No doubt you'll have read the headlines about the Texas led lawsuit challenging the constitutionality of the Affordable Care Act based on the Republican move to lower the individual mandate tax from its current levels to zero in 2019, effectively getting rid of any federal penalty for not having health insurance. Full stop. For consumers, who cares?
Though courts do nutty things, they're usually not cutting edge, they're often a day late and a dollar short when it comes to their pronouncements and those pronouncements are usually pretty narrow, so it's extremely unlikely that anything but the individual mandate will be considered and it likely won't be considered "unconstitutional" but will remain dormant until Democrats get in power and in their budget change the $0 penalty back to a dollar amount. We'll leave that to the legal wranglers.
More frustrating for consumers is another lawsuit about government money, not about either fixing or getting rid of Obamacare. After all, where did that $3 billion in individual mandate fines paid to the IRS go? The government can't tell us. Even the Obamacare facts website doesn't explain where taxpayer individual mandate fine money goes, it's just another taxpayer petty cash pot of money available to be spent by the federal government.
For the partisans arguing about how big a deal the individual mandate lawsuit is, it's not. Insurance companies already have a Republican approved idea for sticking penalties to consumers who don't purchase their product, continuous coverage provisions.
Continuous coverage provisions are where insurance companies penalize individuals who didn't purchase their product in the prior year by way of higher premiums. In some ways this could actually be worse than Obamacare if the partisan showboaters don't address a money and time limit on such continuous coverage penalties.
For the backwards-looking Democrats trying to resurrect the idea that it was only through the individual mandate that insurers could capture those least likely to purchase their product, the young-healthies, no one should take that seriously because when it came to using young people as a tool in kowtowing to insurance company, Obama and Obamacare failed.
FIRST: Young-healthies did NOT take one for the team and enroll in silver-level plans to help fulfill the myth of the single risk pool. They did not think it was way cool that they could be charged more based on the Obamacare ratio of 3:1 rather than 5:1, meaning that the prices charged to old people could only be three times as much as those charged to the young instead of five times the amount charged to the young. Don't take my word for it, look at the facts.
SECOND: After dismal enrollment by the young-healthies in their silver-level plans, healthcare.gov, CMS and insurance companies complained that young people were purchasing the cheaper bronze plans even though they wouldn't get the cost sharing benefits available to lower income Obamacare participants who purchased silver plans. Young people were right…If you're earning money and you're a young-healthy, attractive to insurers because you're less likely to need to use your insurance, why would you pay extra for a possible benefit in the event you needed to use your insurance? It made little sense.
THIRD: The government had a new idea and for subsequent benefits years to strong-arm the young-healthies by raising the price for silver plans less than they raised the price for bronze plans, so now it would seem logical not to pay the bigger increase in the cost of worse plans and maybe the young-healthies would reconsider the silver plan alternative. Nope, it didn't work.
FOURTH: The Obama Administration made a last-ditch effort to compel young-healthies' participation when CMS essentially outlawed the use of short term health insurance plans making individuals liable for the individual mandate tax penalty if they had such health insurance, specifically addressing the use of such plans by young-healthies.
FIFTH: When Hillary Clinton started her failed campaign for President, her idea was to pacify the unhappy insurance companies who even with the individual mandate complained they needed more enrollees by proposing to violate the citizen or legal resident participation rule of Obamacare and change it that anyone, legal or not could buy into Obamacare.
Further, Obama's government deal with insurance companies missed their best bet on getting young-healthies to participate in more expensive plans and that was through their employed parents. Older people purchase more expensive health insurance plans and their families enroll in these same plans when they are added as dependents.
While "allowing" the employee class to cover their grown children's health insurance up to the age of 26 on their own employer-provided health insurance, the stupidity of Obamacare is that it actually discouraged parents from doing so in two ways.
FIRST, for their under-employed children, enrollment in Obamacare bronze plans was likely cheaper than what parents would pay for these grown children as dependents on their more expensive health insurance plans. It would make more sense for these grown children to purchase their own plans and for parents to provide funds for such plans than to carry them on their parents' insurance.
SECOND, the increased costs for copayments, coinsurance, and deductibles in addition to overall premium price increases made these employer plans less attractive and feasible as an alternative for grown children, in the worst cases becoming casualties of the family glitch where dependent coverage became unaffordable to workers, thereby leaving grown children on their own who purchased the cheapest plans they could.
Real Consumer Fix: The primary consumer fix to health insurance costs as a barrier to rather than a means of obtaining needed health care and health services is a governmentally set out of pocket maximum and a dollar for dollar income tax credit for any and all medically-related expenses whether they are for insurance plan covered expenses or not.
CMS gets to determine our out of pocket maximums each year. This is the OOP maximum and sadly has reached levels that can leave most families broke if they're paying for needed medical care and services. Obamacare's OOP rates illustrate the problem, from 2015 self-only coverage limits of $6,600, family coverage limits of $13,200 to self-only coverage of $7,350 and family coverage of $14,700 in 2018.
Remember Obama's deal with big pharma to leave them free from regulation and that prices have gone up 10X the rate of inflation AND that insurance plan formularies are excluding more and more of these potentially life-preserving and life-saving drugs making them ineligible as part of your OOP, and you can see the problem. Insurance companies should not be able to partner with government to exploit individuals' healthcare needs by ignoring the costs of these needs and disallowing them from contributing towards an individual or family OOP. Similarly, deductibles, copayments and coinsurance costs would all contribute (as they often do) to the OOP.
The biggest reform needed is to bring the OOP down to a percentage, just like costs of health insurance, not exceeding X percent of a household's income, PERIOD. The second step is to prohibit the exclusion from OOP calculation of any needed medical service or product, PERIOD. This would protect consumers in two ways, first allowing them for the first time ever to calculate the potential costs of healthcare per year and second would incentivize insurers to stop excluding from coverage more expensive items and treatment or people with pre-existing conditions.
The individual mandate is simply political partisan showboating. Not a single one of the public officials who today are reaping the benefits of taxpayer funded health insurance and superior benefits off our backs could care less about consumers. We have an opportunity to learn from our mistakes and read through the doubletalk and we shouldn't miss it.
