Minefields galore! The post-Trump terrain is pockmarked - so many decisions that lurk, threatening havoc. A few years ago Pandora pessimists predicted calamities “down the road”; but since “down the road” was not imminent, Trump’s minions pushed through changes that now emerge as calamitous. Before President Biden can tackle health care USA, he must deaden these mines.
The mines were buried in a blitz of feel-good hype.
Today’s healthcare mine — the mine du jour — is the cheap insurance policy that emerged free from the strictures of all those Obama Care rules. Trump unfettered the marketplace. No more caps on premiums. No more required services. No more limits on profits. No more regulations tied to income of enrollees. And a return to the good old days of “medical underwriting” when insurers charged sick people more.
The benefit? Cheap insurance. Who needs coverage for traumatic brain injuries? For strokes? For cancer? Who needs physical therapy? And why not saddle enrollees with exorbitant deductibles and co-pays? They probably won’t get sick, won’t need to pay them anyway, at least not for a few years. Meanwhile, thanks to Trump, the ultimate free-market enthusiast, Uncle Sam bowed out of this “short term” marketplace, giving shoppers who click on the correct buttons bargain premiums, just as savvy clickers can find the cheapest mortgage, the cheapest car, the cheapest gizmo. In 2019, 3 million people signed on to these wunderkinds, 2% more than in 2018. This past year, when people lost health insurance and jobs with the lockdown, those insurers continued to sing their siren songs in cyberspace.
Bargain-hunter enrollees are now detonating these mines. The initially-healthy enrollees are getting sick, going to the doctor, ending up in a hospital, and facing bills that leave them confused, mad, and at risk for the whole shebang — because of the fine print.
A ProPublica story featured a returning Peace Corps worker who bought two of these policies, to tide him over until he started graduate school. He was healthy and young; the policies seemed to promise the basics.
But the basics began with a $2,500 cap for a surgeon - not enough for the surgeon who did the subsequent appendectomy. More fine print later, he faced a $35,000 hospital bill.
Under the Affordable Care Act, short-term policies were legal, but they were a short-term option, limited to three months. They were supposed to tide people over until they signed onto a regular ACA policy, one bound by all the governmental strictures. With two actions, President Trump jump-started a robust industry.
First, he expanded the three months to just less than one year, then allowed for re-upping the enrollment. Short-term segued into as long as you paid the premiums.
Second, he did away with the penalty for not buying “approved” ACA insurance. Under the initial ACA rules, you paid a penalty if you said “no” to insurance. Under President Trump, you could forego insurance altogether, or buy a short-term policy. In either case, you didn’t incur a fine.
Presto — President Trump created an industry that offered a dangerous product, insurance that wouldn’t pay for much. The industry flourished.
The standard measurement for a policy has been the amount paid out in claims, compared to the amount collected in premiums. An enrollee wants most of the premium dollars to go to hospitals, physicians, therapists - in short, to healthcare. The short-term policies pay from 26 to 58 to 67 percent of premiums in claims; there is no requirement to pay a set percentage. In contrast, the ACA policies pay from 80 to 85 percent. The law sets a threshold: if policies pay out less, they must give enrollees rebates. Brokers also gain: on short-term policies they can get commissions up to 23%, compared to 2% on ACA policies.
President Biden expanded access to ACA policies, giving everybody who is uninsured as well as poorly insured a chance to enroll in a policy that offers genuine protection.
Sadly, many enrollees are still happy, thrilled with the low premiums — until they get sick, and discover the dangers in the fine print of their bargains.
Joan Retsinas is a sociologist who writes about health care in Providence, R.I. Email retsinas@verizon.net.
From The Progressive Populist, July 1-15, 2021
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