Before the Affordable Care Act (ACA) many people, including the author, were denied health insurance because of pre-existing conditions such as, but not limited to: obesity, cancer, or pregnancy. Since the ACA was signed into law in 2010, approximately 30 million people gained access to health insurance. Overall, the ACA has achieved its purpose of providing affordable health insurance to individuals regardless of health status. Even with the success of the ACA some politicians actively seek to “repeal and replace” this law. Numerous statutes to replace Obamacare were introduced in Congress after the inception of the ACA. The following are proposed bills currently in Congress, one of which may serve as a potential replacement to the ACA.
Secretary Tom Price introduced the Empowering Patients First Act (HR. 105) during the 112th Congress in response to escalating pressure for Obamacare repeal. In brief, the Empowering Patient First Act aims to provide tax credits to purchase family and individual policies. As individuals grow older and sicker these tax credits will increase. Consequently, the individual mandate and tax penalty for not maintaining insurance coverage would be abolished. Also, funding for Medicaid expansion will cease to exist. This bill would eliminate the federal insurance exchange; meaning no subsides to assist low-income persons with individual cost of insurance premiums. States would be responsible for developing and maintaining websites to only provide information regarding health insurance plans and prices. These state – controlled websites cannot directly enroll people in private plans and Medicaid. Finally, the Empowering Patients First Act enables insurance companies to determine length of previous coverage when establishing cost of insurance premiums.
“The Empowering Patients First Act”
The Patient Freedom Act of 2017 (S. 191), was sponsored by Senator Bill Cassidy (R – LA) during the 115th congress. As another ACA substitute bill, this act allows states to decide how intrastate health insurance is regulated, thus minimizing government involvement. The individual mandate, employer mandate, and federal essential health benefits mandate would all be repealed. For individuals who choose to opt-out of basic health insurance coverage a Roth health service account would be created to help fund medical expenses. According to this statute, each state would set its own rules for deciding on whether it would participate.
Unfortunately, there are several unknowns regarding the Patient Freedom Act of 2017. One such variable is cost of high – deductible plans. The amount of the deductible is also unknown. There is little discussion of what health services would be covered at little or no cost. Furthermore this act states, “some versions” of prescription drugs and childhood immunizations would be covered.
“The Patient Freedom Act of 2017”
The Obamacare replacement act (S. 222), introduced by Senator Rand Paul (R-KY), seeks to repeal all ACA mandates such as individual and employer mandates, community rating restriction, rate review, essential health benefits requirement, and medical – loss ratio. This plan provides a two year period for people with pre – existing conditions to obtain insurance coverage. Once this term ends the pre-ACA practice of denying health insurance to individuals with pre- existing illnesses will resume. Additionally, the Obamacare replacement act increases states flexibility to conduct Medicaid waivers. Under the ACA, if states would like to modify their Medicaid coverage rules, before those changes are initiated, the state must request a waiver from the Department of Health and Human Services. Senator Paul’s bill allows the states to have more control over instituting changes to Medicaid without government involvement.
“The Obamacare Replacement Act”
By numerous accounts, the ACA is accomplishing its ultimate goal: lowering the number of uninsured and making certain that Americans have comprehensive, affordable health insurance. According to the Centers of Disease Control and Prevention (CDC) and census data, for the first three months of 2016 the uninsured rate was 8.6% down from 9.2% in 2015, and from 15.7% before the ACA was signed into law. For states that have set up their own insurance marketplaces and expanded Medicaid, the number of uninsured has dropped from 45 million in 2013 to 29 million in 2015. These statistics should continue to decrease with more individuals signing up for insurance coverage through the ACA. Conversely, approximately 130,000 Americans died between 2005 and 2010 because of their lack of health insurance according to a 2012 healthcare consumer study. The uninsured are less likely to have a primary care physician and often go without screening and preventive care. Without routine screening and preventative care diseases such as HIV and cancer are detected at a later stage leading to higher rate of death.
The previously mentioned replacement acts for Obamacare collectively discuss eliminating ACA mandates. The fierce opposition towards the individual mandate stems from a widely held belief that health insurance should be a choice not forced upon individuals and businesses. Fortunately, the individual mandate allows insurance premiums to remain relatively affordable. This mandate forces healthy people into the insurance market thus decreasing risk to underwriters and overall cost. Eliminating the individual mandate may send health insurance markets into a tailspin increasing cost consequently leaving millions without insurance due to exorbitant expense. Another destabilizing factor of keeping health insurance affordable is the practice of allowing healthcare plans to be purchased across state lines.
Building a national insurance system is nearly impossible because developing a national provider network is difficult. Establishing contracts with doctors and hospitals is expensive and time consuming for insurance companies. There are numerous, varying regulations within a state’s health insurance department. Insurance tends to be less expensive in states where more people are young and healthy. Cost may rise if individuals from other states were to buy insurance in the cheaper state. Concurrently, Humana announced that it has plans to leave eleven state marketplaces in 2017 due to loss of revenue. Humana reports nearly $1 billion dollars in losses since the beginning of the ACA. Aetna is considering following in Humana’s footsteps, leaving the marketplace also citing cost. Aetna reduced its presence in the market from 15 to four states, after losing $450 million on sales of ACA plans in 2016.
As everyone understands, providing affordable healthcare to all is a complex matter. The hallmarks of the ACA finance the plan and provide stability. Abolishing the mandates and allowing health insurance to be purchased across state lines severely increases volatility of the health insurance market. Large insurance companies such as Humana and Aetna leaving the healthcare exchange creates another level of instability to the marketplace. Yes, the ACA is problematic and modification should occur but hopefully when the dust settles, the American people will have a healthcare plan that is stronger not weaker than the original.