Is There A Future For The ACA And Your Health Insurance?

With the election of Donald Trump as the next President and with the Republican party in control of congress beginning this month, is there a future for the ACA or Obamacare? While the Republican party has made a lot of noise about repealing this act, actually undoing it will be much more complicated and could have serious and unintended consequences.

Let’s begin with some facts from the Department of HHS which oversees the health care act and federal exchanges. According to the Department of HHS:

  • Most people enrolling for health insurance through the health insurance exchanges can get a health insurance policy for $75.00 per month or less thanks to premium subsidies.
  • Last year the average cost of marketplace coverage increased only $4.00 from $102 to $106 despite claims of “double digit increases”.
  • More than 76% of people purchasing health insurance through the health insurance exchanges are eligible for premium subsidies, making their actual cost much lower.
  • Since the health insurance marketplace opened three years ago and since the ACA was signed into law in 2010, the rate of increase in health insurance premiums has slowed.
  • Because of the ability for individuals to get health insurance through the marketplace and premium subsidies as well as the expansion of Medicaid; the rate and number of uninsured Americans has dropped to the lowest since those statistics have been kept, about thirty years.

What has been overlooked in all this is that since the ACA was signed into law on March 23 2010, employment in the health care sector has increased substantially. This is largely due to the fact that with many more Americans now receiving coverage, there has been an increased demand for health care services. Of course this has caused health care facilities and providers to expand and increase employment in that sector. One doesn’t need to read a lot of lengthy reports to confirm this fact. All one has to do is drive around the area and see all the new health care facilities that have sprung up within the past six or seven years.

So what will happen to the ACA and health care under a Trump administration? In the Republican party platform, the GOP is in favor of changing the premium subsidies to a refundable tax credit and eliminating the “individual mandate” that requires everyone not covered through an employer plan, Medicare or Medicaid get covered or pay a penalty. 

Don't be fooled into believing that a refundable tax credit and premium subsidies are the same. They are as different as night and day. Premium subsidies go directly to the insurance company providing the coverage and are directly applied to the premiums for the health insurance. Refundable tax credits require that the individual pay the entire premium first, then take the credit from their income after paying the premium, in essence reimbursing the person for the cost of their health insurance. With a refundable tax credit, premiums have to be paid in full before receiving the tax credit.

Very few people have that kind of disposable income and will simply go uninsured. This also imposes one more step in the process that would require the individual to file for the tax credit after paying the premiums rather than the simple procedure of just applying the premium subsidy directly to the insurance company for the cost of the health insurance.

Besides eliminating the "individual mandate" that everyone has to get covered or pay a penalty, the Republicans want to keep the provision where no one can be turned down because of their health history or a pre-existing condition, nor could they be charged a higher premium. This makes absolutely no sense at all since the healthy people would just wait until they "need it" before paying the money for health insurance. The degree of adverse selection (more sick people having insurance than healthy people) would be so high that premiums would go out of sight. No health insurance company would be in the marketplace under those conditions. It would destroy the individual health insurance market. 

Then the only way anyone could get an individual health insurance policy would be through an “off exchange” policy; a health insurance policy that is purchased off the exchanges and is not subject to the requirements of those policies sold on the health insurance exchanges. Off exchange policies are available even right now, but they are not advertised. They have full medical underwriting and offer fewer benefits and are pretty much like the old health insurance policies that existed before the exchanges opened up three years ago.

To put it simple, the Republican plan would essentially kill the exchanges for individual health insurance since no insurance company that wanted to stay in business would offer policies through the exchanges under those conditions. What there will be would be the old fashioned system of individual health insurance where plans can cherry pick who they want to insure and there are no premium subsidies at all. Only those who are healthy and can afford the premiums would be insured. 

If this goes through and the Medicaid expansion is rolled back or eliminated; by 2020 there may be well over 50 to 60 million Americans uninsured and a financial crisis in health care as hospitals and medical practices have to contend with so much uncompensated care. Is this what you voted for? 

Lee Kamps

Lee has been working with Medicare, Medicaid and private health insurance since he began working at the Erie County Welfare Department in January 1973 where a major part of his job was determining eligibility for Medicaid. He went into the private insurance business in 1977 with Prudential Insurance Company and within a short time had become one of the company’s top sales agents. In 1982, he was promoted into management where he managed two field offices and as many as thirteen sales agents. After leaving Prudential in 1986, Lee decided to become more focused on health insurance and employee benefits. He has advised many local employers on how to have a more cost effective employee benefit program as well as conducted employee benefit meetings and enrollments for many area employers. The companies Lee has worked with ranged from small “mom and pop” businesses to local operations of large national companies. Lee received his B.S. degree from Kent State University where he has been active in the local alumni association. He has completed seven of the ten courses toward the Certified Employee Benefit Specialist designation. He has taught courses in employee benefits and insurance at Cleveland State University and local community colleges. In addition, Lee is an experienced and accomplished public speaker. He has been a member of Toastmasters International where he achieved the designation of “Able Toastmaster – Silver” in 1994. He has also served as a club president, Area Governor and District Public Relations Officer in Toastmasters as well as winning local speech contests. Lee has also been a member of the Greater Cleveland Growth Association’s Speaker’s Bureau where he was designated as one of the “official spokespeople for the Rock and Roll Hall of Fame” prior to the hall’s opening in 1995. He has given talks and presentations before many audiences including civic organizations, AARP chapters and many other community groups. With the implementation of the Medicare Modernization Act (Medicare drug bill) in 2006, Lee has shifted his focus to Medicare and helping Medicare beneficiaries navigate the often confusing array of choices and plans available. As an independent representative, Lee is not bound to any one specific company or plan, but he can offer a plan that suits an individual person’s needs and budget. In addition, Lee is well versed in the requirements and availability of various programs for assistance with Medicare part D as well as Medicaid. While he cannot make one eligible, he can assist in the process and steer one to where they may be able to receive assistance.

Read More on Opinion
Volume 9, Issue 1, Posted 1:52 PM, 01.05.2017