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OPINION: ACA repeal without replacement will create chaos

January 12th 8:10 pm | Dermot Cole Print this article   Email this article  

Alaska U.S. Sen. Lisa Murkowski on "Obamacare": "I believe the legislation has to be repealed. It has to be replaced with sensible alternatives that are widely supported."

A lot has changed since Murkowski delivered that speech on June 23, 2010. With the election of Donald Trump, the long-standing repeal campaign is nearing an end.

Murkowski, Alaska Sen. Dan Sullivan, Rep. Don Young and other Republicans in Congress, know their votes to get rid of the Affordable Care Act will no longer be rendered meaningless by a presidential veto.

That puts the focus on the replacement plan, the one with the sensible alternatives that are widely supported. The one that doesn't exist.

Yes, there are vague pledges even the architects of "Obamacare" would find hard to dispute.

"My focus with regard to repeal and replace would be on the principle of freedom," Sullivan said in 2014 during his campaign for the U.S. Senate. "Freedom meaning that the federal government should not be the decision maker; the families and the doctor should be."

Discussions about freedom obscure the technical nature of the trade-offs in health care policy that create winners and losers. Whatever "freedom" is allowed for consumers will likely be paid for by very sick people.

The Alaska delegation championed a freedom-based plan last year to allow insurance companies to sell cheaper coverage lacking the "essential health benefits package" required under ACA.

Doing away with the minimum standards would have applied only to states like Alaska where a single company, Premera, is providing policies on the individual market.

Under the bill, which didn't go anywhere, companies could have sold policies without coverage for ambulatory patient services, emergency services, hospitalization, maternity and newborn care, mental health and substance abuse disorder services, prescription drugs, rehabilitative services and devices, laboratory services, preventive and wellness services and chronic disease management and pediatric services, including oral and vision care.

Young referred to the minimum standards as "some of the most unreasonable requirements of this law" and Alaskans should be free to have options and flexibility.

The freedom to buy cheap insurance that doesn't cover much is great, as long as you are healthy and don't need it. If you have a catastrophe, your perspective will change.

All these years have passed with "repeal and replace" on the lips of every Republican politician only to find that some want to celebrate repeal now, and delay replacement until after the next election.

Many Republicans, including Trump, who promises "something terrific" for a health care plan, say they want to keep one of the most expensive parts of "Obamacare" — the rule that prevents companies from denying coverage to people who have had serious illnesses.

"I do not support compulsory health insurance but do believe that individuals with pre-existing conditions should receive care. That is why I continue to support efforts for a full repeal and replace," Murkowski said in a speech on May 19, 2016.

So let's get rid of the mandate to buy insurance and the subsidies that help more people afford coverage. Without those elements, the system will get more out of balance because the customer base will contain larger numbers of people in poor health.

The health care system is beset by complex and powerful competing interests, which is why miracle cures are hard to find.

It will be tough to enact an ACA replacement plan that covers pre-existing conditions in a meaningful way. Congress could get around that by bringing back annual and lifetime limits, reducing the exposure of the insurance companies and increasing the threat of financial ruin for the sick.

I am reminded of the jaw-dropping statistics about the sick people in Alaska now with insurance who will never be profitable customers.

They were able to buy insurance in the private market through "Obamacare," and for some of them, bankruptcy and Medicaid coverage would have been the only alternative.

A select group of ailing Alaskans — about 1,300 insurance customers — filed $78.5 million in health insurance expense claims in 2014-2015, while paying $8.4 million in premiums, according to a state report.

In 2015, Premera said about 40 percent of its Alaska claims in the first quarter of the year came from 37 customers.

Losses of that magnitude for people suffering from cancer, cerebral palsy, end-stage kidney disease, multiple sclerosis and about two dozen other diseases wrecked the business model. Tens of thousands of additional healthy people would have to buy insurance to make the math work, not just the 25,000 or so who bought that kind of coverage.

To slow down this looming disaster, the state Legislature provided a subsidy last year of $55 million, drawing from fees paid on all insurance policies in Alaska to create the Alaska Reinsurance Program. It will cover the high costs associated with 33 serious illnesses and conditions on claims submitted to Premera.

"There is not a special category for these individuals and they may never know that they are considered a high-cost individual and that their claim(s) are being reinsured by the Alaska Reinsurance Program," said Lori Wing-Heier, the state insurance director.

This is not a long-term solution for the state, the insurance company or the people struggling to stay alive.

The Republican Party could have spent the last six years trying to fix the flaws in "Obamacare." Instead, it opted for a slogan, with no replacement in sight.

Columnist Dermot Cole can be reached at dermot@alaskadispatch.com [mailto:dermot@alaskadispatch.com].

The views expressed here are the writer's and are not necessarily endorsed by Alaska Media, which welcomes a broad range of viewpoints. To submit a piece for consideration, email editor@reportalaska.com. [mailto:editor@reportalaska.com]

 


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