This will be a multi-parter on the P-Care proposal from Republicans. I’m busy today.
Section 101: Repeal Obamacare
Standard Republican boilerplate with a lie in the first sentence as healthcare costs as a proportion of GDP actually decreased last year.
Section 201: Adopt Common-Sense Consumer Protections
Reinstate the popular to the employed middle class parts of Obamacare. Keep kids on parents’ insurance until the end of age 26, disallow life time limits. Tweak the age rating bands from a 3:1 ratio (Obamacare law) to 5:1 (pre-Obamacare usual and customary) despite that change having little acturial impact. The 3:1 ratio is roughly equal to the actual expected cost ratio for 21 to 64 year olds.
Guaranteed renewability is the Republican means of dealing with pre-exisiting conditions. However medical underwriting will now be allowed so the incentive will be for insurance companies to go do a very thorough record review to look for application ommissions such as failure to list acne as a pre-exisiting condition to deny cancer claims. It says there will be strong regulation, but really, how stupid are we to expect strong regulation from a Republican bill?
Section 202: Pre-exisiting conditions covered based on continious coverage
Continious coverage is the key here instead of the banning of medical underwriting. Basically, if someone is able to keep covered themselves insured, a new policy can’t be medically underwritten against them, they get general rates. The problem is people who have significant health problems AND significant income variation are highly likely to have months where they can not keep continous coverage. One bad stretch and a person is priced out of health insurance for life (although that life will be fairly short)
Section 203 – Empowering Small business and individuals
Basically allow for small business to pool resources together to reduce acturial variance and TAX CREDITS. Or we could just use the SHOP exchanges to do the same damn thing.
Refundable tax credits to individuals and families up to 300% Federal Poverty line. Obamacare has refundable tax credits up to 400% of FPL. Don’t allow those tax credits to be used for abortion (which basically would mean the individual health insurance market would offer very few if any policies covering abortion). Value of those credits are significantly reduced compared to Obamacare credits. For intsance a single 64 year old at 200% FPL would get a $3,720 Republican credit while s/he gets a $6,100 Obamacare subsidy. Two 64 year old non-smokers at 200% FPL would get $13,000 in subsidies from Obamacare or $8,800 from this Republican bill.
Oh yeah, since the Republicans have re-instated medical underwriting, those 64 year olds have the pre-exisiting condition of being OLD. They won’t get Obamacare rates, their rates for anything that provides decent coverage will destroy their subsidy in three or four months.
The idea behind the Republican bill’s smaller subsidy is that people have too much good insurance as it is, so a smaller subsidy will force more people to get catastrophic coverage only and then pay for day to day expenses out of pocket. The threat of destitution will make people extremely cost sensitive and thus extremely efficient shoppers.
Section 204 — More power to states
States can automatically enroll people into coverage equal to their subsidy value. I don’t have a problem with this. Given subsidy levels, these default plans will have deductibles in the $15,000 to $20,000 range. High risk pools will be formed again and be chronically underfunded. Interstate compacts are allowed (as they are now for regulation and selling of insurance, but the Georgia and Maine examples show that few companies really want to sell across state lines)
Section 205 Expand HSAs and Consumer Directed healthcare
Allow pre-tax dollars to pay for non-prescription and over the counter goods and services. Expand allowable uses of HSA dollars. Either of these proposals is worth talking about as they are fairly small bore.