America's Real Health Care Debate: How to Stop Insurers from Robbing Us Blind
Previously, I argued that Democrats must reclaim and reframe Congress' healthcare debate to make Dems the party protecting freedom.
In brief, freedom is coverage, we need to move beyond Congressional Budget Office scores and frame other critical components of the Affordable Care Act.
Remember, freedom is coverage. Now, repeat after me…
Maximum out-of-pocket caps.
No more lifetime caps.
Because you don’t choose to get sick, you just do.
Why It's Important
Because your maximum “out of pocket” caps are the key to good insurance.
Because Republicans juggle the numbers and avoid discussing the bottom line. Insurance is not just monthly premiums or deductibles, it is the total level of exposure in each plan.
What does the Swampcare team Say?
It’s always about choice.
Senator Ted Cruz, on Sunday’s "This Week with George Stephanopoulos" promoted his Consumer Freedom Option, saying, “If you want to buy a plan with all the bells and whistles, with all of the mandates under Title One, you can buy that plan. Those plans will be on the market, those plans will have significant taxpayer money behind them. But on the other hand, if you can’t afford a full Cadillac plan, you should be able to buy another plan that meets your needs. So, the Consumer Freedom Option gives you the consumer choice, whether to go with the full Cadillac or a skinnier plan that is a lot more affordable” and later “If we lower premiums, that’s a win/win for everybody.”
Lots of choices, lower premiums, backed up with some significant taxpayer dollar.
What’s not to like?
What Happens In Real Life?
In real life, no one wants to believe tragedy will strike them.
Life is hard enough without walking around thinking today is the day you’re getting hit by a truck or diagnosed with MS. One of the big protections introduced by the ACA was the elimination of lifetime caps on coverage under the 10 Essential Benefits.
It is an option people would gamble away. And as one would imagine, it is also coverage many insurers would eliminate in the new “skinnier” plans.
What Republicans don’t discuss much is what happens when someone goes “skinny” and bets wrong. It goes without saying the patient will probably go bankrupt and maybe even die. U.S. hospitals nationwide already carry mountains of patient debt, and the re-introduction of lifetime caps will force them to provide health care for more people who can’t pay.
As Amanda Marcotte of Salon recently pointed out, lifetime caps were eliminated under the ACA for the 10 Essential Benefits only. So, if gone, even consumers in employer plans may find themselves facing more limited coverage and more bankruptcies. And Marcotte notes employers can choose whatever state they do business in to create their plan. Where does your company have offices?
When it comes to insurance, no lifetime caps matter.
In real life, everyone faces mundane, commonplace but expensive procedures like knee surgery.
And again, the ACA provides annual maximum out-of-pocket caps, which rise every year for inflation, for individuals and families. This year, the maximum out-of-pocket cap for an individual is $7,150 and the maximum out-of-pocket cap for a family of four is $14,300. Sure, that's a lot of money, but again, it's a cap that can prevent bankruptcy or financial ruin.
We all like some choice, and ACA coverage includes Bronze, Silver, Gold and Platinum plans, ranging from 60% to 90% of costs covered. In all the plans, these annual maximum out-of-pocket caps act as a critical backstop. You bet a little, but not the house—literally. And the insurance company pays 100% after you hit those out-of-pocket caps.
When it comes to insurance, annual out of pocket caps matter.
In real life, Americans allocate a higher percentage of GDP to healthcare than any industrial nation.
One of the more humane principles created in the ACA is the sliding “cap” on percentage of personal income going to healthcare. For individuals and families making 100% to 400% of the federal poverty level, the cap ranges from 2% of income for someone making very little money to 9.5% of income for those at the top of the range. If your monthly premium was above the income cap, the government covered the gap.
Known as the premium tax credit, this “income cap” principal guides the calculation of the subsidy people receive each year to supplement their costs. In 2017, the subsidies range was $11,880 to $47,520 for an individual and for a family of four it was $24,300 to $97,200.
Think about it again. The ACA basically says, for any family of four living on less than $90,000 a year, you shouldn’t spend more than 10% of your income on health care. And we will offer assistance to keep it below that cap.
Pretty damn good.
When it comes to insurance, annual percentage of income caps matters.
In real life, old people get a lot sicker than young people and everyone gets old.
Social Security, Medicare and the nursing home elements of Medicaid ease the journey. And the ACA added a “cap” on the maximum spread of premium costs based on age at 3 to 1. The current Senate and House plans shift the ratio to 5 to 1, but who knows what would happen in new state-created plans without restrictions. The CBO reports this one change will make health care unaffordable for millions of elderly Americans.
Just one more cap in a long list of ACA caps (they call them rules and regulations) that stabilize people’s lives economically.
When it comes to insurance, a 3-to-1 age cap matters.
What Should Dems Say?
Talk more about the ACA effect on the middle class.
Media coverage has rightfully been focused on the devastating effects the Senate and House plans will have on the poor, elderly and disabled. But the ACA helps middle-class individuals living on $40,000 a year and a family of four living on less than $90,000 a year too.
Democrats need to give specific examples of families and individuals with middle-class incomes and drive home how the removal of coverage and caps will affect them.
The ACA protects everyone, even people in employer plans.
The 10 Essential Benefits cover all health care plans nationwide and insure every employer plan and every state exchange plan cover essential benefits including substance abuse, mental health and maternity. The ACA elimination of lifetime caps applies to every plan nationwide. Ditto the maximum out-of-pocket costs for individuals and families.
Democrats need to hammer home the potential effects of Swampcare on employer plans, too.
Who covers the costs when someone goes “skinny” and has a very bad health day?
In their brave new world of infinite plan options, what happens when someone bets wrong?
When someone picks a cheaper plan with a reinstated lifetime cap, and has a Steve Scalise moment, we can assume bankruptcy at a minimum and millions in unpaid bills. From 2010 to 2016, personal bankruptcies have been cut in half. This trend would reverse. Will states pick up the slack? Will more people slide into poverty and end up in Medicaid? Will hospitals take on even more debt?
Democrats need to engage Republicans and their pundits with specific examples, walking through the step-by-step reality of a skinny plan. Instead of allowing Tom Price to bloviate, get specific and talk about one person and one scenario at a time. Joe Blow takes a skinny plan with a lifetime cap, has an accident and is disabled for life. What happens? Joan Blow takes a plan without adequate mental health coverage and her kid tries to commit suicide. What does she do?
Under the ACA the insurance company paid—now who does? And why is that better?
The Bottom Line
The Republican solution—free markets and choice—is a return to the bad old days. When you scratch below the surface, it doesn’t add up. Insurance works best with a large pool (mandate), core coverage (10 Essential Benefits) and a limit on maximum out-of-pocket costs (caps).
Caps matter. A lot.