First step, Repeal Obamacare. As discussed in the previous article, it has accomplished two things - get more people covered and eliminate pre-existing condition exclusions but it failed in just about every other goal.
Why did Obamacare fail? It is too complicated. The law tries to micromanage every part of the industry. Need more competition, we'll artificially create it. Benefits? The law says what will be covered. Pricing - the Federal Government adds multiple layers of bureaucracy to the State layers that already existed. Selling insurance - we'll "supplement" the current sales methods with an Exchange. And on and on...
The Three Stooges had a bit where they were plumbers and Curly goes into the bathroom to fix a leaky pipe. At the end of it, he's surrounded by a maze of pipes from floor to ceiling and the leak is still there. Obamacare reminded me of that. Everything that someone thought was wrong they added a fix for.
That leaves the question, what do we do to replace Obamacare?
Experience at the State level shows that prices are lower and markets are more competitive in States that have less regulation not more. I did a Study for the Tom Corbett Campaign during his first run for Governor and showed that rates were 1/3rd in PA what they were in NJ for individual coverage. NJ had an Obamacare like Individual market - all products were the same and heavily regulated, and since it adopted that program the rates had at first been reasonable but quickly skyrocketed. Meanwhile, while PA had a more open, less regulated individual insurance market.
So we start with less regulation is better. The next question is where should regulation take place? Ann Coulter recently wrote an article saying it should occur at the Federal level. If by that she means that Congress should pass a law extending the same protections to all health plans that exist for ERISA (self-funded) plans, I agree.
Generally that means States cannot impose mandated benefits or impose rules on how health plans set up their provider networks. Health plans create the products and benefits and contract with providers as they choose and as the market demands, and allows consumers to choose what coverage they want.
States should be permitted to continue to regulate the financial aspects of insurance companies. We don't want them going belly up. Also make health plans file a copy of their policies with States and let State insurance departments do consumer protection. Insurance companies don't have a sterling reputation as always being nice guys. The Federal Govt. has no experience regulating the financial aspects of insurers and is too far removed to do a good job of consumer protection.
One other way thing to consider is carving out certain medical conditions from insurers having to bear the cost and instead have the Government reimburse those. For example, Medicare has a special program for renal dialysis and does not let individuals with that disease enroll with Medicare HMOs. Types of diseases to consider are things with long term treatment like cancer or medical conditions that have unpredictable outcomes, like maternity. Doing that removes an otherwise unpredictable cost for health plans and would help control costs.
I see a recent news report that Congress is doing something like this with a high risk pool for insurers. I'm not sure that's really needed because the insurance industry has reinsurers to do that.
That leaves the two areas where Obamacare succeeded - getting more people covered and eliminating pre-existing condition exclusions.
If the market is competitive, if prices are controlled, if people can choose what coverage they need and can afford that will result in the people who want and need coverage being able to buy coverage.
But there are those who are financially unable to afford coverage and there are those who may be struck by something unexpected and catastrophic. For those individuals Medicaid is the safety net. Expanding Medicaid to cover more people was first proposed by President George H.W. Bush if I recall correctly. There is nothing wrong with that kind of program. I'd suggest an approach similar to the ones used in Montana and other States where the people on the expanded program have to pay some form of premium and, if unemployed, have to participate in job training or educational programs. The thing about Medicaid is if the economy is going well and people have jobs, they generally won't need Medicaid so rather than focusing on limiting people on that program, the government should be focused on stimulating the economy as a way to limit people on that program.
As for pre-existing condition exclusions do the following:
1. 2 year window where anyone with a pre-ex can buy coverage.
2. After that, expand the rule adopted in the bipartisan health law adopted in the 1990s known as HIPAA. Under that law, anyone who maintains health insurance continuously will have access to health insurance without a pre-existing condition exclusion imposed on them. The gap was in the individual market. The rule did not apply there. We need to extend it to all policies.
That way, people who need coverage can get it and not have coverage of their condition excluded as long as they stay covered. After the two years are up people who try to game the system by not having insurance until they need it will be penalized by being unable to get coverage.
One other area of regulation that has to continue - insurers cannot charge higher premiums for individuals or small groups because of a pre-existing condition. Insurers should not be allowed to price sick people out of the market.
The biggest complaints you'll hear about this approach are from the people who believe individuals should not be allowed to choose whether they want to buy coverage or not and individuals should not be allowed to choose what coverage they want included in their policies. I fundamentally disagree with the idea that someone in Washington knows what's best for every person in every part of the country in every circumstance that might exist.
It's that kind of thinking that has us in the mess we're in now and led to all the failures of Obamacare documented in my earlier article. We let legislators, their staff, and bureaucrats try to solve every problem they could think of - to manage every aspect of the industry, what coverage is included, who should be competing, what prices should be charged and we see what happened. It didn't work.
The fact is that there is no way to create a perfect law that solves every problem. You need a law that creates a good situation and a safety net to catch anyone who falls through. That's what I'm proposing.
Why did Obamacare fail? It is too complicated. The law tries to micromanage every part of the industry. Need more competition, we'll artificially create it. Benefits? The law says what will be covered. Pricing - the Federal Government adds multiple layers of bureaucracy to the State layers that already existed. Selling insurance - we'll "supplement" the current sales methods with an Exchange. And on and on...
The Three Stooges had a bit where they were plumbers and Curly goes into the bathroom to fix a leaky pipe. At the end of it, he's surrounded by a maze of pipes from floor to ceiling and the leak is still there. Obamacare reminded me of that. Everything that someone thought was wrong they added a fix for.
That leaves the question, what do we do to replace Obamacare?
Experience at the State level shows that prices are lower and markets are more competitive in States that have less regulation not more. I did a Study for the Tom Corbett Campaign during his first run for Governor and showed that rates were 1/3rd in PA what they were in NJ for individual coverage. NJ had an Obamacare like Individual market - all products were the same and heavily regulated, and since it adopted that program the rates had at first been reasonable but quickly skyrocketed. Meanwhile, while PA had a more open, less regulated individual insurance market.
So we start with less regulation is better. The next question is where should regulation take place? Ann Coulter recently wrote an article saying it should occur at the Federal level. If by that she means that Congress should pass a law extending the same protections to all health plans that exist for ERISA (self-funded) plans, I agree.
Generally that means States cannot impose mandated benefits or impose rules on how health plans set up their provider networks. Health plans create the products and benefits and contract with providers as they choose and as the market demands, and allows consumers to choose what coverage they want.
States should be permitted to continue to regulate the financial aspects of insurance companies. We don't want them going belly up. Also make health plans file a copy of their policies with States and let State insurance departments do consumer protection. Insurance companies don't have a sterling reputation as always being nice guys. The Federal Govt. has no experience regulating the financial aspects of insurers and is too far removed to do a good job of consumer protection.
One other way thing to consider is carving out certain medical conditions from insurers having to bear the cost and instead have the Government reimburse those. For example, Medicare has a special program for renal dialysis and does not let individuals with that disease enroll with Medicare HMOs. Types of diseases to consider are things with long term treatment like cancer or medical conditions that have unpredictable outcomes, like maternity. Doing that removes an otherwise unpredictable cost for health plans and would help control costs.
I see a recent news report that Congress is doing something like this with a high risk pool for insurers. I'm not sure that's really needed because the insurance industry has reinsurers to do that.
That leaves the two areas where Obamacare succeeded - getting more people covered and eliminating pre-existing condition exclusions.
If the market is competitive, if prices are controlled, if people can choose what coverage they need and can afford that will result in the people who want and need coverage being able to buy coverage.
But there are those who are financially unable to afford coverage and there are those who may be struck by something unexpected and catastrophic. For those individuals Medicaid is the safety net. Expanding Medicaid to cover more people was first proposed by President George H.W. Bush if I recall correctly. There is nothing wrong with that kind of program. I'd suggest an approach similar to the ones used in Montana and other States where the people on the expanded program have to pay some form of premium and, if unemployed, have to participate in job training or educational programs. The thing about Medicaid is if the economy is going well and people have jobs, they generally won't need Medicaid so rather than focusing on limiting people on that program, the government should be focused on stimulating the economy as a way to limit people on that program.
As for pre-existing condition exclusions do the following:
1. 2 year window where anyone with a pre-ex can buy coverage.
2. After that, expand the rule adopted in the bipartisan health law adopted in the 1990s known as HIPAA. Under that law, anyone who maintains health insurance continuously will have access to health insurance without a pre-existing condition exclusion imposed on them. The gap was in the individual market. The rule did not apply there. We need to extend it to all policies.
That way, people who need coverage can get it and not have coverage of their condition excluded as long as they stay covered. After the two years are up people who try to game the system by not having insurance until they need it will be penalized by being unable to get coverage.
One other area of regulation that has to continue - insurers cannot charge higher premiums for individuals or small groups because of a pre-existing condition. Insurers should not be allowed to price sick people out of the market.
The biggest complaints you'll hear about this approach are from the people who believe individuals should not be allowed to choose whether they want to buy coverage or not and individuals should not be allowed to choose what coverage they want included in their policies. I fundamentally disagree with the idea that someone in Washington knows what's best for every person in every part of the country in every circumstance that might exist.
It's that kind of thinking that has us in the mess we're in now and led to all the failures of Obamacare documented in my earlier article. We let legislators, their staff, and bureaucrats try to solve every problem they could think of - to manage every aspect of the industry, what coverage is included, who should be competing, what prices should be charged and we see what happened. It didn't work.
The fact is that there is no way to create a perfect law that solves every problem. You need a law that creates a good situation and a safety net to catch anyone who falls through. That's what I'm proposing.
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