In a previous column (The Failure of Soviet-Style Healthcare), I stated that, “Obamacare, arguably the worst piece of Soviet-style top-down legislation ever authored by a single political party, is in its death spiral.” Since then, Obamacare’s death spiral has increased dramatically.
The Cruz Provision
Because of the illegal, congressionally unauthorized payments to health plans to offset losses built into Obamacare benefit designs, health insurance carriers became greedy. Health insurance associations like Blue Cross and Blue Shield and America’s Health Insurance Plans (both lobbying groups) are adamantly against the Ted Cruz provision.
The Ted Cruz provision allows providers to offer health benefit designs that are less comprehensive and cheaper than Obamacare plans as long as the providers also offer at least one Obamacare plan. This seems to be a fair compromise.
But that means health plan providers might earn less revenue due to cheaper plans. The Blue Cross Blue Shield Associations and America’s Health Plans argue that the Cruz provision “ . . . is simply unworkable in any form and would undermine protections for those with pre-existing medical conditions, increase premiums and lead to widespread terminations of coverage for people currently enrolled in the individual market.”
Questions: with pre-existing condition protections built into the legislation, how would the Cruz provision undermine those protections? High-risk pools have addressed the scare mongering about increased premiums for people with pre-existing conditions, so why would health insurers raise premiums? Greed. They have been at the government trough far too long.
Political Horse-Trading
Remember that only Democrats created Obamacare in secret. Republicans were not involved. Now the Republicans in the Senate have created their own health care bill, in secret, to repeal Obamacare and put a better plan in place. Remember the crooked Democrat deals like the Nebraska corn-husker kickback, the Louisiana purchase, and gator aid?
Well, the Republicans are engaging in the same corrupt system. The Republican legislation has two provisions to encourage Lisa Murkowski (R-AK) to vote favorably. The Better Care Reconciliation Act (BCRA) retains two Obamacare taxes (net investment tax and Medicare “high income” tax), meaning Republicans have bought into a higher tax, big government, socialist health care plans. Billions of dollars are being thrown at Medicaid and Opioid use in specific states. Republicans are no better than the crooked Democrats.
Individual Market
For those of you unfamiliar with the health care market, let me briefly outline the market. There are four sectors: individual, small group, large group and major/jumbo accounts. In health insurance, risk is spread over the numbers insured. Premiums decrease as the number of insured increase.
The best premiums (assuming equivalent benefit designs) go to major or jumbo accounts, which have the smallest profit margin as a percent but the largest profit margin in dollars. Large group has the next best premium, followed by small group. Individual, because the risk is spread only against the individual, has the highest premium and the highest dollar profit margin.
So the question is how does one reduce premiums for individuals, as the Cruz provision provides through less comprehensive benefit designs? One idea is to make the individual market a “virtual group,” or more precisely, three groups. The model already exist in the form of TriCare, the Defense Department’s health plan for military dependents.
TriCare divides the United States into three sections. Health plans bid on the three sections but only one health plan per section is awarded the contract. Competition helps control pricing. The individual market could imitate the TriCare model, creating three “Virtual Individual Groups,” which health plans could bid for the business.
By creating “Virtual Individual Groups,” health plans would evaluate and bid on the individual market as a major or jumbo account. The up side is lower premiums for individuals, creating more affordable plans. The downside is health plans lose revenue because the individual market produces high profits. Some health plans may have to adapt their business models to a new reality but that is a small price compared to improved health care access and quality.
In the end, Americans want affordable, comprehensive healthcare. Republicans allege they want patient-centered, market driven health care. Democrats want big government, totalitarian, single payer health plans with the government as a middle-man between patient and doctor (I know doctors who left medicine due to Obamacare’s onerous regulations).
And health insurers don’t give a damn about health care as long as they get their profits. How do I know? Health plans are fleeing Obamacare exchanges because the government is no longer illegally making up for health plan losses.
Food for thought: The government entered the student loan program and tuition increased dramatically across the country. The government entered health care, and premiums increased dramatically across the country. Draw your own conclusion.