#AHCA Recap: What You Should’ve Learned

Here is what to expect.

a. Heath insurance premiums are almost certainly going higher. The reason is NOT because carriers are ripping you off. It IS because the “risk corridor” provisions are now gone. Premiums are determined by MATH, not politics. The PPACA had a mechanism to spread losses among the other carriers, if a health insurance carrier suffered losses due to large claims. However, those provisions have now expired, meaning that carriers will continue to bleed money, something that companies, armed with math, do not like to do. That means higher, definitely higher, premiums in the future.

b. The President can make health insurance markets (the ACA) more unstable, but won’t be solely to blame. The most distasteful thing for me to read is a wrongly-placed overgeneralization. The fact is that the President (or the HHS, same thing), has substantial leeway within the ACA. That said, the original problem with the ACA is that there is an inadequate incentive for young and healthy people to enroll in health insurance. That leads to groups of policyholders that are older and sicker, which leads to higher bills to be paid by the carriers, and that leads to higher premiums.That incentive can be notably weakened, which can leave the remaining policyholders to be those that are sick. Now read point a. Insurance premiums are determined by math, not politics. It is a certainty that you will read accusations that the President is creating instability in health insurance markets. Actually, health insurance markets are already unstable, due to the nature of the ACA. And while the President can make it worse, that isn’t the same thing as he will be entirely to blame. It is an almost-guarantee that a partisan somewhere will try to pin the ENTIRE thing on one person/reason or another. It isn’t that simple, it never is.

c. Boehner was right. A quote from this CNN.com article, a month ago:

The former speaker noted the difficulty Republicans would confront in getting everyone on board.
“This is not all that hard to figure out, except this: In the 25 years that I served in the United States Congress, Republicans never, ever one time agreed on what a healthcare proposal should look like. Not once,” Boehner said.
He said lawmakers were too confident in how easy they thought the process would go.
“All this happy talk that went on in November and December and January about repeal, repeal, repeal — yeah we’ll do replace, replace — I started laughing because if you pass repeal without replace, first, anything that happens is your fault. You broke it.”
Boehner said he warned GOP leaders about repealing Obamacare without a replacement ready because the members “will never ever agree what the bill should be.”

Comment:  Boehner’s description could not possibly be any more precise.

d. But…this is probably not over. This article from the New York Times: Affordable Care Act Repeal Is Back on the Agenda, Republicans Say (Link). We will see, but you can recall that I had a pretty simple list of things that could’ve been done to the AHCA in order to fix it. This is important to the President because the rest of the domestic agenda, like tax reform, will depend on the funds saved by reducing the amount paid to Medicaid. As mentioned before, the AHCA is a Medicaid reform bill, more than anything else.

e. Government and health insurance carriers are here to stay, rightfully so

The idea that the government has no business in the health insurance market is simply wrong. The idea that health insurance companies have no place in the healthcare industry is also wrong. In other words, the extremists, on both sides of the spectrum, are (unsurprisingly) wrong. Before you read too many opinionated articles, that may appear to be an impartial reporting of facts, let’s take a look.

If you leave it entirely to individual choice, the person that is uninformed is forcing financial risk upon the entire population. Let’s take the example of a world where there are only 2 people on the planet, and robots deliver healthcare if you need it. One person purchases health insurance, and the other does not. The one that doesn’t purchase insurance gets sick, cannot pay, leaves the bill unpaid. The second one goes to the hospital. GUESS WHAT? The price is higher, the out-of-pocket cost is logically higher. The probability of this happening increases whenever a person goes without health insurance. The result is that when you read something like “people should freely choose whatever they want,” that is the fatal flaw of that argument. Those same people are arguing that financial efficiency is being sacrificed, when in fact, it is that the uninsured are making financial risk decisions on behalf of the entire rest of the population, whether they know it or not.

If you think that taking away health insurance carriers will solve this, then you are also presuming that the government is capable of calculating, allocating the funds, and executing the system efficiently. See that lonely island on the horizon? You are its only inhabitant.