Long before the buildup to the passing of the Affordable Care Act millions of Americans knew the healthcare system needed some serious reforms. That’s not surprising to anyone. And long before the ACA’s passing, organizations like the National Association of Health Underwriters and like-minded organizations saw some common-sense solutions to help the country’s 314 million residents receive better healthcare.
Some of the proposed ideas many of us heard of. Things like allowing insurance companies to compete nationally across state lines and reconfiguring caps and limits on medical malpractice lawsuits, which often drive up costs of physicians and healthcare. Those ideas, while useful, were largely derided as being a drop in the bucket of healthcare costs, but other ideas have long been proposed.
Consumer-driven plans keeping costs and insurance affordable
One model has long been used and championed in Indiana. Called The Healthy Indiana Plan, or HIP, the State of Indiana issues low-income Hoosiers with a health savings account (a form of savings account used only for healthcare) and subsidizes some or all of the costs of funding the HSA. It works by setting up separate HSAs for applicants and giving them a health insurance plan through a private insurer. It’s the same kind of plan most anyone can buy on the market as an individual. Because of HIP’s large group pool no one was turned away for pre-existing health conditions or age (minors are eligible for a separate kind of coverage).
So assume Joe Hoosier makes minimum wage annually. Joe could apply to HIP and receive a high-deductible health insurance plan. It might have a deductible of $5,000. The plan is subsidized by the State. But the deductible is the responsibility of Joe. Depending on his income, he could receive some help with that. He could receive $2,000 a year based on his income and other health factors. Joe could use that $2,000 on medical visits, the dentist, eyewear, and even over the counter medicine. Or he could save it or spend only a portion. Next year he’d receive another $2,000. Joe could also contribute his own money if he wanted to. After a couple of years Joe’s $5,000 deductible coverage would effectively be paid for by the State (and his own money, if any) because the money rolls over year after year.
This kind of plan has proven popular among users and funders. Consumers retain the power of being a consumer. They can choose where to go, what to spend their money on, and it encourages them to seek out lower prices if possible. From the State’s perspective, taxpayer dollars can be distributed in chunks, it’s controlled, you always know how much money is budgeted, and the only thing holding back the expansion of the program is the Federal government.
The Affordable Care Act is extremely hostile to HSA-based plans. It drastically reduces coverage types and amounts for deductibles and programs like HIP are tossed in favor of expanding Medicaid and Medicare. While the benefits of Medicaid and Medicare are many, America’s ability to solve big problems unlike other countries should be tapped. While many argue and agree that a single-payer system “like European countries” is an excellent healthcare system, America has the unique standing to see where that’s gotten them. It’s not that American insurers and agents don’t want people to receive healthcare — quite the opposite, actually. We just have to be realistic in understanding how it’s paid for and who’s paying for it.
Everybody in the pool
In the run-up to the ACA’s passing the deal for insurers was clear. The government said to insurance companies, “We want you to have lower payout and lower premiums to consumers in exchange for a higher number of people in the insurance pool.” So far we’ve received lower payouts and premiums, but the number of people in the pool hasn’t drastically increased. At 7 million new applicants, it’s estimated a majority of those applicants are people with pre-existing conditions or employees of small businesses who opted to not insure their employees anymore.
While it’s great that these people can receive healthcare now , what’s alarming to agents and insurers is the lack of truly new, healthier people joining the pool. Without them, the system is on pace to collapse. Further complicating matters is states that have refused to expand health exchanges have done so on the grounds that future costs is far outside of their control are further reducing new applicants. It’s a catch-22 for those states because the only guarantee that costs will be paid for and not passed on to their budgets is a promise from the Federal government. States can’t legally print their own money or borrow as heavily as the Federal government can. Ask yourself how much you trust the Federal government and recognize that’s where State legislatures and governors are asking themselves.
Now that the ACA has passed, organizations like NAHU and IndyAHU are dealing with the realities of the law, and states like Indiana are trying unsuccessfully to champion the consumer-driven health plans like HIP that proved popular but limited by ideology and nebulous restrictions. It’s not that any organization didn’t want people to be insured; it’s how they’re insured that’s important and ensuring it’s a sustainable model for the future that people disagree on.
