Just Planning to Dismantle the ACA Is Dangerous in Itself

From the Women’s March on Washington, my favorite sign (seen in a photo on the internet): “Ugh. Where do I even begin?”

I decided that I need to fight.  I don’t want my children to wonder some day why I did nothing.  I have some talent for writing, so I’m going to start doing it.

So much to write about.  Each day brings new shocks.  I’ll begin with Trump’s apparently modest first move against the Affordable Care Act.

President Trump (and you know, the validity of that phrase shows that we really do live in a world of “alternative facts”) has recently issued a fairly vague executive order asking government agencies, especially the IRS and Dept. of HHS to help people harmed by the Affordable Care Act.  One possible consequence of this order is that people may be given waivers from the requirement to buy health insurance.  That particular policy has not yet begun, and it hasn’t even been explicitly spelled out, but it is a very bad idea.  In fact, even hinting at it may have catastrophic results.

OK, let’s see what happens if such a policy is enacted and many people are given waivers.  There will be two malign results.

But first: how insurance works.  Before we get to health insurance, let’s do fire insurance.  I pay for fire insurance on my house.  Besides buying it because it’s required by the credit union that holds my mortgage, I buy it because I’m not an idiot.  I don’t want my house to burn down, and I don’t expect it to burn down, but I acknowledge that there’s always a chance, and if it were to happen, the loss would be immeasurable.  (I really like my house.)  But I’d get a payment from the insurer to pay off the remainder of my mortgage and help me and my family rebuild or buy a new place.  In the meantime, the money I pay the insurer goes into a pool to help out those families that do have the bad luck of home fires.  The money is not wasted.  It goes to people who need it, and if my family needs it, it will be there for us, too.  I hope we never need it, of course, but it would be foolish not to join into the insurance pool.  Since all the other home owners pay into it, too, it’s affordable.  If the only people paying into it were the ones standing on the sidewalk watching their roofs ablaze, it would be impossibly expensive.  To say, “My house isn’t burning; I don’t need insurance,” would be stupid.  These things can happen to any of us.  We’re all in this together.

Health insurance–same thing.  Say all of us who enter the pool are healthy (as those of us who enter the fire insurance pool all have non-flaming houses when we enter), we’re each going to hope to remain healthy (Salud! to all of you!), but it’s pretty darn likely that somebody will at some point get pneumonia or a broken foot.  Somebody’s going to get pregnant.  Mental illness happens.  In fact, each of us is a lot more likely to need health care at some point than to live in a burning house.  Some of us may have small health care bills (a cut hand that needs some stitches), and some of us may need a kidney transplant.  Some will have a severe incident that can be treated, paid off, and brushed into the past (a burst appendix), and some will have long term or lifelong chronic conditions (diabetes).  These things could happen to any of us.  We’re all in this together.

OK, back to the threat of waivers.

1.)   Say a lot of healthy people ask for waivers on the requirement to buy health insurance–the young and stupid who assume they do not need insurance (“My house isn’t burning”)–and a Trumpist HHS Dept., following the boss’s clear wishes, is generous in granting waivers to all who ask.  Being younger, they are less likely (not exempt, mind you, just less likely) to need medical care.  The older, sicker, less stupid will still want to buy insurance (the ones who live in houses more likely to catch fire).  Fewer people will be paying into the fund, and the ones left will be the ones most likely to need it.  Insurers will, therefore, have less money in them to pay for illnesses and injuries to people in those funds.  As a result, insurers will have to raise rates, probably very high indeed, or else they will not be able to pay for the health care of the insured.  Insurance rates will climb disastrously high, and people who need insurance will not be able to afford it.

2.) Inevitably, people who get the waiver will sometimes become ill or injured–sometimes in ways that call for quite expensive treatment–and without insurance, they will not be able to pay for their care.  If hospitals and other medical providers are not paid for the care, those medical providers will have to get the money somewhere, and raising rates for their paying patients (generally the rest of us with insurance) will be the most probable way to recoup that revenue.  That means that medical inflation and insurance rates will zoom higher than ever, making insurance and medical care more expensive and less attainable for everyone.  The death spiral opponents of the Affordable Care Act warned about will become real rather than (as it has worked out till now) imaginary.

All that is merely possible right now, and the executive order does not necessarily indicate that an expansion of waivers will happen.  But the possibility, the opening toward it, the clear intention of the President may itself cause some of these problems even before such an ill-advised policy is implemented.

Insurers, like any business or institution, need to plan for next year.  If last year’s policy carries through this year on into next year, then it will be comparatively easy to make predictions of costs based on consistent trends.  However, if policy is disrupted, then it will not be so clear what next year will be like.  There’s a possibility that sane bureaucrats in HHS will be stingy in granting waivers; on the other hand, pressure from the top may make them cruelly generous toward all and sundry who wish to court financial disaster.

Unsure of how the Affordable Care Act will be administered next year, some insurers may begin to pull out.  Though they may be able to predict roughly how much they will have to pay out for medical expenses next year, not knowing what the administration will do next year, they will not be able to predict how much they will be taking in in premiums.  Unsure that there will, next year, be a predictable and viable group of contributors to the pool, insurers may decide they do not want to enter an uncertain market that may well bring them great losses.  Withdrawing from the market will reduce competition and, thus, raise prices.  Or insurers may stay in the market, but fearing the implementation of a broad waiver policy, they may raise their rates to cover the costs of a smaller pool of older and less healthy contributors.  This uncertainty about administration policy, therefore, may lead to the collapse of insurance market even without an explicitly worked out policy.

My point is that the President’s executive order, even so vaguely worded that we’re not sure what its results will be, is likely to cause harm to the nation’s medical and financial health.

Stand against Trump.  Contact your representatives and senators.  You or someone in your family may be one of the people Trump wants to kill.

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