To The Daily Sun,
President Trump recently said, "Nobody knew health care could be so complicated." While our numerous health care problems are complicated (and we all knew that), the issue of health insurance is relatively straightforward.
Traditionally, an insurer, in exchange for money (the premium) contracts with the insured to pay money (up to a maximum limit) if certain foreseeable, but unlikely, events occur during the policy period. Thus, virtually everyone insures their home (you can't get a mortgage without it) and their cars (most states mandate at least third-party liability coverage).
Normally, the insured bad event doesn't happen; the insurer keeps the premium and the insured renews the policy. If your house burns down, or you crash the car, the insurance company will pay (usually), but at renewal time, the premium will likely increase or, if the insurer deems you too great a risk, it will refuse to renew the policy (good luck finding a replacement). This is the way medical insurance worked until the ACA (Obamacare). A young healthy person could buy an individual annual policy, with a million-dollar limit, for a very reasonable premium. An older person with minor health issues could buy a policy, but it would cost more. A person with a debilitating disease couldn't buy a policy at all.
If a person with health insurance got seriously ill, the insurer would pay medical bills during the policy year (up to the maximum limit), but the next year's premium could skyrocket or the insurer could deny coverage entirely. This left the sick person with the following stark options: (1) delay seeking treatment until the condition was acute (federal law requires hospitals to treat everyone, but also allows the hospital to sue the patient for reimbursement); (2) pay for care until bankrupt (unless he/she is rich); (3) die; or (4) all of the above.
Fortunately, most Americans don't face this problem because they get their medical coverage from either: (1) a large private employer (as long as they keep their job) who has negotiated a favorable group contract with an insurer; or (2) the federal government (Medicare, Medicaid, Tri-Care for vets). Unfortunately, in 2015 (according to the Kaiser Foundation), around 22 million Americans relied upon the non-group market and another 29 million had no insurance at all.
Disciples of Ayn Rand (Speaker Paul Ryan, most famously) believe philosophically that it is better for the 50 million at risk Americans to go bankrupt or die than to have their health care subsidized by the healthy and wealthy. President Obama (and the Democrats) believed otherwise and thus the ACA was born.
The ACA forbids insurance companies from: (1) denying health insurance to people with pre-existing medical conditions; (2) charging them more for insurance; and (3) limiting the dollar amount of coverage available to treat their conditions. This, of course, makes a total mockery of insurance principles. What if property insurers were obligated to sell you a policy after your house burned down, at the same rate charged every other homeowner, and pay whatever the damage was. Would anyone in their right mind buy a policy before the fire? I wouldn't. So, our health insurance companies have the option to either: (1) raise everybody's premiums to cover the obligation to insure sick people who never had insurance before; or (2) not offer individual policies at all. Not surprisingly, insurers have done both.
The ACA offers both a stick and a carrot to entice younger, healthier, Americans to buy health insurance. First, it contains the "individual mandate" (first proposed by the conservative Heritage Foundation in 1989), requiring all Americans to either have health insurance or pay a tax penalty. Second, it provides premium subsidies to less affluent Americans (and Medicaid expansion for the poorest who don't earn enough to buy insurance), both of which are financed by new taxes on the wealthiest Americans (primarily, those making more than $250,000 per year).
To date, the ACA's carrot and stick have not enticed enough healthy Americans to buy insurance on the exchanges and therefore premiums are rising to cover the costs attributable to insuring sicker people. There are three potential solutions: (1) repeal the ACA and go back to the old system of allowing non-affluent Americans to remain chronically ill, go bankrupt and/or die; (2) "fix" the ACA by raising the tax penalties for non-compliance and increasing the premium subsidizes (i.e. more taxes on the rich); or (3) pass Bernie Sanders' "Medicare for All" plan.
The Republicans' American Health Care Act (Trumpcare; sorry: Ryancare) is a total fraud. It doesn't repeal the ACA's rules regarding covering Americans with pre-existing medical conditions (permitting Trump to tweet that no one will lose coverage); but it does repeal the individual mandate and the trillion (roughly) dollars in new taxes on the rich earmarked for premium subsidies and Medicaid expansion. As a result, fewer healthy Americans will buy policies on the exchanges and insurance companies will either raise premiums through the roof or withdraw from the individual market (the more likely scenario).
So, whether Trumpcare passes or the Obamacare remains the law (Trump signed an executive order forbidding the IRS and federal agencies from fully enforcing the ACA), affordable health insurance for sick Americans is likely doomed. Insurance companies cannot, and will not, pay more out in benefits then they take in in premiums. Each political party will blame the other for the resulting mess.
In the end, it comes down to a simple philosophical question: should sick Americans bear fully the adverse consequences of their conditions or should the healthy and wealthy partially subsidize the medical costs of their treatment? The answer is up to each and every voter.
- Category: Letters
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