Pre existing conditions and health care affordability

The single biggest flaw in the design of the Affordable Care Act was the provision that required insurance companies to provide health care insurance to those with pre-existing conditions. And yet Democrats made it a core issue in 2016 and Republicans stupidly got on board for fear of being called heartless. As someone with pre-existing conditions including heart issues and with a long career in health care and health care financing, I am appalled at the poor job the media has done educating the public and the fear mongering by politicians on the issue.

First, because of the Affordable Care Act people like me were thrown off the affordable high risk plans many states provided their citizens and into the exchanges. Over the last few years, I have watched my families premiums soar from $1,300 a month to what would have been over $3,100 a month next year, if my daughter who just began working at the end of the summer did not qualify for health insurance next year through her job. So instead we will be paying over $2,400 a month next year for less coverage and one less person. If you are a supporter of the ACA is this what you call “affordable health care”.

In other words, individuals like me with pre-existing conditions simply make health care insurance unaffordable for everyone including ourselves, if we purchase our health insurance on the various state health insurance exchanges. Minnesota has tried a very innovative solution by re-insuring health insurance companies for 80% of a single individual’s annual claims between $50,000 and $250,000. As a result, health insurance premiums in the state began to decline.

The governor of Minnesota made the stupid comment that “Minnesota taxpayers should not have to keep subsidizing insurance companies to hold down health care costs. We need a marketplace solution.” This comment reflects total ignorance and unfortunately seems to be a common misconception of politicians everywhere.

There is no way to make health insurance affordable to those with pre-existing conditions unless you subsidize their health care, end of story. Just as there is no way you can make health care affordable to the poor unless you subsidize their health care, which is what we do with various Medicaid programs.

Under the ACA the health care of those with pre-existing conditions is unfairly placed on those healthy individuals and small group employers that have no option other than to purchase health insurance through the exchanges. This means a very small segment of a state’s population is carrying the weight of those with pre-existing conditions on there shoulders.

In Medicaid, the subsidy for the poor is paid primarily through a combination of state taxpayers, US taxpayers (through Federal reimbursement of Medicaid costs), and providers (through cost shifting).

In simple terms Minnesota’s governor is just being silly and ignorant (unless he is being deceitful), the question is not whether his state’s taxpayers should help fund pre-existing conditions (assuming they want those pre-existing conditions to have health care coverage), but what is the best way to do it? That same question applies to every state.

My hope is that anyone reading this understands that when it comes to paying for health care for those with pre-existing conditions, there are two fundamental questions each state should address. The first, is how much should an individual pay towards their own health care? The second, is how best to subsidize health care for those pre-existing conditions? This second question and two parts to it. Where should the money come from? How should the health care plan be designed to minimize the amount of public subsidies needed?

I will provide my opinions on these three questions. But you the reader should form your own. With regard to personal responsibility, it is my feeling that an individual should pay up to 150% of the cost of health care for someone in a similar pricing group (i.e. Male over 55 to 64). In addition, the plans available should be restricted to those that have a high degree of medical management incorporated into them (like HMOs or some PPOs).

Next, to the first part of the second question, the money should never come from health insurance “pools” like they do under the ACA. The ideal source is some general tax revenue pool with no relationship to health care. Why? Because when you include the excess costs of those with pre-existing conditions in any health insurance pool, you raise its cost and that discourages people from buying health insurance for themselves. We don’t want a system that provides health insurance for those with pre-existing conditions by making health insurance for healthy people less affordable.

To the second part of the second question, I have provided a partial answer above by indicated that health plans should be managed care plans where managed care entities “profit” by holding down health care costs. Ideally, in the future, state governments could offer targeted plans by managed care entities based on proven success at achieving excellent health care outcomes for specific medical conditions. So while the “wrapper” on my health plan would look like that available to healthy consumers, the provider network would include providers that have excellent cost and outcome results for “heart patients”. Other plans would be built around provider networks with excellent outcomes for diabetic patients or asthma patients or the many other chronic conditions that cause people to be considered as having a pre-existing condition.

So next time your local politician defends the ACA by pointing to the fact that it provides coverage for those with pre-existing conditions, challenge them. Does it really? How are the health care costs being funded? What is being done to manage those health care costs? Are healthy people finding their health insurance unaffordable because of the inclusion of those with pre-existing conditions? Let’s have an honest debate and not a political one.