It would be a terrible thing giving money directly to those on Ocare instead of the insurance companies, right?
Obamacare could collapse under Trump’s new plan, policy experts say
Republicans are putting their own spin on subsidizing Americans’ health care: Route money away from insurers and put cash directly in consumers’ hands to give them more choice over their coverage.
Economists and policy experts suspect President Donald Trump and GOP lawmakers are presenting this alternative to extending the enhanced Affordable Care Act subsidies because they want to undermine or even replace Obamacare — something the party has repeatedly failed to do in the past.
Ocare is probably not going away. How many big federal programs ever go away? But, can it be changed into something that actually works for the citizens? Something that makes sense?
With direct cash payments from the federal government into special accounts, “healthy people could get much cheaper insurance that has medical underwriting and doesn’t cover preexisting conditions, but that would leave much sicker people in the ACA pool, and likely send it into a death spiral,” said Larry Levitt, executive vice president for health policy at KFF, a nonpartisan research organization.
If younger, healthier consumers choose such so-called junk health plans — with lower costs and less robust coverage — or don’t use the money for health insurance, it could throw off the balance of risk and prompt insurers to exit the market entirely, Levitt and others said.
Republican proposals for the direct payments still lack key details. They include creating health savings accounts or flexible spending accounts for millions of Americans and depositing cash into them instead of providing the enhanced premium subsidy that goes directly to health insurers.
How many in the existing pools are sick, and how many are just getting insurance because they are required to by law? What if this plan ends with the insurance companies lowering premiums and deductibles? Don’t forget, one of the original complaints about Ocare plans was that deductibles made the insurance unusable. We knew this back in 2013.
Democrats appear unlikely to buy in.
“We are not going to come up with that deal during open enrollment,” said Sen. Chris Murphy (D-Conn.). “Right now, the only option is to extend the subsidies for a year.”
How about putting language in a subsidy extension, with the GOP plan kicking in prior to the next enrollment year?
Providing health insurance subsidies, like the enhanced Obamacare tax credits, meanwhile, can have an upward impact on health care price inflation, because people are more likely to seek out medical care if they’re insured, they said.
But the Republican plans, depending on how they’re designed, could prompt fewer people to enroll in ACA marketplace coverage.
What if Ocare was changed so that the insurers could offer bare-bones plans via the exchange, ones with lower premiums and deductibles, higher copays because lots of the healthies rarely use the plans, ones that fit the people signing up? This can actually help reduce costs in the non-Ocare market.
But former Trump adviser Brian Blase, now president of the influential right-leaning think tank Paragon Health Institute, argues that some plans to divert funds from insurers and into Americans’ pocketbooks would have little to no impact on Obamacare enrollment.
Paragon wants Republicans to let the enhanced ACA subsidies expire and has been promoting a new health care plan that would allow some lower-income Obamacare enrollees to take a portion of the government cost-sharing subsidies that go to health insurers and instead use them as health savings account deposits.
It’s funny, because people thought Ocare was meant to put health insurers out of business originally, which would require the government to be the insurer. To get to single payer. Who knew that it would end up being a way to reward those companies and make them reliable Democrat donors.
Read: Too Bad: Obamacare Could Collapse Under Trump’s Plan »
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