Say Good-Bye to Health Insurance as We Know It

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I, like many of you, am wondering what’s going to happen to the health insurance market now that steps have advanced to repeal and replace the Affordable Care Act (ACA or Obamacare). As many of you know, I voted for Trump with the hope that ACA would be replaced. I’m also pretty psyched that Trump bombed Syria for using chemical weapons, although I’m not happy about the continuous moves to defund Planned Parenthood. Ask me about the latter some time because I think Cecile Richards is blowing it from a PR perspective.

Unlike Bernie Sanders, I don’t think that thousands of Americans will die if the proposed American Health Care Act (AHCA) becomes law. I am confident, however, that insurance companies will find every way possible to put the screws to the average health care consumer by using this pre-existing conditions nonsense to the best of their advantage. I hope there will be a very narrow definition of what constitutes a pre-existing condition. I’m thinking anemia and multiple sclerosis are not in the same category. But I’m not hanging my hat on that one. The responsibility for establishing those definitions will probably move to the states. Here in Texas, a sunburn might be considered a pre-existing condition.

That said, I don’t think the Obamacare approach, where no one needed to disclose his or her health status to the potential insurer, was effective. It made the insurance market inefficient. It’s impossible to risk-price a potential membership group if the health status of the individuals is unknown. This is one of the reasons that premium prices blew up, insurers exited the market and Obamacare imploded.

Here’s the thing about the anti-discriminatory nature of the Obamacare approach to pre-existing conditions. It’s still ”discriminatory.” Those with pre-existing conditions might pay more for health care than others who are on the same health plan. That’s because health insurance does not cover 100% of all health-related costs. Therefore, any time an individual sees a doctor, has a procedure or fills a prescription to address a pre-existing condition his or her comparative costs go up.

How any of us feels about the health care system’s approach to pre-existing conditions boils down to one important question. Can’t we do health insurance better?

Pondering this concept is what I’ve been doing for the past year as I continue work on my book Health Care: Meet the American Dream. I’m proposing, among other things, a consumer-based model for health care, where the majority of expenses are paid directly to the provider (hospital, doctor, etc.) at market-based rates. It’s ridiculous to pay hundreds of dollars a month in premiums to a health insurance company so a visit to a primary care doctor is “free.” The better approach is to just pay the doctor directly. Health insurance would be purchased purely for catastrophic reasons.

If you need surgery to address sleep apnea, you should get a loan. We can get a loan for a house and for a car. Why not for a knee replacement? For the relatively healthy – and that includes many individuals who have so-called pre-existing conditions – the cost to treat their health care on a consumer basis should be less than paying premiums, deductibles, co-pays and a percent of charges for years and years of their lives.

Sadly, insurance companies hold sway over the government because their payments to providers subsidize the public health programs. Commercial payers reimburse providers at rates higher than Medicare and Medicaid. Medicaid notoriously underpays, which is why the Medicaid expansion was financially problematic. It gave access to health insurance for millions of people, yet penalized the providers who delivered it.

This begs the question of how we can deliver public health more affordably and effectively. We have a civic responsibility to care for the needy, to elevate the poor and to keep the promise of Medicare. I have thoughts on all of these issues too, but you’ll just have to wait for the book!

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