The Concept of a Plan for the Trump health care plan that will (forever) be available in just two more weeks is risk rating with high cost risk pools.
Risk rating means insurers are allowed to charge individuals different premiums as a function of their predictable costs so that the insurance is truly “hit by a meteor” coverage instead of a payment club for predictable and anticipated expenses. This means men between 18 and 40 will be charged a substantially lower premium than women of the same age and general health as women are capable of getting pregnant. This means people with a family history of colon cancer will pay more than people whose family don’t have that nasty gene combination. It means old people pay way more than young people.
It also means, without anything else, that people who have very high, recurring and very predictable costs are priced out of any competitive market. The policy solution then would be high cost risk pools where state or federal funding covers a substantial portion of the premiums.
The policy concept is that healthcare spending is extremely skewed to the right and concentrated. If the top 5-10-15% of spenders can be removed from the main risk pool, then the premiums collected in the main risk pool can be 40-50-60% lower.
If the high cost risk pool is funded well enough, then this could work where the private market is used to insure against one-off events, health savings accounts pay for medium size events and the high cost risk pools act as a pressure relief valve for costs after someone is diagnosed with cancer or has very predictable high cost diseases/conditions. There could be generous subsidies involved depending on your value system. And this could work.
It really depends on the high cost risk pool being very well funded.
Given that the Trump Administrations health policy plans were to dramatically reduce federal healthcare expenditures for anyone who would not benefit from generic Republican tax policies in 2017, that assumption that the high cost risk pool would be well funded is absurd.
But I want to make a very simple point. We already operate two high cost risk pools. We just don’t call them that and there are a few odd features in them that disguise the programmatic intent.
Medicare is a high cost risk pool. It covers two high cost groups. First it covers almost everyone over Age 65 until death. Secondly, it covers individuals with long term disabilities, end stage renal disease and ALS. None of those groups are cheap. There is some interesting gaming on optionality between Medicare, the ACA marketplaces and kidney disease/dialysis companies but the fact is that Medicare pays for a very expensive portion of the population.
Medicaid is the other high cost risk pool. It covers individuals with substantial developmental delays and disabilities, individuals needing substantial home health care and community supports, individuals who are on disability, and individuals who are in long term care/nursing homes. Those are all expensive groups. The two weird aspects of Medicaid in terms of eligibility is that it also covers a bunch of dirt cheap kids and pregnant women who may have an expensive event but quickly revert back to being relatively cheap again.
Medicare and Medicaid already suck up a good amount of the most predictably expensive people in the United States. The commercial markets are already fairly cherry picked markets where most of the bad risk is somewhere else.
Baud
Basically, they want the world before Obamacare. They have to. There’s only so many ways to skin the health financing cat. Either you spread the cost of risk or you allow differential pricing based on risk. Republicans always prefer price discrimination just like they prefer other forms of discrimination.
gene108
Kind of fascinating to me that Republicans, who when they controlled the House after 2011, passed 60+ bills to kill Obamacare. IIRC, the first bill was entitled “Repeal the Job Killing Healthcare Law Act”, back in January 2011.
They now have to find ways to lie to people to think they can come with something that might fool people into thinking their plan is better than Obamacare. They tried this in 2018, and failed miserably in convincing the public their plan was any good.
Baud
@gene108:
Can you imagine where we’d be as a country if people appreciated Obamacare from the beginning?
trnc
Yup. And under the whiff of a concept of a plan, they’re likely to be snuffed.
IMO, “concept of a plan” doesn’t mean there’s not really a plan. It means they don’t want to tell voters what that plan is.
Mai Naem mobile
@Baud: the GOP don’t want anything. They just want to use the issue to motivate their voters against some fictional commie pinko healthcare . I’ll guarantee you MTG, Gaetz or any of those people even understand O-Care or the US healthcare system. We have honest to god the stupidest healthcare system in this world(50 different states,Medicare,Medicaid,VA,IHS,Workmens comp,CHIP,COBRA,ERISA,SSI,private insurance.) The fact that O-Care passed is freaking a-mazing.
Starfish
Please die in the hospital parking lot is the GOP health care plan.
None of these kids who get to stay on their parents health care plans until they are 26 know it though.
Hoodie
@Mai Naem mobile: They mainly want to serve their donor base, who don’t want to pay taxes and like to use health insurance as a way of reducing employees’ leverage in the employment market. National health insurance is anathema because it disempowers the hierarchy. Generally, they divide the market between one group including the wealthy and/or useful and a second group including the poor or unemployed. Risk and efficiency are secondary considerations.
gkoutnik
Thanks for a concise, cogent, understandable overview of a complex – and hugely important – topic.
Steve LaBonne
@Baud: That would be a very different country, one not crippled by the politics of the crab bucket. Trump would be just a dimly remembered reality TV performer. Sadly we are (still) not that country by a long shot.
Kosh III
If I could wave a magic health care wand:
Abolish all other plans, Medicaid, VA, SCHIP whatever and put everyone on a Medicare program that covers all costs for everything, medical dental vision mental etc.
GOP plan is as it always has been: “get sick and die.”
Another Scott
Thanks for this.
Thinking out loud here…
It’s easy for someone who is 35 to look at their pay stub and see X% going to federal taxes, Y% going to state taxes, Z% going to Social Security, W% going to Medicare, etc., etc., and doing the math and saying “I’d have a whole lot more money if I didn’t have to pay all these crazy taxes that don’t benefit me….”
Similarly, while people get upset about the cost of “foreign aid”, they can’t point to a line on their pay stub for “foreign aid”, so it’s a general annoyance rather than a focused rage.
We all know that the money goes to the same places – some giant spreadsheet at the Treasury and in the states. They’re all the same dollars. Dollars come in, dollars go out. It seems, naively, without sufficient caffeine this morning, that making things universal and paid out of a single pot of money that everyone contributes too might make it less of a punching bag and easier to rationalize and modernize as things change.
Would it be easier, or harder, to sell a (quasi – recognizing that the military is different, some other groups are different) one-size-fits-all national health insurance system to the public if it were funded out of general tax revenue rather than these wink-wink nudge-nudge trust funds? “You pay taxes, you get coverage for medical expenses – it’s part of being an American.”
Of course, we all remember that a lot of the GQP grumbling about Obamacare was their (stated) recognition that it would be a big Democratic win on passage because it was a good bill, and would invite future expansion of government benefits (allowing us to start catching up with the rest of the civilized world…). So, they demand dedicated revenue streams when forced to pay for something – it gives them opportunities to attack those revenue streams later… Yet another reason to vote the monsters out and vote in sensible people who actually want to do good for the country…
Anyway, just some musings this AM.
Thanks for all you do.
Cheers,
Scott.
Anonymous At Work
Lies! It’ll be available next week, after we finish “Infrastructure Week”.
Yutsano
@Kosh III: Medicaid already covers all those things. The problem is Medicaid is not only severely underfunded their payouts to doctors are terrible. We certainly have enough money in this country to expand Medicaid coverage to everyone (and rename it so it’s not perceived as just insurance for the unworthy poors) plus increase the payouts so there’s incentives for doctors to accept it.
But as Dr. Mayhew has taught us, it has to get past the magic formula. 218-60-1-5. Good luck with that.
Ruckus
@Baud:
Bingo!
Ruckus
@trnc:
Given the person who used “concept of – well anything,” which anyone with even a modicum of intellect knows is pure bull and shit, means their extremely likely concept is to end any and all government involvement in or any kind, type, or concept of government control over healthcare and healthcare insurance. Which of course would destroy healthcare for a rather large segment of our population. Because they don’t give half a toot about anything but their bank accounts (and staying out of that hotel with bars for all the doors and 20 ft walls surrounding it)
H-Bob
@Starfish: No, as Colbert commented back in 2009, the Republican healthcare plan (and the Trump ‘concept of a plan’) is and has always been “Don’t Fear the Reaper”!
They just don’t want another copyright infringement suit.