Avid game show watchers know what it’s like to yell “take the deal!” from the couch during “Deal or No Deal” with Howie Mandel when a contestant has pushed his luck as far as we think it will go.
Many Americans are having a similar experience now and want to implore their representatives to finally take the deal that House Republicans are currently engineering to repeal and replace the Affordable Care Act, or ObamaCare. The bottom line is that this bill would be a tremendous improvement from the current system. And in its latest form, the bill balances concerns about high costs and limited choice with protections for pre-existing conditions.
Two recent amendments to the American Health Care Act, the GOP’s repeal-and-replace bill, should make it easier for repealers and replacers to come together, as they will need to do to escape the status quo and to avoid another failure to pass a bill. A Kaiser poll from earlier this year showed that only 20 percent of people want the ObamaCare to be repealed with no replacement policy. Another 28 percent support repeal with replacement.
Repealers point out that many Americans — especially younger, healthier people — have seen premium increases and other insurance changes that limit their choices in coverage and care. Because of ObamaCare’s regulations and the rising prices that have come as a result, many of these people have now left the insurance market entirely. That’s set in motion the problems that we now know fundamentally threaten ObamaCare as insurers exit, reducing options for all consumers and pushing prices even higher.
The MacArthur Amendment in the new bill addresses this: States would be allowed to get waivers from rules that prevent insurance companies from pricing policies according to risk (a key facet of insurance), and from rules requiring all plans to cover the so-called “Essential Health Benefits” in ObamaCare.
States that are granted such waivers are likely to see steep reductions in average insurance prices, as well as increases in the number of insured people. Those states will also be required to operate high-risk pools as safety nets for customers with expensive conditions.
Replacers know that Democrats have succeeded in raising the issue of pre-existing health conditions (perhaps disproportionate to their real-life incidence and insurance effects), leaving Americans concerned about how people with expensive conditions will be affected by repeal. They want to know that this vulnerable group will still be protected.
The Palmer-Schweikert Amendment introduces a “Federal Invisible Risk-Sharing Program” that should really be called the Pre-Existing Condition Protection Plan. The Amendment would create a federal invisible risk pool similar to those that were successful in the states of Idaho and Maine before the Affordable Care Act.
In an invisible risk-sharing program, insurers use information from a questionnaire to determine who, upon application, qualifies as a high-risk customer, or someone with a qualifying pre-existing condition. When someone is designated for risk-sharing, the insurer sends the majority of his or her premium dollars into the program, and in exchange, the program pays for his or her claims beyond a certain dollar limit. The program also receives funding from the federal government, although states would likely play a key role in the near future. This is a better approach than blinding insurers to applicants’ health status, as ObamaCare does, because that has sadly resulted in insurers offering high premiums to all.
In addition to these major changes in these two amendments, the bill will still repeal most of the mandates and taxes in the ACA and change the structure of the tax credits available to those who buy insurance on their own. It will reform and modernize the Medicaid program, changing the funding from an open-ended federal match to a block grant or per-capita funding system based on enrollment.
The latest GOP bill is a good deal. And importantly, this bill is just one step in a three-step process for reversing ObamaCare’s ill effects: In step two, Health and Human Services Secretary Tom Price will take administrative action, and in step three, Republicans will consider further legislation to address issues that aren’t included in this bill.
Whatever deal the American people get in the end, it won’t be perfect. In “Deal or No Deal” terms, we won’t win the million-dollar prize of a perfectly free healthcare market with a perfect safety net for vulnerable populations. But we can work to get as close to that as possible. The American Health Care Act is a good start.