The incoming administration is determined to repeal and replace the Affordable Care Act (ACA). It is difficult to know yet, what is to replace it and how the new system will work. Some provisions from the ACA may be kept in place like keeping kids on a parent’s health plan until they are 26 years-old and not denying people health insurance if they have pre-existing conditions. But the question remains how is the Trump administration going to accomplish this?
Because there is no established system that keeps track of who signed up for insurance and who did not. The question is how to determine who did get insurance, who did not, who was possibly forced into buying it and who still does not have insurance.
Some pundits claim that the ACA gave coverage to 20 million Americans who had never had insurance before. Others say, that it was 14 million counting those who were insured but lost their insurance and had to buy new plans under the ACA. Many people feel cheated and overcharged with their health insurance plans under the ACA.
What is next? Some Americans hope that the Trump administration will repeal the and replace the current healthcare system with something that will lower insurance costs, lower premiums and open the market up with more insurance choices.
According to president-elect Donald Trump, Americans have suffered under the weight of a massive economic burden brought about by the Affordable Care Act (ACA).
Apparently the Affordable Care Act was passed into law without much foresight, resulting in out-of-control costs, non-functional websites, higher premiums, less competition in the insurance industry and a greater rationing of care. As a result of the legislation, every American was allegedly faced with uncertainty of the ACA collapsing, causing even greater economic concern and hardship when it came to health care.
President Donald Trump’s administration suggests that on day one of a new administration free market reforms would be introduced into the health care industry by completely repealing the ACA. Replacing the repealed legislation would be the next task and the administration indicates it would have such reforms ready that closely follow free market principles geared to restore certainty and economic freedom to all Americans. Free market principles combined with sound public policy are intended to broaden health care access, improve the quality of care and make it more affordable.
The proposed seven-point plan touted by president-elect Donald Trump to make health care more affordable for all Americans will allegedly:
- Lower health care costs for every American
- Remove uncertainty about health care
- Offer financial security for Americans
- Tackle other policy revisions to lower the cost of health care
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Enforce immigration laws to relieve economic pressures on Americans in health care
- Stop fraud and waste and energize the American economy
- Reduce the number of people accessing programs such as Children’s Health Insurance, Medicaid
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Work on growing the economy by bringing jobs and capital back to the United States
- Reform mental health services
It appears that the plan to reform health care in the United States is ambitious and may result in some significant changes for Americans. While it is not precisely clear how many of the proposed reforms are to be implemented and what may be designed to replace existing health care legislation, there are many industry pundits who feel that change may be a good thing to stimulate the economy.
The country is on the brink of a new era and it appears that approaching health care with a different point-of-view may produce some interesting results, not only for the people, but also for the insurance industry as a whole.
With a new administration promising to repeal the Affordable Care Act (ACA), 2017 may be a different year. However, with all large changes that may be coming, it is virtually guaranteed that repealing the ACA and replacing it with something else requires, in the words of House Speaker Paul Ryan, “a good transition period.” No matter how much Americans want change that change will need to accommodate the over 20 million people who did buy health insurance under the ACA.
A replacement plan has to be put into place before the ACA could be repealed. While there is a replacement plan on the table, it is not clear if that plan will be sufficient for American families and seniors to keep affordable health insurance that suits their needs. In the meantime, things remain unaffected, pending changes.
One portion of the ACA, referring to coverage for individuals with pre-existing conditions and young adults staying on their parents insurance until they turn 26 may be kept and/or tweaked as new plans are formulated.
Speaker Ryan was not clear on how long a transition period would last, but some reports indicate that it might take up to three years to accomplish the kind of massive shift in health care.
by: Clelland Green
There are three key pieces of the Affordable Care Act which will cause health insurance premiums to rise faster than they would otherwise.
- Guaranteed Issue – The mandate will ease this expense, but providing everyone coverage regardless of their health will cause premiums for people who are healthy and presently buy their own insurance to skyrocket. This impact will be felt in the individual and small group markets and not in the large group market.
- More Demand without An Increase in Supply – If you significantly increase demand for any service or product and you do not have a corresponding increase in supply, prices will rise. If 30 million more people obtain health insurance (current CBO estimate is between 30 and 33 million by 2016) that will cause an increase in health care demand of at least 5% and possibly more. Most of this increase will come from the expansion of Medicaid which will create supply shortages throughout the country and will be felt particularly hard in urban areas. The result of this expansion will be further cost shifting to private insurance as Medicaid reimbursement rates are significantly below market rates – even heavily discounted market rates. Bottom line, doctors and hospitals will charge private plans more and the premiums for those plans will rise.
- Minimum Coverage – Currently people buy high deductible plans and other health insurance products where the benefits are limited in such a way as to provide an affordable plan. Exchange based plans do not have those features. Aetna’s CEO Mark T. Bertolini gave the WSJ’s health blogan example of a 40 year old Texan currently buying a $5000 deductible policy is paying $189/month and the cheapest exchange plan will cost him more than $450/month. The $3000 premium difference more than offsets the higher out of pocket expenses of the cheaper plan, which are not $3000 more than the bronze plan.
While these provisions may be popular, they are going to have a significant impact on the lives of middle class Americans who desparately need reform that will help control the cost curve.
