Not Fake News – ACHA Gets the Thumb’s Down

After Friday’s no-go on the House Committee’s “Repeal and Replace” proposal, Trump has openly criticized the Right, namely the Freedom Caucus, the Heritage Foundation, and the Club for Growth, for its opposition to the bill. Naturally, Dems were not going for it, but these conservative groups had the power to tip the scales in favor of the ACHA and they responded “NAY.”

Now the Trump Administration is going to sit back and watch Obamacare go down in flames.  Feeling both vindicated that their prediction of imminent failure was correct and defeated over their inability to sell Washington on their plan to turn things around.

When people hear Obamacare is doomed to fail, it doesn’t mean the whole ACA is a failure. What’s really circling the ACA toilet is the individual health insurance market known as The Exchange.

Premiums have shot up on the exchanges, carrier and plan choice has significantly declined and new enrollments are down.  The opposite of what was predicted to occur on all three fronts.

At first, the attractive feature of the ACA was its promise of government subsidies to help poor people offset cost increases. Subsidies do help half of all eligible individuals on the ACA.  But, the other half, the working poor who make too much to qualify for the subsidies ($48K/yr. per individual), get nada. For them, the ACA plans are NOT affordable.

Plan and carrier choice is huge concern. While the CBO stated the exchanges are “stable in most areas,” about 42% of those buying individual coverage on the exchange have only one or two carriers to choose from and just a couple plan design options.

Millions of people cannot afford to buy in to The Exchange or if they can, their choices are so limited that they end up with a lousy plan for “sick” money.

And, the death spiral has already begun…. The ACA cannot support the financial weight of the sick and poor people that signed up and are using the plan like gangbusters while very few young and healthy sign ups are occurring to offset this burden.  Carriers are making for the EXITs and funding for the subsidies is hanging on the side of a cliff.

If I was given the chance to chime in on this situation, I would suggest the new Administration find some folks on the other side of the aisle that want to change the course of the ACA before disaster hits and it’s going to happen. They must find a palatable compromise that shores up funding and access inadequacies created by the ACA, gives compliance relief to employer plans and loosens the vice grip that keeps the market from crossing state lines.

Posted in: Affordable Care Act

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