What’s next for health insurance:

Isn’t it time to move on? Just like the last guest at a party who overstays their welcome, it seems like Trump and the GOP just cannot let the Affordable Care Act stay in place and move on to other important issues like the budget, infrastructure and taxes along with stabilizing the current health care law that is actually in place.

In a lunch yesterday at the White House, Trump stated: We shouldn’t “leave town unless we have a health insurance plan” “We’re very close,” Trump said several times. He then suggested Congress work through recess to get a bill together and passed. “My message today is very simple. We have to stay here, we shouldn’t leave town, and we should hammer this out and get it done,” he said.

While the Senate’s proposed Better Reconciliation Act is presumed dead, the Affordable Care Act (AKA Obamacare) remains in effect. However, Senate GOP Leader McConnell will still be moving forward with a procedural vote next week for a bill that would effectively repeal the ACA by immediately:

  • Eliminating the individual and employer coverage mandates
  • Increase funding for community health centers and state substance abuse program grants.

And in 2020:

  • Eliminate cost sharing (premium) subsidies
  • Eliminate Medicaid expansion
  • Repealing most of the taxes in the ACA
  • End extra federal support for a program that provides personal care services for people with severe disabilities.

The results of a repeal of the ACA with no replacement according to the Congressional Budget office would be severe:

  • 32 million more people would become uninsured resulting in 21% of Americans under 65 having no health insurance.
  • 75% of Americans would live in areas with no insurance companies participating in the individual market by 2026 resulting in no options if they do not have employer-provided for government health care (such as Medicare or Medicaid).
  • Premiums would also approximately double by 2026, increasing on average by 25% next year.

At least 3 GOP Senators have stated that they will vote no on a procedural motion necessary to move to a vote and that number is probably closer to 10 who will vote no.

If the procedural vote does somehow pass, then debate will start on the Senate Reconciliation Bill, so it is not dead yet. Keep in mind that the Bill is not completely dead as a failed procedural vote doesn’t kill the bill forever. If the first vote on to begin debate on the bill fails, the GOP can always try again. The legislative vehicle will remain intact as long as debate doesn’t begin. While McConnell would not confirm that is a “repeal-only” vote, he stated that though it’s better to repeal and replace, there’s no harm in just moving forward and revising from there. Here’s Why Senate Republicans can’t agree to repeal Obamacare, in charts.

Here are the areas of concern for the ACA:

  • Many insurance companies have boosted premiums. 43% of insurers plan to raise rates an average of 20% or more, while another 36% want to boost premiums by 10% to 20%. About one-fifth of carriers are looking for increases of up to 10%. These numbers are based upon a survey by the consulting firm of Oliver Wyman.
  • 38 counties have no insurance exchange options. This is estimated to be 25,000 people. There are 3,143 counties in the U.S.
  • 41% of counties most likely will have only one insurance choice on their exchange.

With that said, the ACA is stable in many states and 80% of enrollees will have at least two insurers to choose from have multiple insurance companies with modest rate increases. Some insurance companies are expanding to more markets. Here’s an overall look: Failing or Doing Fine?How Obamacare’s Marketplaces Are Shaping Up for 2018.

Following are some potential and mostly critical next steps:

  • Continue funding the cost-sharing subsidies. Subsidies help consumers cover out of pocket expenses such as deductible and co-pays for health care visits and prescription medications. Currently insurance companies pays these costs up-front and then get reimbursed by the federal government (approximately $7 billion annually). These subsidies benefit lower-income ACA enrollees, at least through 2019. Congress and President Trump have not committed to continuing these payments, which were at the center of a legal battle between the House of Representatives and the Obama administration. The lack of a guarantee is one of the primary reasons insurers are hiking premiums or bailing for next year. For example Blue Cross and Blue Shield of North Carolina requested a rate increase of 22% for 2018 while indicating the rate increase would have been only 8.8% if cost-sharing subsidies were guaranteed for 2018.
  • Establish a market stabilization program. This would help reduce premiums in the individual market by compensating insurers who have very costly customers. The ACA originally had three programs that mitigated this risk, but two were temporary and expired last year. Funding a new initiative with $15 billion annually could lower rates by 15% or more, AHIP wrote.
  • Enhance credits for younger consumers. The additional funding could draw more 18- to 34-year-olds into the exchanges. That would help lower premiums for everyone since these enrollees generally have fewer health care needs.
  • Repeal or suspend the health insurer fee. This levy was put on hold this year, but is set to return in 2018. That could raise premiums by more than 3%, according to AHIP.
  • Include continuous coverage provisions to incentivize enrollees to maintain their insurance policies. This is the goal of the individual mandate, which Congress and the Trump administration are determined to eliminate. Instead, the Senate would institute a six-month waiting period for those who let their insurance lapse. The House would levy a 30% surcharge or allow insurers in some states to base premiums on health status. Insurers, however, fear that Republicans will weaken the mandate before they replace the ACA, which could prompt healthy folks to drop their ACA policies.
  • Reduce or repeal of the so-called Cadillac tax. This is a special levy on insurance plans that provide comprehensive, top-level benefits,
  • Negotiate reduced medication prices. Allow groups of Americans and the Government (through Medicare) to negotiate reduced prices. Allow the importation of cheaper Canadian drugs.
  • Allow insurance companies to sell policies across state lines. This would most likely not reduce premiums, however it might bring more companies into counties that have limited options (or no options).

Note: Nationally, 83 percent, or nearly 10.1 million consumers, who selected a plan had premiums reduced by advance payments of the premium tax credit (APTC).

Senate possibilities:

  • Sen. Lamar Alexander, the chairman of the Health, Education, Labor and Pensions Committee, has said that he’ll begin holding hearings on the health of the individual market shortly.
  • Some Republicans have raised the idea of a bipartisan bill to stabilize ObamaCare markets, which could include funding for key payments to insurers known as cost-sharing reductions, as well as possibly funding to bring down premiums for high-cost enrollees, known as “reinsurance.” But conservative members, including No. 2 Senate Republican John Cornyn (Texas), have objected to the idea of a stabilization bill as simply throwing more money at the health law.
  • GOP Senators Bill Cassidy and Lindsey Graham have proposed an alternative bill that would essentially keep most components in place and send them to the states to control rather being controlled at the federal level. And they have brought up the need for a bipartisan bill.
  • Tennessee Senators Lamar Alexander and Bob Corker introduced legislation earlier this year that would allow those with no Obamacare options in 2018 to use their federal premium subsidies to buy policies outside the exchanges. Also, it would waive the individual mandate, which requires nearly all Americans to have insurance or pay a penalty, for those in this situation.
  • Senate Finance Chairman Orrin Hatch said it may be time to put aside an Affordable Care Act repeal and, if McConnell decides to do so, Congress should consider short-term measures to stabilize insurance markets. Hatch of Utah said it may be difficult to pay for reinsurance funds and cost reduction subsidies to stabilize markets.

As Senator John McCain writes: Congress should “return to regular order, hold hearings, receive input from members of both parties, and heed the recommendations of our nation’s governors so that we can produce a bill that finally provides Americans with access to quality and affordable health care.”

The Trump Factor:

  • Monday: “Republicans should just REPEAL failing ObamaCare now & work on a new Healthcare Plan that will start from a clean slate.”
  • Tuesday, President Trump stated: “Let Obamacare fail, it will be a lot easier. “And I think we’re probably in that position where we’ll just let Obamacare fail. We’re not going to own it. I’m not going to own it. I can tell you the Republicans are not going to own it. We’ll let Obamacare fail and then the Democrats are going to come to us.”
  • Wednesday, Trump hosted a lunch for GOP Senators to urge them to repeal the ACA stating that “Inaction is not an option”. “We can repeal it, but we should repeal it and replace.”
  • Today: Your guess is as good as mine

What is certain is that no one knows what Trump will do since he has been erratic in his statements regarding health care and health insurance. In fact, The costs of Trump’s sabotage of Obamacare already are showing up in rate hikes.

Trump has also left insurance companies guessing by not committing to continue paying the cost-sharing subsidies. These payments, which reduce deductibles and co-pays for lower-income enrollees, are crucial to insurers, and without them, insurance companies would likely withdraw from the exchanges.

At the same time, however, the administration and lawmakers have acknowledged they must stabilize Obamacare — at least in the near term. The Health and Human Services Department addressed some insurer concerns earlier this year in hopes of strengthening the market.

The cost-sharing payments that are due, by law, for this month have been approved and will go out to the health insurers. So far, the Trump administration has been reluctantly making them on a month-to-month basis, meaning that insurance companies cannot count on receiving these payments.

What President Trump’s administration has done so far:

  • Enacted rules to tighten the enrollment periods. This is a good thing and will allow insurance companies to be able to more accurately set premiums as enrollees will need to commit.
  • Insurance companies can offer plans that cover less of the cost of care resulting in lower monthly premiums. This is not good as this would increase the out-of-pocket costs for consumers in the event of a significant medical claim. Medical costs are a leading cause of bankruptcy.
  • Insurance companies can offer plans with smaller provider networks. This is not a good thing as it limits consumer choice when enrolled in a plan.
  • Insurers have been given leeway for next year to demand payment for unpaid premiums during the previous 12 months before allowing consumers to enroll in one of the insurer’s plans again. If you switch insurers you can’t be denied a new plan because you owe premiums to another company.
  • Halted advertising before the end of the last open enrollment period.

What Trump’s administration is planning:

  • Trump’s budget contains $800 billion in cuts to Medicaid which provides health care to millions of low-income Americans. Funding would be switched to block grants (a fixed amount rather than actual costs) which means states would most likely reduce eligibility and/or lessen benefits.
  • On medications, there is a pending executive order that would order agencies to study their options or roll back regulations, and its most aggressive steps are mostly industry-approved. Those would include value-based purchasing and changes to the drug-discount program known as $340B — changes that some experts believe could actually raise drug prices.

What the Trump administration could do:

  • Refuse to fund cost-sharing subsidies that insurance companies rely on. This would drive some companies to leave the marketplace or would cause steep premium increases making premiums unaffordable. According to a Commonwealth Fund analysisthis could destabilize the insurance market.
  • Not enforcing the individual mandate. The mandate assesses penalties for people who not have health insurance. This would most likely result in less healthy people having insurance, leaving insurance companies with customers who have higher medical costs.
  • Not funding outreach programs designed to encourage people to sign up for health insurance.
  • Granting waivers to states allowing them to bypass key protections in the ACA, such as providing comprehensive health insurance or limiting out-of-pocket costs consumers must pay.

States reviewing moving ahead with their own plans:

Alaska has received a waiver from the federal government to create their own separate reinsurance program that could help lower premiums by 20%. The reinsurance program would direct some federal money to the state, which then use it to offset the cost of insuring people with higher cost medical conditions. According to the Department of Health and Human Services; Iowa, Minnesota, New Hampshire and Oregon are also considering similar programs.

What’s really being missed in all of these discussions are increases in health care costs and especially with medications.

PricewaterhouseCoopers is projecting that costs will continue to increase by more than 6% annually, roughly three times the current inflation rate. Their analysis shows that increases are due to increases in price and not utilization. As an example, insulin’s list price has increased by 270 percent over the last decade. If our health care system were switched to a legitimate, transparent pricing system like most other businesses, it is estimated that annual health care costs would be reduced by 1/3.

Our health care system ranks last in quality among 11 industrialized nations according to a report from the Commonwealth Fund because of Dirty, Dingy Hospitals: Doctors Blame Debt-Fueled Takeovers.

Insurance companies need stability from Congress and the White house. Insurance works when there is stability and is the only way that premiums can be set accurately. “Further inaction at the federal level will lead to higher premiums, fewer consumer options, and, in some places, collapsing markets,” leaders of the National Association of Insurance Commissioners said in a letter sent Wednesday to Senate leaders.

Advocacy can and does make a difference. Make your voice heard. You can also support the Petition that I’ve started “Fair Health Insurance for All”. Contact your legislators – visit www.ussenate.gov or www.house.gov or you can use a new web service called Resistbotwhich allows you to send a text or message on Facebook and it will find out who represents you in Congress, and deliver your message to them in under 2 minutes. No downloads or apps required.

Thank you for reading. If you like this, please share.

Tony

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