A topic that has been highly politicized around a lightning rod of a name is what to do about Obamacare. To illustrate this point, if we call it the Affordable Care Act, approval rates increase and if we use the name KyNect in Kentucky it increases even more. In a Kaiser Health monthly poll (see Note to Reader comment below) from November, 74% of Americans and half of Republicans want the ACA to continue. But, if you dig deeper, the Republican voters heavily favor almost all features of the ACA except those dealing with the mandates for coverage for the employer and individual.
The Affordable Care Act is not perfect and is complex, but it is actually working even though it has been hamstrung and is not fully implemented in 19 states. Given the states who have expanded Medicaid, we can actually contrast their results with those who have not. What is revealed is personal bankruptcy rates have declined and hospital accounts receivable have improved in those expansion states.
Unwinding the ACA will prove difficult and a different tactic is needed. A data driven analysis would help leaving the political rhetoric aside. A key recognition is our health care costs have a tendency to increase as we have an aging and overweight population. We are also over-medicated and have more surgical procedures than needed. So, any insurance system needs to be mindful of those cost pressures. Plus, we need to recognize the restriction on funding to insurance carriers for adverse selection exposure has led to increased premiums and some leaving the market.
I have several suggestions around the idea of not throwing the baby out with the bath water, supported by many more Americans than not as well as the hospital industry. A few to consider are as follows:
– Fully fund the risk corridors for insurers to tie them over for the initial adverse selection from unhealthier risks. This will moderate premium increases.
– Expand Medicaid in the remaining states. This helps people, hospitals and economies as per several healthcare foundation studies like Kaiser, Commonwealth, RAND, et al.
– Introduce a public option in states where insufficient competition exists. This would offer choice and a lower expense option since it eliminates a profit margin expense.
– Evaluate the efficacy of various fees and improve, eliminate or validate what makes sense to continue.
– Seek more ways to offer choice, but make this less confusing. Healthcare insurance is already confusing enough.
– Legislators need to buy into this and stop political posturing. It is clear to me that any success that has been achieved has been in spite of partisan naysaying. What far too many don’t realize is the ACA borrows from a largely Republican idea that was supported by the Tea Party leadership (Google “Senator Jim DeMint and Romneycare”)
As a former actuary, the principle of insurance is the good risks pay for the bad risks. Plus, insurance is designed to keep you from bankruptcy should a catastrophic event occur. So, an effort should be made to get better risks in the plan.
What many don’t realize, by having insurance you tap the agreed upon network discounts with the hospitals. For example a double hernia operation might cost $32,000 with no insurance, but the network discounted price is $18,000. With a plan that has a $6,000 deductible, you end up saving $26,000.
So, as our leaders evaluate options, we need for them to set rhetoric aside and look at the data. Access to insurance is vital and ACA requirements imposed on all insurance, even employer-provided care, benefit far more than than the 20 million covered directly.