I’m sure most of you remember the bad old days before Obamacare, when insurers could deny insurance (or charge massive premiums) for people who had the bad luck to be sick. It was a nightmare for millions of Americans who went broke and/or died because of it. Well, it looks like the Republicans are finding ways to undermine that provision of Obamacare. They won’t rest until they destroy it. I’m not sure they even know why they’re doing it anymore.
Obamacare did away with this institutional discrimination sustainably. It does have a provision called “guaranteed issue” that requires insurers to sell to all customers regardless of health status. But it also has a provision called “community rating,” which requires insurers to price plans based on the overall risk across a large pool of customers. A 40 year old with a clean bill of health and a 40 year old with diabetes must be able to buy the same plan for the same price. Then, to make sure all (or nearly all) customers can afford a plan, it offers a sliding scale of subsidies, more if your poor, less if your middle class, phasing out altogether at 400 percent of the poverty line1.
These formed the pillars of a viable marketplace. The law delivered insurers tens of millions of new customers, and delivered those tens of millions of customers the security that comes with comprehensive health insurance. But the structure of it made pre-existing conditions protections vulnerable to indirect attack, as well as outright repeal. Cut the subsidies, and the market shrinks; erect other barriers to enrollment and the market shrinks further; if the market shrinks enough, premiums increase; subsidies will cushion the blow for some, but they don’t do anything to help people with upper-middle class incomes. Drive too many people out of the markets, and insurance companies will pull up stakes. Individual health insurance might become unavailable in many regions of the country. Underwriting might still be a thing of the past. But what good are on-paper pre-existing conditions protections to a 40 year old diabetic if his health insurance costs thousands of dollars out of pocket every month, or isn’t even for sale where he lives?
This is how Republicans are coming after your health care.
It’s pretty diabolical:
The Republicans’ tax-and-health-care cuts legislation extends tax cuts and tax subsidies of all kinds, but not an enhanced tax subsidy for marketplace insurance, which they’ll allow to expire. The Trump administration wants to cut the open-enrollment period by two weeks, and deny benefits to Dreamers, and it hopes to codify these objectives in Trump’s tax-and-health-care cuts bill.
That bill will further shrink ACA marketplaces via pinprick sabotage, including by eliminating passive re-enrollment—a policy familiar to everyone who lets their workplace health plan roll over each year. It reduces attrition by re-enrolling consumers who don’t affirmatively choose to change or cancel their plans, so that people don’t ruin their lives through forgetfulness.
Taken altogether, the consulting group Wakely estimates that Republicans will reduce exchange enrollment by up to (or possibly more than) 13. 6 million beneficiaries, which is greater than half its current total. That will drive up premiums both by changing the composition of beneficiaries (healthier people are more likely to drop out) and by encouraging insurance companies to exit the markets.
You can read the whole report here, or Charles Gaba’s write-through here.
Cutting the subsidies will price many people out. That makes the GOP very happy. But the passive enrollment part is also a killer. It’s similar to all the hoops they are making the Medicaid recipients go through to keep coverage as well. They are making it as complicated and difficult as possible so that people will inadvertently forget some bureaucratic step and fall off the rolls. They may not even know it’s happened until they try to get an appointment or end up in the emergency room.
This is horrible, of course. It’s what they do. And Democrats should never have been complacent about Obamacare. After all, Republicans have never stopped trying to destroy Social Security since it was enacted 90 years ago. Nothing decent has ever been safe from them.
I have no idea how all this sturm und drang over the One Big Brutal Bill will come out. And neither do I have any assurance that the GOP will pay at the ballot box for passing it. It certainly seems as if it should. But then, it seemed as if Americans wouldn’t want to re-elect the convicted felon who incited an insurrection either. I simply have no capacity to predict anything in this environment. Suffice to say it will be a nightmare if it passes regardless.