President Trump Thread...

Cowboysrock55

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Just one example of a solution

____________________________________


How To Cover Everyone With Pre-Existing Conditions Without The System Collapsing



The Apothecary
Insights into health care and entitlement reform.

Opinions expressed by Forbes Contributors are their own.
Robert BookRobert Book, Contributor
My Apothecary colleague Avik Roy claims that “Donald Trump Is Right: You Can Repeal Obamacare And Still Cover Everyone With Pre-Existing Conditions.”

He’s absolutely right – and here’s how to do it.

The main problem – and indeed, this is what one of the primary causes of skyrocketing premiums and ACA Exchanges collapses – is that sicker patients pay the same premiums as everybody else, but cost more for insurers to cover. This makes ACA coverage a great deal for people with expensive pre-existing conditions, but a lousy deal for healthy people, who can pay the penalty (or use one of the many loopholes), pocket the savings, and enroll when (if) they ever get sick. The result is higher average costs to cover those who sign up, and therefore higher premiums, and therefore fewer people signing up. (It’s called an “adverse selection death spiral.”)

The ACA provides subsidies – but only based on income, not on health status. It seems that authors of the ACA believed that the only reason someone might be uninsured is that their income was too low compared to the insurance premium. But there’s another reason someone might be uninsured – maybe the premium was too high compared to the expected need for insurance (i.e., the person might have a long history of excellent health), making gold-plated comprehensive coverage look like a waste of money. Or, perhaps the premiums were too high because someone had a middle-class or higher income, but pre-existing conditions made the insurance unafforable even at a high income.

The ACA subsidizes coverage for people in lower-income brackets, mandates identical premiums regardless of health staus, and assumes that the rest will take care of itself. Clearly, that isn’t happening.

Here’s the solution: restructrure the subsidies so that they apply to health status, not (just) income. In other words, pay a subsidy to an insurance company when they enroll a person with pre-existing conditions (or equivalently, an above-average percentage of such people), to offset the additional cost, and keep premiums low for everyone else.

This is called risk-adjustment, and it’s been used quite successfully in the Medicare Advantage program. Here’s how it works: The diagnosis codes in each patient’s health history, along with other factors such as age, are used to calculate a “risk score,” reflecting how much, on average, their care will cost compared to an “average” patient. Risk scores are calibrated so that an average patient has a risk score of 1.0, with higher scores indicating higher-cost (less healthy) patients, and lower scores indicating lower-cost (more healthy) patients.

Insurance companies will then be able to set premiums based on the average patient in the population, not the average patient in the sicker-than-average adverse-selection-biased risk pool. Instead of receiving a subsidy based on how many poor people sign up – a figure that doesn’t signifantly affect their costs – they’ll receive a subsidy based on how high their average customer’s risk score is.

The subsidies can be keyed to a “standard” health plan, so that patients who select a higher-benefit plan will still pay the difference, and those willing to accept a lower-benefit plan will still pay less. However, a plan that ends up attracting mainly healthy patients won’t get much (if any) subsidies, and a plan that ends up attracting mainly sick patients won’t automatically be forced out of the market by heavy losses.

One can expect that under this approach, premiums and deductibles will be substantially reduced. That will attract more health people into the market, making the required subsidies payment less than one would think looking at today’s enrollment pool. If additional subsidies are needed for the poorest individuals, that can be added without distruption the risk-adjustment subsidies.

More to the point, an individual mandate and the associated penalty would not be required. If an additional incentive is desired, the risk-adjustment subsidy could be made only for those who enroll in the first year of the program, and/or maintain continuous coverage.

Some will argue that healthy people shouldn’t be taxed to subsidize coverage for sick people. Others would argue that this is precisely the sort of situation in which redistribution is appropriate, since people generally don’t get sick on purpose. Either way, this is in some sense beside the point, since both sides in Washington seem to be in agreement that pre-existing conditions should not be a bar to coverage. The House Republicans made that clear in the GOP health plan released last June, and President-elect Trump said the same during his campaign. This is merely a way to accomplish that goal without markets collapsing and without coercive devices like the individual mandate.
 

Jiggyfly

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Just one example of a solution

____________________________________


How To Cover Everyone With Pre-Existing Conditions Without The System Collapsing



The Apothecary
Insights into health care and entitlement reform.

Opinions expressed by Forbes Contributors are their own.
Robert BookRobert Book, Contributor
My Apothecary colleague Avik Roy claims that “Donald Trump Is Right: You Can Repeal Obamacare And Still Cover Everyone With Pre-Existing Conditions.”

He’s absolutely right – and here’s how to do it.

The main problem – and indeed, this is what one of the primary causes of skyrocketing premiums and ACA Exchanges collapses – is that sicker patients pay the same premiums as everybody else, but cost more for insurers to cover. This makes ACA coverage a great deal for people with expensive pre-existing conditions, but a lousy deal for healthy people, who can pay the penalty (or use one of the many loopholes), pocket the savings, and enroll when (if) they ever get sick. The result is higher average costs to cover those who sign up, and therefore higher premiums, and therefore fewer people signing up. (It’s called an “adverse selection death spiral.”)

The ACA provides subsidies – but only based on income, not on health status. It seems that authors of the ACA believed that the only reason someone might be uninsured is that their income was too low compared to the insurance premium. But there’s another reason someone might be uninsured – maybe the premium was too high compared to the expected need for insurance (i.e., the person might have a long history of excellent health), making gold-plated comprehensive coverage look like a waste of money. Or, perhaps the premiums were too high because someone had a middle-class or higher income, but pre-existing conditions made the insurance unafforable even at a high income.

The ACA subsidizes coverage for people in lower-income brackets, mandates identical premiums regardless of health staus, and assumes that the rest will take care of itself. Clearly, that isn’t happening.

Here’s the solution: restructrure the subsidies so that they apply to health status, not (just) income. In other words, pay a subsidy to an insurance company when they enroll a person with pre-existing conditions (or equivalently, an above-average percentage of such people), to offset the additional cost, and keep premiums low for everyone else.

This is called risk-adjustment, and it’s been used quite successfully in the Medicare Advantage program. Here’s how it works: The diagnosis codes in each patient’s health history, along with other factors such as age, are used to calculate a “risk score,” reflecting how much, on average, their care will cost compared to an “average” patient. Risk scores are calibrated so that an average patient has a risk score of 1.0, with higher scores indicating higher-cost (less healthy) patients, and lower scores indicating lower-cost (more healthy) patients.

Insurance companies will then be able to set premiums based on the average patient in the population, not the average patient in the sicker-than-average adverse-selection-biased risk pool. Instead of receiving a subsidy based on how many poor people sign up – a figure that doesn’t signifantly affect their costs – they’ll receive a subsidy based on how high their average customer’s risk score is.

The subsidies can be keyed to a “standard” health plan, so that patients who select a higher-benefit plan will still pay the difference, and those willing to accept a lower-benefit plan will still pay less. However, a plan that ends up attracting mainly healthy patients won’t get much (if any) subsidies, and a plan that ends up attracting mainly sick patients won’t automatically be forced out of the market by heavy losses.

One can expect that under this approach, premiums and deductibles will be substantially reduced. That will attract more health people into the market, making the required subsidies payment less than one would think looking at today’s enrollment pool. If additional subsidies are needed for the poorest individuals, that can be added without distruption the risk-adjustment subsidies.

More to the point, an individual mandate and the associated penalty would not be required. If an additional incentive is desired, the risk-adjustment subsidy could be made only for those who enroll in the first year of the program, and/or maintain continuous coverage.

Some will argue that healthy people shouldn’t be taxed to subsidize coverage for sick people. Others would argue that this is precisely the sort of situation in which redistribution is appropriate, since people generally don’t get sick on purpose. Either way, this is in some sense beside the point, since both sides in Washington seem to be in agreement that pre-existing conditions should not be a bar to coverage. The House Republicans made that clear in the GOP health plan released last June, and President-elect Trump said the same during his campaign. This is merely a way to accomplish that goal without markets collapsing and without coercive devices like the individual mandate.
That actually makes some sense but its to bad Republicans want to get rid of all subsidies as well.

Which makes that all moot.
 

Cowboysrock55

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Really?

I'm all ears, maybe I missed something.
I posted an article. I realize that the Democratic Party has been pushing the idea that the only way for healthcare to work is to transition to a socialist type system but it's simply not true. And there are other possibilities then the article I posted but the truth is it's not one step solution ever. Just like the mandate didn't fix anything. What I'd really love to see is a solution to the actual cost of health care. Because so far no party has made any real effort to control those sky rocketing costs.
 

Jiggyfly

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You missed the part where it was voted on and passed the house and senate. That is a first. Trumps desk is a formality.
Yeah I missed that and you missed the part where what was actually passed was a reconciliation vote and that is a long way from actually repealing Obamacare.

But actual details have never been an issue for you.
 

Jiggyfly

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I posted an article. I realize that the Democratic Party has been pushing the idea that the only way for healthcare to work is to transition to a socialist type system but it's simply not true. And there are other possibilities then the article I posted but the truth is it's not one step solution ever. Just like the mandate didn't fix anything. What I'd really love to see is a solution to the actual cost of health care. Because so far no party has made any real effort to control those sky rocketing costs.
I responded to that article and can see the benefits of it but with congress hell bent on stopping subsides the point of the article is moot.

I don't know why Republicans are so hell bent on the word Repeal especially when they already concede there is going to have to be something in its place.

Republicans and Democrats need to come together to stare down big medicine and attack the real issues of rising health care.

And I am no great fan of single payer or a socialized system.
 

Cowboysrock55

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Republicans and Democrats need to come together to stare down big medicine and attack the real issues of rising health care.
And this is the real problem. Medical costs in America are ridiculously high. We have some of the highest medical costs of any country in the world. And part of the problem is that insurance companies just write those checks with little ability to drive down those costs. And of course our government is in the back pocket of many of the medical companies that are the main culprits.
 

L.T. Fan

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Yeah I missed that and you missed the part where what was actually passed was a reconciliation vote and that is a long way from actually repealing Obamacare.

But actual details have never been an issue for you.
http://www.reuters.com/article/us-usa-obamacare-idUSKBN14X1SK

You also might want to read the part where it doesn't require the Presidents signature. This effectively seals the deal and the instructions to the committee is as a result of approving the dismantling the Affordable Healthcare Care law on the books now. I realize this isn't the new bill but it is the approval steps to draw up a new plan.
 

Cotton

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And this is the real problem. Medical costs in America are ridiculously high. We have some of the highest medical costs of any country in the world. And part of the problem is that insurance companies just write those checks with little ability to drive down those costs. And of course our government is in the back pocket of many of the medical companies that are the main culprits.
You can blame insurance companies and lawyers for high healthcare costs. Or at least a lot of it. Frivolous medical lawsuits are a big reasons doctors costs are so high. It's not all of it but it's a lot of it.
 

Cowboysrock55

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You can blame insurance companies and lawyers for high healthcare costs. Or at least a lot of it. Frivolous medical lawsuits are a big reasons doctors costs are so high. It's not all of it but it's a lot of it.
Yeah you can throw lawyers under the bus, I don't work in that area.
 

L.T. Fan

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You can blame insurance companies and lawyers for high healthcare costs. Or at least a lot of it. Frivolous medical lawsuits are a big reasons doctors costs are so high. It's not all of it but it's a lot of it.
There are many things that can be done to lower premium cost not the least of which is the expansion of group coverage rates to those who currently do not qualify because they do not work for companies that provide group rates. Quasi group systems could be created thereby allowing someone to join an affiliate group which entitled them a group cost policy.

Example would be say members of the DCC would constitute eligibility of a quasi affiliation of Group Rates of America and as long as individuals maintained the eligibility requirements they would be eligible for group insurance rates. I can guarantee that if systems were created for people to get group policy rates they would flock to the opportunity. Of course it would be a little more complicated than this example but you get the picture. That's just one thing that could be done.
 

data

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Healthcare costs are high for who? People with manual-labor, low-skill, minimum-wage jobs? The unemployed? Retired senior citizens? Or are we referring to white-collar workers as well?

Is anyone here paying high healthcare costs?
 

townsend

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Healthcare costs are high for who? People with manual-labor, low-skill, minimum-wage jobs? The unemployed? Retired senior citizens? Or are we referring to white-collar workers as well?

Is anyone here paying high healthcare costs?
My Dad had to go 50-60k in debt on top of his insurance when he had surgery this year.
 

Kbrown

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Healthcare costs are high for who? People with manual-labor, low-skill, minimum-wage jobs? The unemployed? Retired senior citizens? Or are we referring to white-collar workers as well?

Is anyone here paying high healthcare costs?
I avoid paying high healthcare costs by never going to the doctor and praying I don't die.
 

Cowboysrock55

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Healthcare costs are high for who? People with manual-labor, low-skill, minimum-wage jobs? The unemployed? Retired senior citizens? Or are we referring to white-collar workers as well?

Is anyone here paying high healthcare costs?
Yeah, pretty much everyone who doesn't have an employer who pays for it. The worst is you can pay a fortune per month and still have thousands in deductable before it does shit.

The people you mention don't pay much, it's the people who make more then that who can't really afford the shitty plan. Great way to take a middle class wage and make it not middle class anymore.
 

Cotton

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There are many things that can be done to lower premium cost not the least of which is the expansion of group coverage rates to those who currently do not qualify because they do not work for companies that provide group rates. Quasi group systems could be created thereby allowing someone to join an affiliate group which entitled them a group cost policy.

Example would be say members of the DCC would constitute eligibility of a quasi affiliation of Group Rates of America and as long as individuals maintained the eligibility requirements they would be eligible for group insurance rates. I can guarantee that if systems were created for people to get group policy rates they would flock to the opportunity. Of course it would be a little more complicated than this example but you get the picture. That's just one thing that could be done.
It's not simply about insurance companies. They are only one part of the equation. Lawyers and doctors are just as culpable. Lawyers on the lawsuit crap and doctors on the pharmaceutical side.
 

Cotton

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Healthcare costs are high for who? People with manual-labor, low-skill, minimum-wage jobs? The unemployed? Retired senior citizens? Or are we referring to white-collar workers as well?

Is anyone here paying high healthcare costs?
I can tell you this with confidence, I have over 30+ people in my direct employ that lost their company-sponsored insurance directly because of Obamacare. We simply couldn't afford to provide it under that plan. I lost half of them to the oilfield. Where they quickly realized they couldn't afford to pay their own under their new pay rate. About half of that half came back as part-time employees (because we didn't have to provide them benefits) and got a second job.

It's a terrible system. It was terrible when it was in inception, it never should have passed, and it has got to go away.
 

townsend

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It's not simply about insurance companies. They are only one part of the equation. Lawyers and doctors are just as culpable. Lawyers on the lawsuit crap and doctors on the pharmaceutical side.
It's not the doctors. It's not like drugs a formulated to be more expensive here as opposed to Canada. We just have an insane labyrinth of regulators, monopolies, and administration.
 

L.T. Fan

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It's not simply about insurance companies. They are only one part of the equation. Lawyers and doctors are just as culpable. Lawyers on the lawsuit crap and doctors on the pharmaceutical side.
True. I just commented on one thing that could help lower cost to the consumer right away. The insurance companies pursue groups because it is the most steady income source they have for premiums and the are highly competitive with their bids.
 
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