Having spent 25 years working on and writing about healthcare policy, there’s one thing I can say without fear of contradiction: Health policy is confusing.
It certainly was to the Democrats who passed President Obama’s Affordable Care Act in 2010.
Several of us involved in health policy warned them that premiums would explode and health insurers would flee the individual health insurance market, but Democrats dismissed those warnings.
Health policy also confuses individuals, which helps explain why some people are criticizing the House Republicans’ American Health Care Act.
The amended version of the AHCA is a major improvement over Obamacare — especially for Texans.
Polls indicate there is concern is over preexisting conditions, even though that issue affects a relatively small number of Americans.
There is no preexisting condition exclusion for the 50 million seniors who receive health coverage through Medicare, and about 70 million low-income Americans are in Medicaid.
Another 155 million workers and their dependents have employer-based health coverage.
Employer plans must accept any new employee, although there could be a short waiting period for coverage if an uninsured hire had a major preexisting condition.
According to the Government Accountability Office, only 3 million to 4 million Americans prior to Obamacare were uninsured and had trouble obtaining coverage because of a preexisting condition.
A Washington trade association published a survey of several insurers showing that only about 7 percent of applicants for coverage in the individual market were declined because of a preexisting condition.
Fixing the preexisting condition problem would have been relatively easy, but Obama chose to blow up the system instead — and Texans felt the shock wave.
For example, Texas Blue Cross offered an excellent PPO policy pre-Obamacare with a $2,500 deductible.
Under Obamacare, the same basic policy’s deductible jumped to $6,000 with a premium increase of 50 percent. Ouch!
Yet by July of 2015, Blue Cross sent a letter to 367,000 Texans (including my wife) saying it was canceling that policy because the company lost $400 million on it. Double ouch!
Options for Texans have only continued to decline.
The Republican plan retains the preexisting condition provision.
However, states may obtain a waiver from Obamacare’s “community rating” rule, which would allow health insurers to charge those who have been uninsured a higher premium if they have a preexisting condition.
This provision is essential because it encourages people to remain covered and not game the system by applying for coverage only when they need expensive care.
States must create a safety net for those facing higher premiums because of a preexisting condition.
Some states will establish traditional high risk pools, others might try what Alaska and Maine implemented effectively: an “invisible high risk pool.”
Those provisions will lead to lower health insurance premiums while protecting people with preexisting conditions.
Prior to Obamacare, 35 states had traditional high risk pools, and some 200,000 Americans participated in them.
Indeed, Obamacare set up a temporary federal high risk pool until 2014.
Some state high risk pools worked well, others didn’t.
The Texas high risk pool worked reasonably well.
Under the AHCA, all of the states will have access to significant federal funds to create and run their safety net programs.
I expect Texas to take advantage of the AHCA’s opt-out provision, should it become law, which means we could see the return of a functioning individual health insurance market, where individuals have a wide range of affordable coverage options.
Maybe Blue Cross will even revive that excellent PPO plan.
Merrill Matthews is a resident scholar with the Institute for Policy Innovation in Irving.