits.

Trump is closer to the thoughts of the electorate than is the GOP Congresspeople  as their members have found recent town halls and constituent meetings that have become very uncomfortably filled with  angry consumers who fear they will lose their life saving health insurance due to their Congressman/Senator/s vote to repeal Obamacare. Bernie Sanders has been able to rally large masses of voters, even in states like Michigan Trump won to support retaining Obamacare.

There are still those who bought into Sander’s proposal of Medicare for All, a single payer system, though Sander’s is not promoting  that for now. Instead  he is rallying  public pressure to retain the gains made by the ACA (Obamacare) in any form and is willing to work with Trump to achieve it.   Eventually just for economic reasons and known experience with single payers systems elsewhere in the world,  that alternative  will be revisited in the future because  a single payer system it is a far more efficient way to achieve the goal of insuring everyone. But now, given the issues at hand, Sanders is on the right track.

Improving Obamacare or Trumpcare s a goal  that should not get lost in the legislation.. It needs fixing. Aside from the morality of the issue and the life and death health concerns of so many, it has not achieved the goal of making health insurance available to all.    9 %  are still not insured and the high deductibles present their  financial burdens even for those who have insurance.

In the terms of sheer consumer financial worries there is motivation to fix Obamacare. According to the Federal Reserve, 47% of US families have only $400 in personal reserves to cover emergencies. A visit to the ER costs $1000 alone.  Before Obamacare, medical bills caused 60% of all personal bankruptcies. Most of those taking bankruptcy then had health insurance, but the insurance was  so poor with life time caps, high deductibles  and lacking in comprehensive coverage.   In 2016, of those with health insurance under the age 65, that number was reduced to  20%, still not good enough,  and for those without health insurance it was 53%.   The  obvious conclusion from that is that Obamacare standards and consumer protections need to be expanded to cover even more of the uninsured, not shrink the numbers with access to  affordable, quality, comprehensive  health insurance.











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