February 24, 2017
Why Most Patients Say ‘Hell, No’ to Obamacare
By Michael T. Hamilton
A professor and student at the Harvard T.H. Chan School of Public Health recently argued Republicans in Congress are trying to send health care to hell in a handbasket by repealing and replacing the Affordable Care Act (ACA). “It’s the Republican Party, standing alone, who wants America to return to the medical underwriting circle of hell,” state the authors in an op-ed published at RealClearHealth.com on February 15.
Cheeky devils. If the road to hell is paved with good intentions, Obamacare proponent arguments are the street signs. The fact is purging ACA mandates would force health care providers and insurers to give patients more of what patients want, as opposed to what former President Barack Obama, progressive-liberal ideologues, and crony interest groups want patients to want.
Republicans have proposed Obamacare replacement plans that would let insurers and customers evaluate each other’s risks and potential rewards before doing business together. When consumers do this, it’s called “shopping around.” When insurers do it, it’s called “underwriting.” Closely related ideas include “exercising free will,” “thinking ahead,” “budgeting,” “living within your means,” and “not taking deals you know you can’t afford.”
Mutual evaluation helps each party get a satisfying bang for its buck. Obamacare restricts mutual evaluation, so Obamacare-compliant insurance products are lousy and expensive — even for people receiving premium subsidies.
The prime example of the ACA’s restriction of people’s freedom to evaluate and reject purchases is the individual mandate and its tax penalty. ACA threatens families with fines equal to the greater of $695 per adult or 2.5 percent of their income, to pressure them into spending hundreds or thousands of dollars on Obamacare premiums for health insurance with a $13,000 family deductible, even if the family thinks this an unwise purchase.
Merely buying health insurance is not enough, however, to escape the ACA tax penalty. Obamacare’s 10 essential health benefits further restrict patient choice by coercing people to buy certain kinds of health insurance — expensive kinds.
The law’s essential health benefits mandates also pressure insurers to sell products to people not demanding them. What changed insurers’ minds is the artificial demand ACA created for these products by threatening to fine people for not buying them. Another persuasive point to insurers was the law’s guarantee federal taxpayers would buy these expensive plans on patients’ behalf.
Thus, Obamacare’s restrictions of patients’ and insurers’ freedom to reject bad bargains manipulates them to make deals most people with good horse sense would reject.
Another example: Sensible people with a reasonable expectation they will never pilot an aircraft do not buy aviation insurance. Yet ACA’s essential health benefits stipulations for insurance plans effectively require patients to buy insurance for conditions physically impossible or improbable for some patients to experience, including pregnancy and newborn care, mental health and substance abuse treatment, and pediatric care.
ACA essential health benefits also require insurance plans to cover health care expenses people can obtain far more cheaply by negotiating with and paying health providers directly. These include preventive care, checkups, labs, and certain tests. Obamacare-insured patients pay through the nose for these services, because providers charge insured patients far more than direct-pay patients.
Unfortunately, people who have paid an arm and a leg for an Obamacare plan feel obligated to use their insurance to pay for routine services, in the hope their family will meet their $13,000 deductible by Thanksgiving so they can enjoy the illusion of having free health care through New Year’s Eve. Which circle of hell are they in?
Repealing ACA’s individual and essential health benefits mandates would unleash demand for health insurance products patients want — plans designed to cover catastrophes, not routine services, and not pediatric care for a childless couple over 50.
To help people with preexisting conditions, the most popular Republican proposals call for subsidizing high-risk pools (HRPs) of patients with preexisting conditions in one form or other. These subsidies would most likely be funded by a combination of state and federal taxes.
Wisconsin, a state that had a successful HRP (not all state HRPs worked) until Obamacare essentially shut it down, required insurers to chip in as well, according to Mark E. Litow, a retired health actuary who served on the board of the Wisconsin HRP, and Merrill Matthews, a resident scholar with the Institute for Policy Innovation, writing for RealClearHealth.com on February 16.
In other words, Republicans plan to offer help to people with preexisting conditions directly — instead of indirectly through Obamacare premiums subsidies, incentives for insurers to raise premiums, individual mandates, essential health benefits mandates, Medicaid expansion for able-bodied adults, and emphasis on using health insurance to pay for routine care.
Freedom to choose health care providers and insurers, and assistance for uninsurables? If that’s hell, hand me a pitchfork.