Changes To Health Insurance In A Trump World

healthcare reformMy Comments: 40 years ago found me selling health insurance policies. I’ve seen how they evolved to where the annual premium increases, as little as ten years ago, would eventually result in collective premiums that exceeded the Gross National Product. That’s ridiculous, and something had to change.

Along came ObamaCare and it’s promise to bring everyone into the mix, the still healthy and the not so healthy. Done properly, it would make everything more predictable, and fulfill the promise of health insurance for everyone at a sustainable cost. It hasn’t happened for a lot of reasons.

The following comments were written by a Sean Williams and published on 11/27/2016 at http://www.fool.com/. I share it with you since readily available health care for ALL OF US is to me a very legitimate expectation if you are a citizen of this country.

What follows are the words written by Sean Williams:

It’s fairly safe to say that big changes are coming to Washington in less than two months. After Donald Trump’s surprising victory on Nov. 8, and with Republicans hanging onto a majority in both houses of Congress, we’re on track to have a government unified under a single party. It remains to be seen if there’ll be any sort of sweeping reforms, but having a government with one party clearly in control should make it considerably easier to pass legislation.

Donald Trump, for his part, put out a laundry list of things he’d like to accomplish within his first 100 days in office following the election. This included cleaning up Washington by proposing term limits on all members of Congress, renegotiating NAFTA, filling the vacant seat on the U.S. Supreme Court, reforming individual and corporate income tax laws, and repealing and replacing the Affordable Care Act, just to name a handful of the actions he proposed.

But what do American voters care about most? That was the question posed to nearly 1,800 Americans by Reuters/Ipsosin the days following the election. While 14% suggested that immigration reform should be Trump’s top priority, and 16% said jobs, the issue that Americans clearly care about most is healthcare, with 21% of the vote.

To understand why Americans are so frustrated with the current state of healthcare, we only need to look at some changes in Affordable Care Act insurance plans in the upcoming year compared to 2016. For example, the national benchmark plan, which is the second-lowest-cost silver plan, is slated to rise by 25% in 2017. That’s some of the highest premium inflation the country has ever witnessed. We’re also seeing a discernable increase in deductibles, with a HealthPocket analysis finding a 15% increase in deductibles for silver plans, which are the most popular. The “affordability” component of the Affordable Care Act is most certainly being challenged.

Why is the ACA — more commonly referred to as Obamacare — running into problems?

Part of the blame can be traced to some very poor initial estimates. The Congressional Budget Office at one time expected up to 21 million people to be enrolled by 2016. This year’s CBO estimate stands unchanged at just 10 million marketplace enrollees. The CBO estimates were too high from the get-go, and insurers are fighting for a much smaller pie than expected.

At the same time, Obamacare enrollees have been shown, via a Blue Cross Blue Shield Association meta-analysis, to be costlier than employer-based membersby about 22%. Remember, before Obamacare was introduced, it was commonplace for insurers to pick and choose who they wanted to cover. Under Obamacare, insurers can’t turn away people with preexisting conditions. This means millions of people who’d previously been shut out of the system are now free to join; for insurers this has led to substantially higher costs than anticipated.

We’ve also witnessed a lukewarm reception from younger, healthier adults, who are vital to the success of Obamacare. The individual mandate is the actionable component that penalizes consumers for not purchasing health insurance. This prospect of being penalized (the greater of $695 or 2.5% of your modified adjusted gross income in 2016) was expected to coerce healthier people to enroll. However, it hasn’t had its intended effect. According to the Kaiser Family Foundation, the Shared Responsibility Payment (the official name of the penalty for not purchasing health insurance) is estimated at $969 in 2016, whereas the cost of purchasing even a cheap bronze plan could run between $2,400 and $3,600 annually. It’s simply cheaper for healthier young adults to remain uninsured.

When the dust settled, three national insurers had drastically pulled back on their ACA-based coverage. The largest insurer in the country, UnitedHealth Group (NYSE: UNH), cut back from offering coverage in 34 states this year to just three in 2017, while Aetna (NYSE: AET) and Humana (NYSE: HUM), which have had their merger blocked by regulators, are reducing their county-based coverage on a year-over-year basis by nearly 70% and 90%, respectively.

Less choice and a perceived-to-be unsustainable platform are pushing prices rapidly higher, and consumers making more than 400% of the federal poverty level ($47,520) are being exposed to the full brunt of the premium increases.

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