Coverage Expansion and Pre-existing Coverage Transcript

Beverly Gossage

Hadley: Hello, I’m Hadley Heath Manning with the Independent Women’s Voice. I’m here with Beverly Gossage, an expert on the Affordable Care Act, or Obamacare, and a senior fellow with Independent Women’s Voice. When it comes to repealing ObamaCare there are tough questions being asked that deserve answers. So today, I’m going to ask some of the toughest questions, and Beverly will answer.

This series of questions is about Obamacare’s coverage expansion and preexisting conditions.

Question 1 (Hadley): I’ve heard that 20 million people gained coverage under Obamacare. Is that true?

Answer (Beverly): I’ve heard that number, too. But if we ask for clear data confirming where it came from, there really is none. We know that the extrapolation has said that there are millennials on their parents’ plan. But then again, we know that some states already had rules in place that required that they be on their parents plan up until age 30. Are they accounting them? We don’t really know.

Also, others have lost coverage at work due to the ACA mandates on employers, so then they bought a private plan. Are they newly insured? Again, we don’t know.

What’s puzzling is that the exchange application on Healthcare.gov required that you answer if you were currently insured. So, they have that data, I’m not sure why that has not been released.

Let me tell you what we do know. The U.S. Census data tells us 12.7 million more people answered that they had coverage. But again, the Census questions were changed after the ACA was implemented. We have data that 11.7 million people were newly added to Medicaid

But then again, 8 million of those already were eligible for those before the ACA and many of them had private plans and left those or were forced to go on to Medicaid.

We know 6 million people lost their private plans due to the ACA, their carriers going out of business or their ACA plans not being ACA eligible. Most have seen their plans double, quadruple, since the ACA was implemented on their rates. In some states, a child’s policy, for example, went from $28 a month up to $200. So, while we all may be pleased that no matter the number it appears that some people received an insurance policy for the first time, many have experienced the loss of doctors, their plans have been dropped, rates have increased substantially, and they have fewer plan choices.

So, we hear from those people every day, that they had these private plans before the ACA and they just want their old plans back. I think we can agree that no one wants to create another one-size-fits-none federal government-regulated plan that usurps that states’ authority to take their own changes and remove your freedom to choose the plan that you want. With the repeal of the ACA, we really remove those federal regulations that caused the small carriers to exit the market, and forced large carriers to reduce their network of doctors, caused rates to skyrocket, and limit their choices. And remember, state regulations and consumer regulations will be intact. We expect that even more people will have insurance after the repeal.

Question 2 (Hadley): What will happen to low-income people who have been added to Medicaid under Obamacare if the law is repealed?

Answer (Beverly): That’s a good question. A large group of those folks already had private plans. Employers realized he could stop covering them by dropping his coverage and just letting them go on to Medicaid. Others were making 100 and 138% of the poverty level, so that’s $7.50 to $10.50 per hour, and they were working let’s say 30 hours a week. Well they received a premium and a cost sharing subsidy through the exchange that lowered their rate substantially and their out of pocket. They actually liked their private plan. But when states expanded Medicaid, I’m sure without realizing it, they forced all of those people to go on to Medicaid or lose their subsidy, pay the full cost of their premium, and pay a very large out of pocket so they had no choice but to choose Medicaid. Medicaid was designed for the most vulnerable, the disabled, low-income children, pregnant women, and the elderly, not the able-bodied adults. Unfortunately, when states expanded it, it crowded out services for those who are disabled and on waiting lists. Of course these new people to Medicaid were now competing for the same Medicaid doctors who were already scarce. So most of these states have reported this program going over budget. States like Ohio had $4.7 billion over budget. It’s just not sustainable for the states or the federal government.

There are many suggestions for reforming the Medicaid program in general to give more control at the local level. But I think we can agree that we want to reserve the Medicaid program for those in which it was intended. So to answer your question, what will happen to those who were added to Medicaid, with repeal more competition, low priced options, broader networks, and jobs because employers will be out from underneath the federal regulations. Many of these folks will find they no longer need assistance paying for insurance and that they’ll still have access to charitable hospitals and clinics. In fact, we’ve discovered that many are college students maybe seeking a higher degree, and repeal will allow them to once again be on their college’s low-priced student plans which were not considered ACA qualified before.

Question 3 (Hadley): I have a child who’s not yet 26 years old. She would struggle to afford health insurance on her own so I’ve kept her on our family’s insurance plan. Will I be able to do this if Obamacare is repealed?

Answer (Beverly): That’s a good question. First of all, you’re right about your daughter likely struggling to buy a private plan now as the ACA has forced rates up especially for young people her age.  My son’s plan went from $52 to close to $300.  So the age provision on employer plans, some states as I mentioned have provisions like New Jersey up to age 31, Florida up to age 30, even with repeal, carriers and states may keep those age limits. They likely will, because if it’s popular, that’s what competition does, they try to compete so that people get what they like. So to answer your question you may be able to keep her on your plan at work but actually there’s probably a better answer. With the repeal of the ACA, your daughter will want to consider to private market again as we will remove those heavy federal regulations that caused carriers to leave, mandated benefits that she may not even want and increased premiums drastically and eliminated the healthy discounts that kept rates relay low for people like her. I’m confident she’ll be able to find a low price with portable options without being worried about being tied to your employer plan. The nice part about having your own individual policy like that, they cannot raise your rates due to personal claims nor drop you if you have a high claim and that provision dates back to 1996.

Question 4 (Hadley): I have a pre-existing health condition. What will happen to me if Obamacare is repealed?

Answer (Beverly): Well you know, I like talking about the preexisting conditions provision because it’s very much misunderstood. There’s so much misinformation out there. The proponents of the ACA will tell you that pretty much if you had a hang nail before the ACA you couldn’t get a policy. That’s simply not true. Did you know before the ACA, you were guaranteed a policy no matter what state you were in? Group plans could not and cannot deny you coverage due to a preexisting condition. Before the ACA, the private market decision was left up to states. Now there were two ways to cover those preexisting conditions with the private market. One is what we would call the ACA way. Seven states guaranteed coverage and they charged everyone the same rate, but of course those state’s rates were very high and they lost a lot of carriers. There were some people because the rates were so high who delayed coverage because again the rates are going to be the same so I might as well wait until I get sick, so states had to pass mandates and fines and then have enrollment periods that caused people to wait for coverage. You know it’s unfortunate we didn’t look at the results of these states and consider them laboratories because that would’ve helped us to avoid the ACA and inflict those ideas on all the states.

Now the other way to cover preexisting conditions is called the true insurance way. Under this way, there are no mandates, these are open enrollment periods necessary. You can buy a policy at any time and the rates are based on your potential of claims. It encourages people to buy while they’re healthy. Most states did this. They had very low rates, healthy discounts, and actually, scores of common conditions like high blood pressure with blood medication or mild allergies, or elevated choloseal in check with a medication, and many more were all accepted conditions. In fact, 88% of applicants were accepted with their preexisting conditions. But for  those who delayed coverage until they got sick, they that were expecting maybe a very high claim, they were guaranteed a plan in the high risk pool, and usually had four to five plans choose from, those rates were typically up to 150% of standard rates, but they were guaranteed coverage. Now some people will say but those high-risk rates were so expensive, but actually if you compare what the rates were to the ACA rates today, you’ll find they’re quite comprable. Did you know that in some states there were as few 1300 people, some 2000, in their high risk pools? Unfortunately with the ACA, all people paying those very high rates. With repeal, we can expect there to be more low priced options and competition in your state. We want you to have choices. You may choose to just keep the plan you have

Question 5 (Hadley): As a follow up question, what about a newborn with a preexisting condition? What will happen to them if Obamacare is repealed?

Answer (Beverly): That’s a good question. Actually, before the ACA, all group plans had to accept children within 30 days of birth no matter what their preexisting conditions are, no matter what preexisting conditions they were born with. Those same rules applied to the private market so if you had a plan and you called the insurance company and said, “We just had a baby and today is the baby’s birthday” your child would be added on even in those states that required health conditions and did actuaties based on premiums. They too would accept those children at standard rates. The beautiful part about that is that if you had a private plan for your child and they stayed on your plan through adulthood, you could slide them off onto their own plan as long as it had the same benefits, was the same plan you had as parents, and he or she could keep that plan for the rest of their lives. Because no one could ever raise their rates due to any claims they had nor could they be dropped from coverage or charged more because they had this preexisting condition at birth.

 

 

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