TrumpCare - Republican Study Committee releases the best health care proposal I have ever read - C.Steven Tucker

Authored by CSteven Tucker

On October 22, 2019, the Republican Study Committee released the best health care proposal I have ever read. You can read it here. Below are the reasons why these common sense reforms will dramatically reduce health insurance premiums, increase consumer choice and protect our most vulnerable and those with preexisting conditions.

1.) Health insurance carriers would not be able to rescind, increase rates, or refuse to renew one’s health insurance simply because a person developed a new medical condition after enrollment.

2.) Individuals with high risk medical conditions would have affordable access to state-run Guaranteed Coverage Pools under which their health care costs would be subsidized with federal grants and further contained by any state-enacted premium-setting restrictions. This is is the way these risks were mitigated in 45 states before Obamacare.

3.) You can elect COBRA and then move to an individual plan with guarantee issue rights without having to exhaust COBRA first. The ACA currently prohibits those who have elected COBRA from moving to a lower priced Individual plan until the annual ACA open enrollment period begins in which case their coverage cannot begin until January 1st.

4.) Everyone seeking coverage in the individual marketplace would have guaranteed issue protections and could not be refused a plan based on the enrollee’s health status, medical condition, claims experience, receipt of health care, medical history, genetic information, evidence of insurability, or disability.

However, proof of prior coverage consistent coverage would once again be required which will prohibit gaming the system by remaining uninsured for long periods of time and then simply purchasing health insurance when you are then sick. This simple restoration of a common sense provision enacted under 1996 HIPPA law will reduce premiums for everyone. If a person does not have twelve months of continuous coverage, the person could be subject to an exclusion period of up to twelve months for an existing condition. Prior periods of continuous coverage would reduce any exclusion period month-for-month. Additionally, as was the case under HIPAA, states would be able to satisfy the RSC plan’s portability protections through the implementation of a Guaranteed Coverage Pool providing these same portability protections. Again, 45 states had either a High Risk health insurance pool or a Guaranteed Issue Individual mandate provision enacted for many years before Obamacare.

5.) States can satisfy the RSC plan’s individual marketplace portability protections through the implementation of a Guaranteed Coverage Pool that provides such protections. Accordingly, the coverage pool would have to:

1) Provide immediate access to a plan and prohibit condition exclusions for individuals who have maintained twelve months of continuous coverage.
2) Cap any condition exclusion period at twelve months.
3) Reduce any exclusions month-for-month for individuals with less than twelve months continuous coverage. Consequently, everyone with an existing condition who is seeking coverage in the individual market would be provided a pathway to obtaining complete coverage of all their conditions within just twelve months.

States would also be free under the RSC plan to enact shorter exclusion periods. Prior to the ACA, the vast majority of states with high-risk pools capped their exclusion period at six months or shorter.

6.) To ensure that ample options exist for Americans to possess continuous coverage, short-term health plans would also count toward periods of continuous coverage under the RSC plan. Additionally, the RSC plan would codify the Department of Health and Human Services’ new rule allowing short-term, limited-duration plans to last for a term of one year (and renewable for up to 36 months).

7.) 1332 waivers – seven states, including Alaska, Maine, Maryland, Minnesota, New Jersey, Oregon and Wisconsin, were awarded waivers under Section 1332 of the ACA to deviate from certain ACA mandates and redirect ACA subsidies toward uniquely designed reinsurance programs. Alaska applied for and was (finally) granted a 1332 waiver from CMS on July 11, 2017 thanks to President Trump. That waiver allowed Alaska to separate the most expensive consumers from the rest of that state’s risk pool and as a result health insurance premiums dropped from an expected increase of 40% to an actual increase of only 7%. The same risk mitigation strategies are now being adopted by other states like Hawaii, Maine, Maryland, Minnesota, and Oregon.

Wisconsin applied for and received an ACA waiver allowing them to create a state based reinsurance program sponsored in part by the Federal government. The “Wisconsin Health Care Stability Plan” will pay 50% of insurers’ claims between $50,000 and $250,000. The state projects it will spend $34 million of its own funds for these claims next year, with the rest coming from the federal government. The feds, however, aren’t expected to shell out any new money because reinsurance also helps the federal government. The lower rates mean it will spend less on premium subsidies for those who qualify. Those savings will be redirected to the stability plan.

An additional five states (Colorado, Delaware, Montana, North Dakota, Rhode Island) project premium reductions of up to 16 percent in 2020 due to 1332 waivers.”

8.) The cost to implement these state based risk mitigation systems is $17 billion annually. That may not seem ideal but it sets up a sustainable path for the individual marketplace and deters our nation from heading toward a government-run, one-size-fits-all health care system that would cost taxpayers more than $30 trillion over the next decade.

9.) You can FINALLY use your H.S.A. dollars to pay for health insurance premiums which will equalize the tax favored status between individual and employer sponsored plans. By allowing individuals to use health savings accounts funds to pay for their health care premiums, the RSC plan allows individuals to take advantage of the triple-tax advantaged status of health savings accounts. First, funds that are deposited in a health savings account are not subject to income tax or payroll taxes (including individual and employer payroll taxes) when they are earned. Once in the account, funds are not subject to taxation for any interest accrued. Nor are funds taxed when they are removed from the health savings account and spent on qualifying medical costs. An individual who utilized their health savings account in this way would no longer be penalized for choosing to shop for a plan on the individual market. Under current law, for 2019, $3,500 may be contributed to health savings accounts for an individual, and $7,000 for families.146 In 2018, the House of Representatives passed legislation to increase the contribution caps to $6,650 for an individual and $13,300 for a family.

This limits are currently way too low. According to the Kaiser Family Foundation, the average annual family premium per enrolled employee for employer-based health insurance in 2017 was $18,687.148 Because of this, under the RSC plan, contribution limits would be increased even more to $9,000 per individual and $18,000 for families. The RSC plan would also allow working seniors, or anyone on Medicare, to have a health savings accounts and continue to contribute to it. Individuals enrolled in other public health insurance programs, such as those with Tricare, Indian Health Service, or Veterans benefits, would also be able to contribute to a health savings accounts. Furthermore, FSA and HRA balances could be converted into a health savings account,

10.) The FMAP rate for the expansion population would eventually match normal FMAP rates. There is no reason why an able-bodied adult without any dependents should be more heavily subsidized than a poor pregnant woman, elderly person, child, disabled individual, or parent.

11.) Association Health Plans. The RSC plan urges codification of the reforms promulgated by the Department of Labor that ensure Americans have greater access to Association Health Plans (AHP). Association Health Plans currently work by allowing small businesses to band together by geography or industry to obtain health care coverage as if they were a single large employer. Importantly, AHPs offer benefits comparable to employer-sponsored plans and cannot discriminate against patients with pre-existing conditions. They also “strengthen negotiating power with providers from larger risk pools and [provide] greater economies of scale,” according to the Department of Labor.

12.) Unfortunately, many states have passed laws impeding the provision of telemedicine by banning or heavily restricting its progress. Notably, the position of the American Medical Association still calls for doctors to be physically present when rendering medical services. This will end and you’ll be able to log on and consult with your doctor without driving all the way to the doctor’s office and waiting for God knows how long in a waiting room.

Major Kudos to the Republican Study Committee. I could not have written a better plan!

Health Insurance Mentor's C.Steven Tucker talks open enrollment 2019 and the future of healthcare

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