If Republicans have their way with health insurance reform and you live in a Red state, you are screwed. Why? Because Republicans would like to turn over much of the decision making about your health insurance to individual states, and the overwhelming majority of states with Republican legislatures don’t have much of a track record when it comes to expanding health insurance.
The so-called ‘new’ ideas
What are these so-called “new” ideas? They are actually old ideas … ones we have been hearing about for over a decade. They didn’t work back then and they won’t work now. I wrote about this in 2010 and again a few months ago. The Republican plan rests on three basic concepts they have been pushing for a long time:
- give patients more responsibility for their care,
- fix medical malpractice, and
- let states decide what kind of insurance to offer.
I think we all know what “giving people more responsibility for their care” means – it means offering them the splendid opportunity to set up a health savings account where they can sock away all their extra money so they can spend it on a high deductible plan.
Fix medical malpractice? It sounds like an important issue because Republicans keep mentioning it, but in fact malpractice insurance costs represent less than 2.4% of rising medical costs, so it’s hardly an issue central to cost control.
Leaving coverage up to the states?
Let states decide what insurance you can buy? This is the part that is profoundly unfair and a very bad idea. Why should there be variation across states about what health care people need? Why should states decide whether or not your pregnancy is covered or whether or not you should have prescription drug coverage?
And why should state legislators in each state make those decisions, when they are so vulnerable to lobbying by drug companies or different medical specialists? The Hatch plan would give each state the right to decide what kind of services you need, in contrast to Obamacare, which defined a set of “essential benefits” for everyone.
Coverage for maternity care is a good example of what might happen if coverage were left to the states. Before last year, only 12 states mandated coverage for maternity care. It was only in 2014 that Obamacare required maternity coverage as an essential benefit for everyone.
Arlene Karidis wrote about this in healthinsurance.org back in 2011 before the mandatory maternity coverage in the ACA kicked in:
… starting in 2014, new individual, small business and health insurance exchange plans will be required to cover maternity care as an “essential benefit.” In addition, employer-sponsored plans and new individual plans will not be allowed to deny coverage for a pre-existing condition – and that includes pregnancy.
The Republican mantra is “get the federal government out of my business” (unless they want to regulate your use of birth control). Federal mandates are bad. (But state mandates are OK? There are hundreds of thousands of them). Patients should pay more (even though our health care is more expensive than any other country and our population is not healthier). If you just tell patients what things cost, they will make wise choices (like delaying care they need because it’s too expensive).
How we move backward with GOP’s plan
What would this replacement plan let states do? Let me describe a few ways:
- Require insurance plans to extend coverage to dependents to age 26 (like Obamacare does now) UNLESS a state wants to opt out.
- Prohibit insurance companies from denying you for a pre-existing condition (but only if you have continuous coverage and keep it ), but not prohibit them from charging you more for it.
- Allow states to drop maternity coverage; in fact, states could repeal many of the benefits that many insurance plans now include routinely.
- Allow states to charge older people five times more than younger people (instead of the three times Obamacare stipulates). This would hit people between 55 and 65 especially hard since they would not yet have the protection of Medicare.
- Cap the Medicaid program allotment and encourage poor enrollees to sign up for those terrific Health Savings Accounts, all the time telling them that “private insurance” is the best thing ever. Actually, Medicaid patients have an easier time seeing a doctor now because the ACA raised reimbursement rates to doctors who treat these patients. The end result of a cap on Medicaid is less money for the people who need it.
But there’s more …
- Allow subsidies in the form of means-tested tax credits up to three times the FPL (federal poverty level) – which is $11,770 a year – instead of the slightly more generous four times of the FPL in the ACA.
- You don’t “have” to be insured. And your employer does not “have” to provide insurance to you. NO mandates. Those of you who remain uninsured but get sick will count on the rest of us to pay more to cover your care. Removing the individual and employer mandates will only mean fewer people insured and higher costs.
- And this one should make every working American furious: You, as an employee, would be taxed on the value of the insurance you receive from your employer, but … your employer would still be allowed their tax break to provide it. I love that conservative economist Avik Roy heartily endorses taxing the employee side of the insurance exclusion, but believes that a cap on the employer exclusion will solve the problem.
Sending decisions about insurance back to the states will only result in less gain and a lot more pain for people in red states with Republican controlled legislatures. You may not be able to control where you live, but you shouldn’t be punished for it!
Dr. Linda Bergthold has been a health care consultant and researcher for more than 25 years. She worked on the Clinton Health Reform plan and was the head of the Obama health care blog team in 2008. She also writes for The Huffington Post on health reform and insurance issues.