Dr. Goodman’s article is a fantastic foray into the dark history organized medicine, culminating with a brutally honest assessment of the cartel that resulted. He gives a great preview of the good stuff in Greg Scandlen’s new book, Myth Busters: Why Health Reform Always Goes Awry, summarizing the oft-repeated myths we hear about healthcare economics thrown around like dogma.
“Just as health insurance is not health care, so too health insurance reform is not health care reform. Yet, because the ACA got so much press, and many previously uninsured individuals did secure insurance (giving us all the warm and fuzzies), the result was a nationwide misconception that affordable insurance equates with affordable health care. For many, ObamaCare is therefore viewed as a success because millions of uninsured Americans are now insured.
Alternatives to our current over-priced and dysfunctional health insurance market are often biased, and thus limited, by our current operational and regulatory structure. These structures are so entrenched in our healthcare psyche that it makes it difficult sometimes to set these aside in our minds while entertaining how another approach might work.
If we view all alternative plans to replace the Affordable Care Act from the vantage point of “what is”, then there is little room for anything other than attempts at further regulating the problems away. If one presupposes that the current regulatory framework remains unchanged, indeed the same framework has served to suppress the very market we wish create, then of course that market will not be created.
The dilemma facing alternative healthcare plans being considered to replace the ACA is particularly evident when it comes to the issue of selling health insurance across state lines. A brief on this subject published by the American Academy of Actuaries in February of 2017 speaks to the the main challenges facing the advent of a viable interstate market for the sale of health insurance.
Lots to like and consider here. We need more details about how tax equalization in the group market vs the individual market will be handled. The expansion of uses and benefits of HSAs is robust and will go along way to establishing more ways to self-insure and less reliance on networks and government programs; both are a good thing. The flexible, market-friendly Interstate Market for Health Insurance Cooperative Governing of Individual Health Insurance Coverage will be a welcome change. Again, devil is always in the details. Stay tuned for more details and insightful analysis here on the Sovereign Patient; we will post them as available.
Effective as of the date of enactment of this bill, the following provisions of Obamacare are repealed:
- Individual and employer mandates, community rating restrictions, rate review, essential health benefits requirement, medical loss ratio, and other insurance mandates.
Protecting Individuals with Pre-Existing Conditions:
- Provides a two-year open-enrollment period under which individuals with pre-existing conditions can obtain coverage.
- Restores HIPAA pre-existing conditions protections. Prior to Obamacare, HIPAA guaranteed those within the group market could obtain continuous health coverage regardless of preexisting conditions.
Equalize the Tax Treatment of Health Insurance:
- Individuals who receive health insurance through an employer are able to exclude the premium amount from their taxable income. However, this subsidy is unavailable for those that do not receive their insurance through an employer but instead shop for insurance on the individual market.
- Equalizes the tax treatment of the purchase of health insurance for individuals and employers. By providing a universal deduction on both income and payroll taxes regardless of how an individual obtains their health insurance, Americans will be empowered to purchase insurance independent of employment. Furthermore, this provision does not interfere with employer-provided coverage for Americans who prefer those plans.
Expansion of Health Savings Accounts:
- Tax Credit for HSA Contributions
- Provides individuals the option of a tax credit of up to $5,000 per taxpayer for contributions to an HSA. If an individual chooses not to accept the tax credit or contributes in excess of $5,000, those contributions are still tax-preferred.
- Maximum Contribution Limit to HSA. Removes the maximum allowable annual contribution, so that individuals may make unlimited contributions to an HSA.
- Eliminates the requirement that a participant in an HSA be enrolled in a high deductible health care plan. This section removes the HSA plan type requirement to allow individuals with all types of insurance to establish and use an HSA.
- This would also enable individuals who are eligible for Medicare, VA benefits, TRICARE, IHS, and members of health care sharing ministries to be eligible to establish an HSA.
- Allowance of Distributions for Prescription and OTC Drugs o Allows prescription and OTC drug costs to be treated as allowable expenses of HSAs.
- Purchase of Health Insurance from HSA Account o Currently, HSA funds may not be used to purchase insurance or cover the cost of premiums. Allowing the use of HSA funds for insurance premiums will help make health coverage more affordable for American families.
- Medical Expenses Incurred Prior to Account Establishment o Allows qualified expenses incurred prior to HSA establishment to be reimbursed from an HSA as long as the account is established prior to tax filing.
- Administrative Error Correction Before Due Date of Return o Amends current law by allowing for administrative or clerical error corrections on filings.
- Allowing HSA Rollover to Child or Parent of Account Holder o Allows an account holder’s HSA to rollover to a child, parent, or grandparent, in addition to a spouse.
- Equivalent Bankruptcy Protections for HSAs as Retirement Funds o Most tax-exempt retirement accounts are also fully exempt from bankruptcy by federal law. While some states have passed laws that exempt HSA funds from being seized in bankruptcy, there is no federal protection for HSA funds in bankruptcy.
- Certain Exercise Equipment and Physical Fitness Programs to be Treated as Medical Care. Expands allowable HSA expenses to include equipment for physical exercise or health coaching, including weight loss programs.
- Nutritional and Dietary Supplements to be Treated as Medical Care o Amends the definition of “medical care” to include dietary and nutritional supplements for the purposes of HSA expenditures.
- Certain Providers Fees to be Treated as Medical Care o Allows HSA funds to be used for periodic fees paid to medical practitioners for access to medical care.
- Capitated Primary Care Payments o HSAs can be used for pre-paid physician fees, which includes payments associated with “concierge” or “direct practice” medicine.
- Provisions Relating to Medicare o Allows Medicare enrollees to contribute their own money to the Medicare Medical Savings Accounts (MSAs).
Interstate Market for Health Insurance Cooperative Governing of Individual Health Insurance Coverage:
- Increases access to individual health coverage by allowing insurers licensed to sell policies in one state to offer them to residents of any other state.
- Exempts issuers from secondary state laws that would prohibit or regulate their operation in the secondary state. However, states may impose requirements such as consumer protections and applicable taxes, among others.
- Prohibits an issuer from offering, selling, or issuing individual health insurance coverage in a secondary state: If the state insurance commissioner does not use a risk-based capital formula for the determination of capital and surplus requirements for all issuers. Unless both the secondary and primary states have legislation or regulations in place establishing an independent review process for individuals who have individual health insurance coverage; or The issuer provides an acceptable mechanism under which the review is conducted by an independent medical reviewer or panel.
- Gives sole jurisdiction to the primary state to enforce the primary state’s covered laws in the primary state and any secondary state.
- Allows the secondary state to notify the primary state if the coverage offered in the secondary state fails to comply with the covered laws in the primary state.
Let’s pretend a non-partisan, unelected committee had drafted a health reform plan to be reviewed and debated by the people of each state and then voted on with a simple up or down vote. If a minimum of 38 states passed it, then it would become the law of the land. Let’s assume this health reform plan contained the following characteristics:
Read the entire article via Defending Public Policy: What’s in a Name? | Robert Nelson, MD | LinkedIn.
Installment #3 of Components of Optimal Health Insurance will discuss how regulatory and tax policy has contributed to the health care insurance crisis by promoting “job-lock”. Tax laws and insurance regulatory policy need to change in order to affect real health insurance reform.
Here are some facts and some data from a Rand study published May 6, 2015:
- ACA was signed into law in March of 2010.
- The ACA insurance exchanges (referred to as ObamaCare) were launched in 2013 with first open enrollment starting in October of 2013 .
- 22.8 million people gained coverage between September 2013 and February 2015 and 5.9 million lost their coverage for variety of reasons, for a net increase of 16.9 million new insured out of 42.7 million deemed uninsured.
There you have it! ObamaCare is responsible for adding 16.9 million more people to the rolls of the insured. No debate needed.
But what about the 4.4 million jobs that the market created between September 2013 and October 2015? Those new jobs, combined with more workers returning to full-time work, led to a net of 8 million more people receiving employer-sponsored health benefits according to the Rand Study published in Heath Affairs.
John Graham of the National Center for Policy Analysis believes, as do many others, that if not for ObamaCare these job numbers and indeed the entire economy would be better off, including more covered by employer-sponsored benefits.
ObamaCare was not the only thing going on at the time of this study. Excluding the 1st quarter of 2014, all of 2013 and 2014 recorded steady increases in GDP of about 3% each quarter. Even though occurring at a slow pace compared to other recoveries, there was some degree of economic growth for the three years preceding the study; which does translate into job growth along with increasing benefits such as health coverage. The beginning of persistently positive job growth started in December of 2010.
Here is a legitimate question everyone should be asking: What if the recession of 2008 had never happened, would we still have seen the same gains in insured status on net, regardless of the starting point? We need to think through this in order to know the real effect of ObamaCare on increasing the number of insured.