ObamaCare has slipped from the news because more important issues, like parents scolding school boards and SEALS refusing to be vaccinated, have dominated the headlines. Yet, healthcare is still an important issue to most Americans. The RealClearPolitics latest polls show 60.8% of Americans believe the country is on the wrong track – and healthcare is one of the reasons why.
GOP attorneys general tried to get the U.S Supreme Court to rule ObamaCare is unconstitutional, but they declined to review the case. That leaves it up to Congress to make the needed changes that will give Americans the healthcare they need. The Trump administration tried to repeal and replace ObamaCare, but fell just shy of the needed votes. Since then, they created several alternatives including health sharing plans, limited benefit insurance, and short term, limited duration health plans (STLD).
John C. Goodman, healthcare economist writing in Forbes, says critics of these alternatives call them “junk insurance.” Goodman responds, “But if people are choosing them over insurance offered in the exchanges, what does that say about ObamaCare?”
ObamaCare was supposed to protect people who enter the individual market with pre-existing conditions. But people who leave an employer plan and shop for insurance in the individual market today will face three unpleasant surprises: higher premiums, higher out-of-pocket costs, and more limited access to care than a typical employer plan provides. What went wrong?
The Affordable Care Act (ObamaCare) was flawed from the beginning. It triggered a race to the bottom by giving health plans perverse incentives to attract the healthy and avoid the sick. By demanding every qualified plan to include unnecessary services, like mammograms for men and prostate exams for women, the costs of these plans became artificially high. To compensate, insurers demanded high deductibles, which favor the healthy who don’t have to use the insurance often. Goodman says the most successful ObamaCare insurers are Medicaid contractors. The plans that have survived in the exchanges look like Medicaid managed care with a high deductible.
I am one of very few orthopedic specialists in our area accepting some of these plans. These patients can afford the insurance premiums, which are heavily subsided by the government, but they can’t afford the high deductibles associated with surgery or physical therapy. Often, they have to forgo treatments needed due to their inability to pay the deductibles.
Goodman says ObamaCare enrollees are often denied access to the best doctors and facilities. In Dallas, Texas, for example, no individual insurance plan includes Southwestern Medical Center, which may be the best medical research center in the world. Cancer patients with these plans don’t have access to MD Anderson Cancer Center in Houston. This pattern is common all over the country.
The solutions are well known, says Goodman, but hampered by political stagnation. He says in an ideal health care system, health plans would compete to attract patients with medical problems, instead of trying to avoid them as ObamaCare does. Plans would be allowed to specialize and become centers of excellence in such diseases as diabetes, heart disease, and cancer instead of being required to be all things to all patients.
There are two exchanges in our healthcare system currently, that give us plenty of insight into what works and what doesn’t – the ObamaCare Exchange and the Medicare Advantage Exchange. In both systems, consumers choose among competing health plans during an open enrollment period. Buyers pay community-rated premiums regardless of health status, supplemented by government subsidies. So far they are about the same. But one is doing much better than the other. Enrollment in Medicare Advantage has been steadily growing. About 40% of all Medicare enrollees are in Medicare Advantage plans and the Congressional Budget Office projects the share will exceed 50% by the end of the decade.
In contrast, before Covid hit, enrollment in the ObamaCare exchange was steadily falling. In the unsubsidized part of the market – with 40% of potential participants – enrollment dropped almost in half between 2016 and 2019.
What makes the difference?
The Medicare Advantage system works as well as it does because it uses a sophisticated risk-adjustment system to compensate healthcare providers for their participant’s pre-existing conditions. Medicare Advantage is the only place in our entire healthcare system where doctors who discover a worsening of a health condition in a patient can send the information to the insurer (Medicare) and get a higher premium payment for their health plan.
Goodman says if ObamaCare health plans were allowed to specialize and if the Medicare Advantage approach to risk adjustment were adopted in the ObamaCare exchanges, health plans would have greatly improved incentives to care for the sick – instead of the current system that incentivizes them to avoid the sick. With these changes, those on ObamaCare could have the same options and quality of care now reserved for Medicare beneficiaries.
What about those high deductibles?
Current ObamaCare deductibles can be as high as $8,550 per individual and $17,100 per family. The average family of four, without a subsidy, faced an annual bill of $25,000 before any benefits kicked in. This is worthless insurance and declining enrollment figures show people have figured this out. The solution is letting families purchase the coverage they need – without the government making those decisions for them. Instead of paying for emergency room visits for people who can’t afford the out-of-pocket expenses for primary care, public funds could be used instead to pay for very large expenses – those that are rare and unusual and difficult to insure for in the private marketplace. People need the freedom to choose what works for them.