By: Paul Gionfriddo, MHA president and CEO
To contain costs, President-Elect Donald Trump has suggested replacing Obamacare with a package of benefits that might include:
- Permitting Insurance to be sold across state lines
- Retention of the mandate covering pre-existing conditions
- Allowing young people to remain on parents’ insurance
- Creating high-risk pools to provide insurance to people with chronic diseases
- Using Health Savings Accounts (HSAs) as an alternative to tax credits
- Expanding the use of high-deductible plans to lower premium costs
Several of the provisions could affect people with mental health concerns more than others. Let’s consider some of the challenges the President-Elect and Congress will face as they craft these – and other – possible changes to the Affordable Care Act (ACA).
Covering Pre-Existing Conditions
Trump has been clear that he would retain this provision. It is a lifeline for people with all chronic diseases and conditions. However, these conditions are often expensive to cover. Unless you mix them in a plan that captures healthier people, too, costs will rise no matter what else you do.
Allowing Children to Remain on Parents’ Insurance Until Age 26
Trump also favors this. It’s very important to families, because so many serious mental health concerns begin during childhood. Here’s the challenge. What is life-saving for young people with serious health conditions is a provision that also keeps healthy, younger people out of the exchanges.That has helped to drive up the costs of the plans in the exchanges. If you can’t figure out how to get health young people into the exchanges, you make insurance more expensive for everyone else.
Setting Up High-Risk Pools
Trump has also suggested that new high-risk pools could be the answer for people with chronic diseases who need insurance. We had a high-risk pool in Connecticut when I was a state legislator in the 1970s and 1980s. It was expensive, and the only people who chose to be in it were the ones who absolutely knew that the insurance would pay out more than the premiums cost. Unless these risk pools are heavily subsidized and include some incentive for healthier people to join them, they probably won’t work.
Expanding the Use of Health Savings Accounts (HSAs) Coupled with High-Deductible Plans
Trump has suggested coupling HSAs with the use of more high-deductible plans to lower costs. In “exchange speak,” think more bronze plans. Here’s the way this might work.
Assume that a single male with high healthcare costs who makes $50,000 per year buys a plan with a $10,000 deductible and pays $250 per month for the insurance. To use an HSA to cover those costs, he would deposit $13,000 into his HSA to cover the premium and the deductible. That would reduce his taxable income to $37,000. If he is in the 15% tax bracket, at the end of the year he would get back 15% of the $13,000 he deposited into his HSA, or $1,950.
Spending one-quarter of his income on health care to get back $1,950 would not make him feel too good about that high-deductible plan, and he would probably go uninsured.
Rolling Back Medicaid Expansion and Converting Medicaid to a Block Grant
Any debate about ACA change will include at least some discussion about rolling back the Medicaid expansion. This expansion has been a huge benefit to adults with serious mental illnesses.
Most states expanded Medicaid, including Michigan, Pennsylvania, Ohio, Iowa, and Arizona. The federal government is covering more than 90 percent of that cost. Trump has said that he does not want to roll back entitlements. Neither would the voters in these states.
Trump has also suggested converting Medicaid to a block grant.This could be done, because the Medicaid program is in reality fifty different state programs. But the question would boil down to this. Would the federal government provide the full share of Medicaid payments to states in the block grant, or withhold a few percent, as it did with past block grants? Withholding even 5 percent of $550+ billion Medicaid dollars would have an enormous impact on state budgets and people in need.
The Challenge Ahead
The goal of ACA was to get more people insured, using the health care financing system that was already in place.
The challenge ahead will be to keep them insured if ACA is changed. Probably the best way to do this – Medicare for all – won’t happen anytime soon. But if the new President and Congress don’t walk a tightrope in making their changes, single-payer may come along a whole lot sooner than anyone imagines.