The next president — and the next Congress, as well — is going to have to deal with the disaster known to the nation as ObamaCare. To be more technical and more accurate, it’s the Affordable Care Act and the fourth sign-up period starts just a week before the November election.
Enrollment numbers — as well see in a bit — are critical to the Affordable Care Act’s continuation. So is the number of insurers participating in the federal and state insurance exchanges or marketplaces as they are now known. Losses on insureds have some insurers thinking of dropping out.
That means either a president Trump or a president Clinton — when they take office — will need to make some critical decisions and quickly. What are their plans for ObamaCare? Corporate Synergies — an employee benefits consultancy — looked at what both candidates have said and did an analysis.
Surprisingly, they agree on more than they disagree. One area of disagreement is the Affordable Care Act itself. Clinton wants to build on ObamaCare successes. Her idea is to tweak it in some places and increase access to pharmaceutical benefits.
Trump wants ObamaCare repealed but he’ll keep some parts like the pre-existing condition regulations.
The two candidates agree on repeal of the Cadillac Tax. If you don’t remember, the Cadillac Tax puts an excise tax of 40% on every dollar spent for health insurance over $10,200 for an individual or $27,500 for a family. It is set to happen in 2020.
On the high cost of coverage, Trump wants to increase consumer choices for health insurance. To help consumers pay for insurance he’d do tax relief for individuals rather than fund it through Medicaid.
Trump also wants to modify laws to allow people to buy insurance across state lines. Clinton hasn’t commented on the topic.
Both Trump and Clinton don’t like what Corporate Synergies terms “health insurance monopolies.” Clinton — in particular — has a plan to dramatically cut out of pocket health insurance costs. Trump and Clinton are against the Humana and Aetna and Anthem and Cigna mergers.
They agree it leads to fewer options for consumers.
And when it comes to insurers, both want more transparency and Clinton says she’s going to do some work on surprise medical bills and will do away with them.
Trump and Clinton also agree on the cost of medication. It needs to drop and fast. The two agree Medicare ought to set drug prices to cut the cost of health care.
On the topic of consumer driven health care, Trump wants tax free HSAs and more access to CDHPs. Clinton has made no comments on the subject.
Here’s where they separate. As noted earlier, Trump wants to do away with the Affordable Care Act and Clinton says it just needs some fixes. Surprisingly, Trump says he’s open to a single-payer system and free health care for all.
And what do they need to fix? The number of people registering this year is critical to the act’s survival. And within that number more people need to be healthy. To date a huge percentage of those registering are not. Because of that insurers lost lots of money in 2015 and in the three previous years. Young, healthy people are needed in the marketplaces — or exchanges — to offset costs and losses. If more healthy people don’t register the cost of insurance will continue to go up and up.
The Kaiser Foundation’s senior vice president Larry Levitt said, “The next open enrollment period is key.” How key you ask? The average price hike is going to be an unacceptable average of 9%.
At least that’s the analysis from data collected in 17 cities. Some will see even greater increases.
As a P.S. to that figure, most larger corporations say the health insurance costs to employees is only going up an average of 6%. While that’s unacceptably high, it’s much lower than what people forced to use the exchanges are going to see.
Last year 11 million people participated in the exchanges. That shocked the Obama White House because the Congressional Budget Office predicted a figure 21 million — or nearly double the actual amount.
That leads us back to the need for healthy people signing up. Without them insurers can’t make their participation work. In fact many like UnitedHealth are saying — to quote boxer Roberto Duran — “No mas.”
Adding to the problem is the failure of the administration’s market stabilization program. Cash strapped — probably because of the high number of unhealthy people signing up and the low number of healthy people participating — the program hasn’t been able to subsidize insurers as much as expected.
The original idea was to have insurers in the red at the end of two years. It didn’t happen and — again — without the government help via the market stabilization program insurers had access to just $1 for every $10 in claims.
That’s the bad news. The good news for insurers is the federal government’s reinsurance program helped control costs for insurers. The Commonwealth Fund — a nonprofit group — says insurer claims were just 2% higher than projected after the reinsurance payments.
And that leads some to think the exchanges — or marketplaces as they’re officially called — are on the brink of success.
On the brink or not, insurers — even at just a 2% loss — are close to having enough of ObamaCare. Aetna and Anthem both said they are scrapping plans to expand into exchanges they have not been involved with and all five insurers say they’re losing money.
And the government reinsurance program will soon be ending.
UnitedHealth consultant Michael Abrams of Numerof & Associations said, “From a policy point of view, we’re basically seeing the exchanges unravel. More than anything else, it’s a serious symbolic blow to ObamaCare,” he said.
Source links: The Hill, Employee Benefit Advisor