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America’s Real Health Care Debate: How To Stop Insurers From Robbing Us Blind

Reprinted with permission from AlterNet.

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…

Caps matter

With passion!

Caps matter

Maximum out-of-pocket caps.

Caps matter

No more lifetime caps.

Caps matter

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.

Insurers Ponder 2015 Prices As Obamacare Enrollment Deadline Looms

By Chad Terhune, Los Angeles Times

LOS ANGELES — After months of head counts for Obamacare, it is the medical bills that will start to matter now.

Even before enrollment closes Monday, California has far exceeded its initial goals for signing up people under the Affordable Care Act. Although the sheer volume of 1.1 million policyholders is impressive for a brand new government program, the number of sicker patients is what’s likely to draw the most attention.

How sick they are and the size of their medical bills will be front and center in the weeks to come as insurers begin drawing up next year’s insurance rates, which will become public this summer.

The outcome — hefty rate hikes or more modest increases — in the pivotal state of California could help shape political races nationwide and the future of enrollment for President Barack Obama’s signature law.

WellPoint Inc., parent of California’s leading health insurer in the exchange, Anthem Blue Cross, has already predicted “double-digit-plus” rate increases on Obamacare policies across much of the country.

Other experts discount the notion of soaring premiums because the Obama administration has programs in place to help health plans offset losses from higher-cost customers.

Meanwhile, most everyone involved is waiting to see how many additional people rush in by Monday, the last day to begin enrolling in Obamacare.

But health insurers aren’t wasting any time sizing up what patients are costing them now and what that will mean for 2015 rates.

Hunkered down in conference rooms, insurance actuaries are parsing prescriptions, doctor visits and hospital stays for clues about how expensive these new patients may be. By May, insurance companies must file next year’s rates with California’s state-run exchange so negotiations can begin.

“If rates in California increase by 20 percent,” said Robert Laszewski, a healthcare consultant in Virginia, “enrollment will go down and any healthy people will bail.”

Those concerns are one reason the Covered California exchange, insurers and health-law supporters are trying so hard to persuade young and healthy people to enroll before Monday’s deadline. The goal is to improve the chances of getting a balanced mix of policyholders and keep monthly premiums down.

No matter the final outcome, Covered California officials are confident they have done enough to avert upheaval in the market.

“I think we’re in a position to be optimistic that if rates go up at all, it will be in the single digits,” said Peter Lee, executive director of Covered California.

Harriet Davidson, 60, was one of the first people in line for Obamacare after being shut out of the market for years.

The self-employed consultant in Contra Costa County was rejected twice for individual health insurance because of her diabetes and a thyroid condition. The healthcare law removed that obstacle by guaranteeing access to coverage regardless of preexisting conditions.

That meant Davidson could buy a Silver plan from Blue Shield of California that costs her $92 a month — thanks to a federal subsidy.

“I probably neglected my health the last few years because of the expense,” Davidson said. “Now I’m going to have every test known to man.”

She plans to undergo lab tests for her diabetes, a mammogram, a bone density scan and a colonoscopy — everything she put off while she went without comprehensive insurance.

Davidson’s medical bills are the kind of expenses that could end up being scrutinized in a conference room on the 18th floor of Blue Shield’s headquarters in San Francisco. The company’s chief actuary, Amy Yao, and a small team of co-workers meet every other day to pore over the latest data and trends. “It’s kind of the sausage-making factory,” she said.

Yao said claims information is usually a better guide to future costs than a customer’s age, sex and other demographic data. But there’s a risk to putting too much weight on such a short time period, and there’s no guarantee Blue Shield will hang on to these same customers when they get a chance to renew their policies early next year.

“It’s really dangerous to draw conclusions from a small sample because you could be off materially,” Yao said. “Pricing is really challenging this year.”

Jacinta Camacho Kaplan, 63, is another person who immediately put her new health plan to use. The retired writer in Santa Monica has visited the hospital twice since she enrolled and needs follow-up care for a brain tumor that was treated in 2007. Kaplan pays about $600 a month for a high-end Platinum plan from Anthem Blue Cross.

“I’m a big user because I have these problems,” she said. “It’s a godsend to have this insurance.”

Covered California enrollment has made steady progress among young people, but officials acknowledged it was still falling short of their ultimate goals.

The turnout among young Californians ages 18 to 34 reached 27 percent of total enrollment through March 1, the latest data available. About one-third of the people eligible for subsidies are in that age group.

Many health policy experts say the prevalence of older, sicker customers in the exchange shouldn’t surprise health insurers.

They also note two major unknowns that could alter the equation: It was always anticipated that younger people would procrastinate until the Monday deadline, and the risk pool for rate-setting purposes also includes tens of thousands of people who are buying new policies outside the state exchange. Details about the size and makeup of that market aren’t known yet.

“I think all of the health plans expected the first 500,000 people would be older and sicker,” said Marian Mulkey, director of the health reform and public programs initiative at the California HealthCare Foundation. “I don’t expect a dramatic shift in the rates.”

Covered California’s overall enrollment as of Thursday had already surpassed the most optimistic estimates by 33 percent. By another measure, the state has reached nearly half the two million Californians who are eligible for premium subsidies.

To receive that government assistance, consumers must purchase their policy through the exchange. Otherwise, they can choose to bypass the state marketplace and buy the same health plans directly from insurers.

California’s exchange has benefited from widespread political support for the Affordable Care Act, a largely functioning web site and a broad network of clinics, nonprofit groups and labor unions aggressively promoting enrollment. It started slow in October, with only 30,000 people picking out a health plan in the entire month. Last week, more than 80,000 people enrolled over a four-day period.

In recent weeks, the state revamped its advertising and put the spotlight on younger enrollees. Orange County construction worker Luis Lupercio, 38, and his two sons star in a Spanish-language TV commercial aimed at attracting Latinos.

He said he couldn’t afford health insurance previously for his family of four, particularly as work dried up after the recession. But cost was no longer an issue with a federal subsidy. He said he got a Health Net policy through the exchange for just $1 a month.

“I rarely get sick,” Lupercio said. “Getting coverage for my kids was more important.”

Most health insurers remain bullish about their prospects under the healthcare law and have been pleased with California’s better-than-expected performance overall.

“But a lot of healthy people sat out year one, so you need another big influx” when enrollment opens again in November, said Charles Bacchi, executive vice president at the California Association of Health Plans, an industry trade group.

Santa Monica resident Julia Reed Nichols, 27, lost healthcare coverage about a year ago when she no longer qualified for her parents’ insurance plan. She enrolled in a Bronze plan from Anthem Blue Cross for $93 a month after taking into account a premium subsidy.

“I held my breath for the last year without insurance,” worried about incurring big medical bills if something unforeseen happened, she said. “But it is hard to get a twentysomething to pay another bill because so many of us are already drowning in student loan debt.”

AFP Photo/David McNew