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Marshall pens national op-ed on insuring those with preexisting conditions
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Having just left private practice as an OB/GYN, and fresh off the campaign trail, I have talked to thousands of people about healthcare issues. For more-than 25 years, the most common concern I’ve heard, and have tried to help solve, is from folks who have a preexisting health condition, and must get their health insurance outside of an employer. These folks are worried about losing the coverage they have, if they have any, and fear they won’t be able to replace it in the future.
As we in Congress work to deliver true 21st-century healthcare to the American people, I wanted to address the issue of coverage for folks with preexisting conditions; also called “guaranteed issue,” which ensures that all Americans have access to high-quality, affordable healthcare. Many of us in Congress, and our President, have agreed we must ensure this coverage, and have accepted it as our challenge.
The Affordable Care Act (Obamacare) was passed in 2010 with hopes of addressing this very issue. Unfortunately, individual health insurance policies under Obamacare can have deductibles as high as $14,000 for a family. To many of us in the medical field, it seems that more people than ever do not have meaningful health insurance. Here we are in 2017 and although people technically have access to health insurance, many cannot afford to get care because of their premium, and out-of-pocket expenses. This cuts to the very heart and soul of the current debate on what true healthcare reform looks like.
What I propose today, after having listened to and studied many ideas, are “value pools.”
What are value pools? Value pools are insurance programs set up to focus specifically on patients with pre-existing conditions. To most patients, their insurance plan would look very much like the insurance most of us were used to seeing before Obamacare. Some basic federal laws (or rules from HHS) would provide guidelines and minimum standards, but general design and administration must be at the state level.
Who would get their health insurance from a value pool? Though there are several ways to determine eligibility for these pools, we could start with having one of 33 diagnoses (as currently used by the innovative Alaska reinsurance program) and/or a letter of denial from one or more existing insurance carriers.
Why value pools? By putting folks with pre-existing conditions into a separate “like-risk” insurance group known as a value pool, they will be more likely to get the type of benefits and care they need. I believe these most-valued patients could especially benefit from a “concierge physician” who is dedicated to directing them through the confusing maze of health care. This concierge can bring each patient true value.
By separately structuring and funding value pools for patients with preexisting conditions, health insurance will be much more affordable for those without preexisting conditions. Those without preexisting conditions will once again buy from conventional commercial insurance markets. Costs will be more predictable, and we know insurance actuaries thrive on predictability.
How would value pools be funded? The patient would be responsible for paying a premium equal to the average cost of coverage in their respective commercial market. The remainder would be funded via state funds, fees assessed on private insurance carriers in the state, and federal funds.
Interestingly, 35 states have experience with similar pools. Prior to the coverage mandate, the average annual cost for the 226,000 patients enrolled in these high-risk pools was about $12,000 (Source: NASCHIP Comprehensive Health Insurance for High-Risk Individuals: A State-by-State Analysis). Also of note, the federal government is spending nearly $11,000 per-patient annually for Medicare patients (Source: CMS National Health Expenditure Data).
As we’ve listened to and visited with our state governors and state insurance commissioners, the most common themes they ask for are “flexibility and certainty.” It is Congress‘ job to give them just that.
As a business person, I look at this problem and ask how much money we, the hard-working taxpayers of this country (via the federal government) can afford to make these changes. The state will then dial the many alternatives up or down to keep within their budgets, and to spend the money as judiciously as possible.
As an example, around 12 million people are on an exchange policy now. With free market reforms and the deregulation of medicine, many (most likely over 90 percent) will move back to the free market. The total insurance premium for the remaining value group, which would be split between the patient, private insurance, the state and federal government, should be under $15,000 per year, and hopefully closer to $11-12,000 as time goes on. In this model, the deductible would be around $1,000, and the plan would also include a tax credit for the premium.
Of course, these valued patients will also benefit from other free market reforms such as expanded HSAs, increased transparency, and policies that encourage innovation.
Finally, I propose a federally funded “reinsurance” program, much like many of us use in the private sector, to provide an umbrella for the state-based Value Pools.
It’s not complicated. In fact, it is simple. But it’s not easy.
Unlimited free healthcare is not, and won’t be an option. And it is dishonest and harmful to tell hard-working Americans otherwise.
There will be pains and there will be mistakes, but I believe we can keep working to ensure all Americans, regardless of their health challenges, have the opportunity to achieve this goal of quality, affordable healthcare.
Roger Marshall, an obstetrician, is a Republican U.S. representative from Kansas.