August 4, 2014 by Tony Novak
The majority of Americans remain opposed to the 2010 law we call “Obamacare”. Poll results show opposition is rising rather than fading away was as earlier predicted. Somewhere between 55% and 59% of Americans view the law unfavorably, depending on which poll result we are reading. Yet repeal of the massive and dramatic legal framework of this law is unlikely. That leaves professional insurance and benefits practitioners in the difficult position of finding ways to bridge the gap between what the law requires, what is available, and what clients will accept.
Certainly there is no shortage of opinions on how to fix the problems. The most popular approaches involve allowing the market to introduce additional insurance and employee benefit options to fill the gaps and serve more than 40 million people left uncovered by Obamacare.
The published responses to Obamacare’s shortcomings fall into one of two categories: “theoretical” or “practical”.
A great example of the theoretical free market response is this comment expressed by retired orthopedic surgeon James Strite: “If you removed government from health care, banned employers from providing coverage, made insurance companies compete across state lines, made it illegal for MD’s to “participate” with insurance plans, reformed the tort system, outlawed HMO’s, etc. and truly let the free market work in medicine costs would decline and most people would be able to afford a health insurance policy. The truly indigent would receive charity care from MD’s and hospitals as they did successfully for years. The government has ruined a great profession and driven the costs through the roof with insane rules, regs and the lack of competition at all levels of healthcare. Now most people don’t think they can afford health care unless their government or job provides it for them. Wrong! We are bankrupting the country and getting less and less access to affordable, quality care. The current system could not be worse. Wake up everyone!” Surely these are thought-provoking ideas but we aren’t going to see them implemented anytime soon.
In the other category, former senator Phil Gramm recently shared his thoughts on the most “doable” cure for Obamacare in an editorial published last week by the Wall Street Journal. He summarizes his suggestions by saying “Americans should have the right to buy insurance that meets their own needs.” We can refer to this line of thought as the “freedom option”. It would allow a wider range of individual choice to health care decisions than a strict interpretation of current law will permit. Regardless of the political response to such proposals in the future, I already see signs that market and government is moving toward acceptance of these concepts.
By the end of this year some of the insurance and employee benefit options we say are not possible or are not available now are likely to be options available in the market. The option to make choices outside of the current law will reduce political resistance and appease some people who are currently squeezed out by the new law. These changes will be made by the Treasury Department and Department of Health and Human Services without any Congressional action. Of course there is no way to know for sure what specific changes will be made but these five are likely to be high on the list of possibilities:
1. Allow insurance to be purchased on the exchange across state lines. For example, a less expensive policy available to Pennsylvania residents could be purchased by residents of New York even though it does not meet all of the New York state requirements.
2. Allow employers to pay for individual insurance on a pre-tax basis. This would allow a return of traditional Health Reimbursement Arrangements.
3. Extend mini-med plans. Ease back on current plans to restrict their use.
4. Consider short term medical insurance to count as allowable coverage. People in transitional situations would avoid tax penalties.
5. Push colleges to accept a wider range of insurance plans. Today’s universities dictate which plans are acceptable and this pushes up the costs for students.