Overcoming ObamaCare

 

 

ObamaCare is still a problem. It’s been off the front-page headlines lately but that will change soon unless the Trump administration moves to make needed changes.

Insurance companies are submitting their 2019 rates now for approval and the early signs are frightening. Rate hikes as high as 91% will hit many consumers just before the November elections unless something happens soon.

Michael Cannon, director of health policy studies at the Cato Institute, writing in The Wall Street Journal, says President Trump has asked HHS to expand health insurance protections in a way that could make coverage more affordable and improve the outlook for ObamaCare’s risk pools. The decision rests with new HHS secretary Alex Azar.

Maryland insurance commissioner Al Redmer warns that ObamaCare is in “a death spiral.” That refers to the situation that occurs when diminishing enrollees requires raising premium prices to cover costs but further increases the decline in enrollees.

Since the Republicans have failed to repeal ObamaCare, the only near-term solution is short-term health plans that are exempt from ObamaCare’s extensive regulations. Such plans often cost 70% less, offer a broader choice of providers, and free consumers to enroll anytime and purchase only the coverage they need.

In 2016, during the Obama administration, HHS limited these short-term plans to three months in an effort to force more people onto ObamaCare plans. The National Association of Insurance Commissioners complained this reduced consumer protections and exposed the sick to even greater risk, including the risk of having no coverage. Enrollment in short-term plans fell below 100,000 in 2017, from about 150,000 in 2015.

Trump asked HHS to reverse this Obama rule last October, encouraging longer-term plans. HHS responded by proposing 12-month terms and renewal guarantees last February. A final rule was expected by June 1.

How would these new short-term plans improve the situation?

HHS’s nonpartisan chief actuary estimates 12-month terms would provide year-round coverage for an average $342 per month vs. $619 per month for ObamaCare plans. This would reduce the number of uninsured Americans by 200,000.

Cannon believes even greater benefits would come from allowing renewal guarantees. He believes consumers could purchase health insurance coverage for 90% less than the cost of the average ObamaCare plan if Azar follows through on the Trump plan. He says allowing renewal guarantees could reduce the average cost of insurance protection to a mere $86 per month – keeping more expensive patients, including those who lose employer-sponsored plans, out of ObamaCare’s risk pools.

Look for Democratic candidates to blame all our healthcare problems on the Republicans who didn’t fix the current system – though they refused to help – and promise the solution is single-payer healthcare. This is the greatest canard the American people could ever swallow. But the Trump administration could go a long way toward dampening the issue by following through with these needed short-term plan reforms.

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