Health-Care Forecast

When Obamacare Ends, Market Forces Will Return

After a decade in the health-insurance business, this is how I see Obamacare’s death spiral will unfold. Look forward to a repeal of the Affordable Care Act as soon as February. They propose to keep a few provisions like guaranteeing sick people coverage and being able to stay on your parent’s plan until you are 26, but the mandate would go away — you won’t be required to buy health insurance, and there will be no penalty. Rather than be subsidized, you’ll now be given tax deduction, which we all know isn’t a dollar-per-dollar trade off. You’ll now have to pay the entire premium and wait for 2018 to file your taxes.

They plan to return to market forces. There will no longer be a one-size-fits-all–type policies. It will be somewhat like the pre-Obamacare market where you’ll be able to buy slimmed down policies with high deductibles and limited coverage.

They will tout HSAs (health saving accounts), which are a good thing for young people who make a lot of money, but not much for others. In addition to the premium, which will only be slightly lower than a comprehensive plan’s, you’ll have to put another $300 if single and $550 for a family of four each month into an account. This is not only a more expensive way to go but also leaves your neck out the first year, because you will take on a $5,000 deducible per person. Accident plans and critical illness plans will be necessary to offset this; still another added expense. Many HSAs will go unfunded, just as before.

If you are sick and keep your existing policy current, you can keep it. This will be the way and the only way they deal with people who have pre-existing conditions. You can’t have a blanket acceptance of sick people and not mandate that everyone sign up for insurance. Insurance companies won’t go for that. They are not in the business of losing money. So now, if you lose your policy or if you are now going to shop the new policies for sale, you will face underwriting. Yes, underwriting will return: Those who smoke will now pay more, those with pre-existing conditions will be rated up or put in high risk pools set up by the states, just like before, and pay very high rates. Good news though , they plan to do away with waiting lists, so no one will be denied coverage in the high risk pools.

Other things will change: Companies will be allowed to sell across state lines, but this will make it harder to have preferred provider networks with negotiated rates. They say it will create competition and lower rates; only time will tell on this one.

The young will no longer pay more so the older can pay less. People 50-years-plus may find it difficult to be approved for regular rates or be relegated to a high-risk pool, just like before. Many in their sixties will find it unaffordable and may have to wait until they are 65 and eligible for Medicare.

Medicaid or Medi-Cal will return to 100 percent of the federal poverty level instead of 138 percent, which is what it is now. The people in this low-income category will most likely find the market policies for sale unaffordable and go without coverage. Deporting persons here illegally will play into it since they claim it costs the taxpayer $11 billion per year and would like to do away with this expense.

All the details are not out yet, but this is very well what if could look like. We’ll have to wait and see.

Alan Dunn, Goleta

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