This week, Senate Democrats are voting on a resolution to curtail the use of the Affordable Care Act’s Section 1332 waivers, which empower states to revamp their failing individual insurance markets. These waivers are a lifeline for states whose individual markets are on the verge of a death spiral. Yet Democrats claim they would put people with pre-existing conditions in jeopardy and are an attempt to “sabotage” Obamacare.
Here’s the problem.
If you have a decent income and have a chronic health condition, things have gotten worse, not better, for you under Obamacare.
For example, if you are single and earn $50,000 a year, you get no subsidy if you have to buy your insurance in the individual market. Yet under Obamacare, premiums have doubled nationwide. In some areas they have increased fivefold. Deductibles are three times what they are in a typical employer plan.
What about access to care? Across the country there has been a
race to the bottom in the Obamacare exchanges. Narrow networks exclude the best doctors and the best hospitals almost everywhere.
Before the passage of the Affordable Care Act, the Health Insurance Portability and Accountability Act of 1996 (HIPAA) required states to enact protections for people with health problems who transitioned from the group to the individual health insurance market.
Most states met this obligation by establishing risk pools. The insurance offered in these pools was typically a Blue Cross plan that allowed access to almost all doctors and facilities. The premium was often 25% higher than what healthy people paid. But never more than 50%.
Today, if you leave an employer plan and enter the individual market you will face higher premiums and less access to care than under the old system – whether you are healthy or sick.
Centene is a Medicaid contractor that now sells about one-fifth of all the Obamacare plans sold in the country. The insurance it offers looks very much like Medicaid managed care. Doctors and hospitals that are in Centene’s network must accept Medicaid fees. If a patient goes out of network, Centene doesn’t pay anything.
It has taken a few years for the market to settle down. But today
almost every other insurer is following Centene’s lead. In Dallas, Texas, not a single plan offered in the individual market ill allow a patient to enter UT Southwestern Medical Center, arguably the best medical research facility in the world. MD Anderson Cancer Center in Houston also doesn’t take Obamacare patients. Ditto for many other centers of excellence across the country.
Obamacare desperately needs reforming. Seven states have received
Section 1332 waivers and in every case
premiums came down because the states were allowed to offset expenses for the most costly enrollees. Next year, an additional five states will get waivers and premiums are expected to decrease in those states as well.
Much more needs to be done. Health plans need to be able to specialize – say in cancer care, diabetic care or heart disease. Plans should be able to ask heath questions at the time of enrollment to make sure the right plan gets connected with the right patient. And risk pool funds are needed to make sure that plans that attract patients with expensive-to-treat problems receive fair compensation.
The healthcare framework recently released by the Job Creators Network offers such a personalized approach to healthcare by giving patients more control over their healthcare choices through reforms such as expanded personal health management accounts and increased use of direct medical care.
We also already have a model for reform. It’s called Medicare Advantage (MA). Like Obamacare, it has an exchange. It has guaranteed issue and community rating. But unlike Obamacare, Medicare Advantage for the elderly and the disabled works and works well.
Instead of fighting the Trump Administration and state-level reformers and unduly alarming people with health problems, Democrats in Congress should work with their Republican colleagues to make changes that are long overdue.
