Health Insurance Still Not Affordable

2016 ended with over 30 million uninsured Americans and 74 million on Medicaid and CHIP (Children’s Health Insurance Program).  The number of uninsured steadfastly increasing for the past 2 years with the expected rate to rise to 32 million by 2019 due to the 2017 repeal of the Individual Mandate (effective for the 2018 tax year) and the failure of Congress to include ACA stabilization in the March Omnibus spending bill.  With a third of US Physicians not accepting Medicaid or uninsured patients, health care reform is a hot topic in Congress.

The ACA reform thus far by the GOP has been: a reduction of ACA’s advertising budget by 90%, reduction in open enrollment to six weeks, and reduction in funds for personal enrollment assistance by 41%.  The failure of the ACA stabilization in the Omnibus bill can result in a 10% increase in Obamacare rates.  Critics of this omission fear that the overall costs of all insurance premiums, including those purchased in the Health Insurance Exchange, will significantly increase forcing some carriers to stop selling coverage. Adverse selection is a valid concern stemming from the repeal of the Individual Mandate.  Adverse selection, as it relates to health insurance, is the scenario where the sickest buy insurance and the healthy refrain which ultimately drives up the premiums.  Young adults (ages 26-34) are already opting to be uninsured due to the increase in premiums for 2017, with the penalty being less than the cost of the insurance.   This demographic is imperative to the insurance market as their premiums would offset those whom are older and sicker.  Also some anticipate that the repeal of the Individual Mandate will lead to the repeal of the Employer Mandate and eventually to Obamacare.  Others argue that it will not have such an affect since the cost of insurance far exceeds the penalty.  With the uninsured rates highest in the southern states, at 23 million as of March 2018, one explanation is these states choose not to expand Medicaid (section 1115 waiver).

Republicans would like to leave the Medicaid expansion for the individual states to administer.  Being that each state has its own individual challenges it faces, states are allowed to file a waiver under section 1115 of the Social Security Act which gives the Secretary of Health and Human Services authority to approve experimental, pilot, or demonstration programs that promote the objectives of each state.   Each waiver will ultimately serve the states’ best interest in its’ Medicaid program by giving the states an avenue to design and improve their programs which are unique to that state. With 44 approved across 36 states this could become a solution to the Medicaid challenge. Some states have already implemented work requirements for qualification of Medicaid. Newer provisions that are approved are premiums at 4% of income, a premium surcharge for tobacco usage, and lock outs for failure to report increases in income or failure of renewal.

The objective of Obamacare was to ensure that all Americans are insured.  For many, health insurance holds little value when considering the costs of premiums, deductibles, and co pays resulting in the healthier population viewing it as economically feasible to be without insurance.  Only some states are utilizing the Section 1115 Waiver to add efficiency to Medicaid and better budget. The United States is still very much in a health care crisis. Opposition is from both sides of the parties and partisanship is necessary to effectively remedy.