If there’s no problem then we can just continue to implement ACA as it has been implemented.
I agree that this is an embarrassment of a plan for various reasons, but I have a question about the 30% surcharge for having a lapse in coverage.
Let’s say that I am young and healthy, and would get a plan for, say, $400/mo. Under the new plan, can I just wait until I get sick and then buy a plan for $520/mo? If so, that will swamp the market. Why wouldn’t everyone take that simple step?
I am 40 years old and my daughter is 13. I pay $830/mo for both of us. Under this plan could I cancel our coverage and save ~$10k next year? If something tragic happens, then no problem, I buy the insurance and still come out ahead.
Then, assuming it was something like an accident or a disease that can be cured, I cancel the insurance again until the next time I need it. Seems crazy.
As with ACA, the plan doesn’t go far enough. It takes a lot to induce young healthy people into the market. The incentives in both ACA and the GOP plan are way too mild to work, although I think the GOP plan is slightly better in that respect.
Under ACA, a young person can skip insurance and worst case, pay 2% of their income as the penalty. Then just buy insurance when they get sick. Given the way ACA has actually been implemented though, that way is for suckers. All you actually have to do is reduce your withholding so that the IRS doesn’t have a refund to dock. And you probably don’t have to pay the penalty anyway. Only 6 million Americans were projected to have to pay it:
The Republican plan actually offer a lot more carrot and stick to get young people signed up.
No. Many Republicans are just that stupid. I’ll cite from Education, Not Income, Predicted Who Would Vote For Trump | FiveThirtyEight — the very URL name describes your error.
In North Carolina, Wilkes and Caldwell counties voted for Trump by 3-1 margins.
In Kentucky, Pike and Laurel counties voted for Trump by 5-1 margins.
In Alabama, Walker, Jackson and DeKalb counties voted for Trump by about 5-1 margins. In Blount county the margin was more than 10-1.
These are all among the U.S. counties with lowest median income, but also have lowest rates of college graduation. As Trump himself bragged, it is the “poorly educated” who make up his base, not the rich or poor.
That’s a bit binary. There are actually at least 4 possibilities:
(1) The ACA is fine as is and doesn’t need any change to continue running smoothly.
(2) The ACA has issues that can be fixed by minor tweeks to it.
(3) The ACA has moderate to severe issues that could be fixed by more significant modifications.
(4) The ACA has major problems and will fall into a death spiral without wholesale changes to it.
The Republicans claim (4). I would guess it is (2), although at this point something closer to (1) and (3) can’t be ruled out.
Here is a discussion of the markets under the ACA and the AHCA: https://www.nytimes.com/2017/03/15/upshot/obamacare-isnt-in-a-death-spiral-its-replacement-probably-wont-be-either.html
The basic conclusion is the ACA market is basically stable as is and the AHCA market would also stabilize but only after some “turbulence” while the ~24 million lose their insurance.
This is pretty clear statement of the endgame.
The AHCA’s Tradeoff: Giving Up Vital Care to Get Tax Cuts for the Rich
My bold.
And guess who’s in those soon-to-be denied groups? That’s right: people who voted for Trump and believed his lies about protecting them. Sad.
And the voice of the turtle is heard in the land. Surprisingly, the turtle says “Oink!”.
Don’t forget about the open enrollment issue. You might have to wait until the next January for coverage to kick in. There are exceptions for life events, but getting sick is not one of them.
It could be argued that it is a gift to the insurance companies rather than the older customers. In the insurance industry, charging the young less than the old is called “age-adjusted community rating”.
There is another option. All of us who have enjoyed employer health insurance have probably benefitted from what is called “pure community rating” where everyone pays the same rate, for risk averaged across the entire group.
This is also a feature of other universal health coverage around the world.
You can opt out of employer coverage though and many young people do. I didn’t take advantage of my own plan until I’d been there a couple of years and could afford the employee share of the premiums. So it’s not PURE community rating, since the pool will tend to not have some of the lowest risks in it.
But, by the same token, if young people get actuarially accurate rates, then their participation in the insurance pool won’t help the overall cost problem for older people.
It will, I suppose, mean that the insurance market for young people isn’t a lemon market.
I thought the point was that younger people require less health care than older people.
The GOP bill doesn’t give young people actuarially accurate rates, it just exploits them less than ACA does. The young would still pay more so the old could pay less.
Also, I don’t remember ACA being sold as a way to give older people a break on their insurance at the expense of younger people. It was sold as a way to insure everyone, and subsidies would help those who were under a certain income level. Given the presence of subsidies, the main beneficiaries of ACA’s exploitation of the young are older people making too much to qualify for subsidies. I’m not sure that’s social justice, although it is good politics.
No program runs itself. A program that could work will fail if the people in charge of it want it to fail for political purposes.
If there’s actual negligence in running the program that’s one thing, but if Trump merely runs it as Obama did you can’t put that on the Republicans.
Do you really think that Trump will run it exactly as Obama did?
He hates anything to do with Obama, why would he be a good steward for Obama’s signature law? It’s a laughable supposition.
Another group that gets majorly screwed by this bill is rural residents, who are definitely part of the Republican base. The GOP bill calculates subsidies to buy insurance based strictly on age, while the ACA also takes into account the fact that insurance is much more expensive in rural areas than in cities. So rural people will see much sharper rises in their health insurance costs than urbanites. For the GOP to put forth a bill that primarily hurts old people and rural residents seems so politically suicidal that it makes me suspect they really don’t want to pass anything at all.
Why so?
We could if they continue to interfere in things like risk corridors.
If the current administration ran the ACA as legislated, it would probably survive - but I expect something between benign neglect and malicious interference.