Talking about healthcare insurance or even the subject in general is definitely not a sexy topic to discuss. It can be complicated as our republican legislators in the US House of Congress have recently discovered. This is why it would have been helpful if those attempting to write a bill to replace Obamacare had the most minimal and rudimentary understanding of how insurance works.
Republican talking point: The US healthcare is the envy of the world.
On July 8, 2017, the MSNBC TV show host, Ali Velshi stated that the US healthcare delivery system is no longer the envy of the world. According to the “Healthcare Equity study/ Common Wealth Fund”), “Despite having the most expensive health care system, the United States ranks last overall among 11 industrialized countries on measures of health system quality, efficiency, access to care, equity, and healthy lives. The other countries included in the study were Australia, Canada, France, Germany, the Netherlands, New Zealand Norway, Sweden Switzerland, and the United Kingdom. While there is room for improvement in every country, the U.S. stands out for having the highest costs and lowest performance. The United Kingdom ranked first overall.
Republican talking point: Healthcare costs should be subject to market place dynamics.
Unfortunately, when someone is being rushed to to the hospital for a heart attack, a stroke, auto accident injuries, etc., they are not in a position to shop around for competitive pricing and better service. This is a reality that they don’t want to hear about.
The lack of knowledge had so pervaded the legislative process to where it was the healthcare insurance companies’ lobbyists who were writing it to their best advantage. What could possibly go wrong except the creation of the least popular law in US history?
Then there were the US senators who were attempting to use its healthcare plan as a means to create a huge tax savings as a precursor to the senate’s future tax reform/ tax cuts bill. There was no way to accomplish this feat without slashing the benefits currently available because of the 2010 Obamacare / Affordable Care Act (ACA).
This time the public had been paying attention and they were not easily fooled by republican political speak into buying this LOUSY work product. And they voiced their displeasure to their representatives in large numbers, thereby insuring the death of the republicans’ version of Trumpcare designed to replace Obamacare after its repeal.
Now the republican legislators are back at the drawing board having to deal with democrats to at least fix Obamacare.
The question remains, was it ever possible to create healthcare legislation which provided better, less expensive coverage to a greater number peoples with the insurance companies at play while providing the legislators with their desired tax savings? And the answer is, YES!
As per the June 28, 2017, LA Times article by Doyle McManus, “The bill McConnell and his allies unveiled last week satisfied neither side. It didn’t repeal Obamacare. It didn’t replace it. It didn’t even fix it, in conservatives’ eyes, except around the edges. It mostly just cut the current program’s spending to pay for tax cuts aimed at people making more than $200,000 a year.”
“The bill would break almost every promise Donald Trump and his party made to voters during last year’s campaign.”We’re going to have insurance for everybody,” Trump said in January.”
CLIFF NOTES ABOUT HEALTH CARE INSURANCE
First to keep costs lower, the risk pool for insurance must be spread over as many peoples as possible (law of large numbers). For health insurance, this means that there must be a mix of healthy folks mixed in with the not so healthy folks with a pooling of as many folks as possible. This why there was the Obamacare/ the ACA mandate, a crucial feature to push more young peoples to sign up.
The minute you carve out the young and healthy peoples you are skewing the insurance product to fail. This would be analogous to home insurance companies only covering homes in California near fire prone brush areas. The company would be wiped out with one major fire. While the homeowner’s insurance companies would love to and are trying to carve out homes that are in flood zones for example, there is no way they would carve out insuring homes in low risk areas. Fortunately, there is a mandate when the mortgage companies demand that owners of mortgaged homes be required to carry homeowners’ insurance.
Almost all insurance companies have their own insurance coverage called reinsurance, that they can tap into when an unforeseen event causes the insurance companies to incur unanticipated huge losses, where they are in peril of not being able to pay client’s claims.
The (ACA) Affordable Care Act had this access to reinsurance for the first few years in the form of “risk corridors” which was established to cover insurance companies losses if somehow they ended up insuring many more unhealthy folks than had been reasonably predicted (Adverse selection.)
But republicans sabotaged the ACA by refusing to fund this provision as required by the ACA bill in the 2016 Omnibus Bill, which caused a spike in premiums/ deductibles and insurance companies leaving the ACA marketplace in the 2017 cycle. This coup was led by the then Senator Jeff Sessions but Senator Marc Rubio took the credit. They called funding “risk corridors” a bailout for insurance companies, which it is not. Glenn Kessler, fact checker for the Washington Post called the bailout term for reinsurance (risk corridors), a lie.
It is important to note, that if auto and homeowners’ insurance companies were barred from carrying reinsurance policies, our premiums would all spike, bigly.
WHAT IS MY SOLUTION?
Dear Republicans, If you want your tax savings while living up to President Trump’s promises for better, less expensive coverage for more peoples, then hear me out. Of course, you would need to work with democrats, as there is no way that the conservative wing of your party would pass my plan.
So, the question is, how badly do lawmakers want those tax savings?
My answer is that I would provide Medicare for all! Living in Florida, we who have our health insurance through Medicare have access to a myriad of insurance companies like Aetna, United Healthcare, Humana, Blue Cross etc., which have been managing this program with lots of choices called Medicare Advantage plans.
With the adoption of my plan, republicans would not have to reinvent the wheel. There would be the ample tax savings that they want. They could have even more savings, if Medicare agents were free to negotiate on prescription prices with big pharma. By continuing the plan so hospitals would have electronic medical records linked into a main system, and which is currently being pushed by the Affordable Care Act, eventually more savings could be possible.
And thus, republicans could repeal Obamacare while replacing it with a better product that covers more peoples, with higher quality, less expensive healthcare insurance policy options. President Obama would not mind this in the least, and the President Trump would be honoring a promise.
This blog was updated on July 8, 2017.