By Paul Demko
POLITICO, March 6, 2018
The White House is seeking a package of conservative policy concessions — some of which are certain to antagonize Democrats — in return for backing a legislative package bolstering Obamacare markets, according to a document obtained by POLITICO.
The source of the document provided to POLITICO isn’t identified and it isn’t dated. The White House declined to comment on the document but didn’t question its authenticity. A spokesperson for HHS said the department does not comment on leaked documents.
Two health policy experts who have been in contact with White House officials indicated that the document is consistent with ideas the administration has discussed for creating more stability and flexibility in the insurance markets.
“It’s legit,” said one former White House policy official.
Unmarked memo purportedly from the White House
Obamacare Relief Provisions Congress Should Pursue
Obamacare has led to skyrocketing premiums and declining choices for American families. Middle-class families, in particular, have seen their premiums and deductibles soar year after year as a result of the law. Although congressional efforts to provide taxpayer money to prop up the exchanges is understandable, any such efforts must also provide relief to middle-class families harmed by the law and protect life. In order to support such efforts, the administration believes these three policies to provide greater choice and control for middle-class families must be included:
* Increase consumer options of more affordable, flexible insurance coverage by clarifying that issuers selling short-term, limited-duration insurance may offer renewals of that coverage to individuals without those individuals going through health underwriting.
* Increase control for middle-class families over their healthcare dollars by expanding Americans’ access to health savings accounts (HSAs). This will enable middle-class families to save pre-tax dollars for their healthcare expenses and help put them back in control of their healthcare. This can be accomplished by raising HSA contribution limits and allowing HSAs to be integrated with a broader number of plans.
* Modify age-rating requirements to permit premium variation of up to 5:1 in the individual and small group markets.
In addition to these three policies, any efforts to provide taxpayer money to stabilize the exchanges must be properly designed so that public dollars do the most good and that ensures all federal dollars are life-protected. The president also supports congressional efforts to fund and life-protect Obamacare’s cost-sharing reduction (CSR) payments after 2018. This would lower premiums for those who purchase their coverage on the exchanges as well as decrease federal spending due to a reduction in the premium tax credit amounts.
By Don McCanne, M.D.
This brief memo from the White House seems to be authentic. It lists three policies that the administration says must be included as part of “Obamacare relief provisions” that Congress should pursue.
Perhaps the most alarming must-include policy is making short-term, limited-duration junk insurance renewable without further health underwriting. Since these policies will be almost worthless as far as the benefits they will provide, they will have low premiums and thus be affordable for those who otherwise could not pay for ACA-compliant plans. They may become popular with the perception that these plans would be better than nothing at all, though that is questionable. And making them renewable means that they are no longer limited-duration plans, and thus may become the standard for those who are not eligible for subsidized plans. An increase in personal bankruptcies for those with greater health care needs would be inevitable.
Another must-include policy is expanding “access” to health savings accounts (HSAs), enabling families to “save” pre-tax dollars for their health care expenses. The main difference between an HSA and any other savings account is the tax benefit which is highly regressive since it provides a tax expenditure that is proportional to income. Those who pay no taxes receive no benefit whereas the wealthy receive the most. Also most families with only modest incomes are not able to fund their HSAs. Having access to an empty HSA is of no value. So HSAs really do work for the healthy and wealthy, but not for many of the rest of us who don’t have the funds in the first place.
The third must-include policy is to jack up premiums for older individuals in the individual and small group markets. This may provide some premium relief for the young invincibles, but many older individuals not yet eligible for Medicare will find it very difficult if not impossible to pay premiums that are five times what younger individuals would be paying. This defeats the fundamental insurance function of arranging a transfer from the younger and healthier to the older and more infirm.
One other item in this memo is the recommendation to fund ACA cost-sharing reduction (CSR) payments after 2018. This is not as altruistic as it seems. The CSR payments would reduce the costs to the insurers, allowing them to reduce the premiums thus reducing premium subsidies that the government would be paying. That would help to reduce the federal budget deficit – an important PR move in an election year and the primary reason for this recommendation. But wouldn’t the CSR payments offset that reduction? Simple. Though it is not stated in this particular memo, they have decided to move the CSR payments off-budget, just like they pay for wars.
And about the code language of “life-protected” federal dollars…
Again, the most important item in this memo is that they want to make cheap junk insurance the new standard in the private insurance market – by making it renewable. That would destroy the private insurance markets without providing any other option. The pain inflicted might increase support for a single payer Medicare for all program, but tolerating that much physical and financial suffering is a terrible way to drive the political agenda that we need. Let’s just go to single payer now before more harm is done.
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