Affordable Care Act, Benefits, Flexible Spending Accounts (FSA's), Health Care, Health Insurance, Uncategorized

Scoring the Impact & Compromise for Passage

With a vote expected this week on the Republican proposal to end many Obamacare provisions, detractors have enjoyed great press about the “ills” of change. The most persuasive to leave well enough alone came surprisingly from the CBO (Congressional Budget Office) when they scored the bill. Headlines about 24 million Americans losing coverage over the next decade sounds a dire alarm.

For those who read the details though, assumptions by this non partisan group of futurists starts with 14 million dropping current coverage in 2018 because the legal mandate to be insured ends. Since there are 10 million now insured through the MarketPlace, the assumptions include Americans also dropping their Medicaid coverage. Since Medicaid requires no premium payment responsibility, the forecast for 2018 is puzzling.

While worrisome if the CBO projections come true, their track record forecasting health care change has missed the mark in the recent past as follows:

A. The CBO forecast that 26 million Americans would have health insurance through the MarketPlace by now, and the number is 10 million.
B. The CBO forecast Medicare Part D, which provides prescription coverage for senior citizens, to be 40% higher than the actual cost.

These misses show how very hard it is using assumptions to project value, cost, acceptance and rejection for insurance decisions and usage.

As mentioned in my last posting, the greatest challenge to assuage enough politicians to agree to support the bill referred to a AHCA, comes down to Medicaid funding. Another hurdle is that insurance will become more costly for seniors. Since available tax credits will be tied to age, this is likely not as major a cause for concern as postulated. And, returning to the pre-Obamacare five tier rating system will make health insurance lower in cost for younger Americans who incur fewer medical expenses.

Besides eliminating Obamacare taxes and bureaucratic obligations imposed on American businesses, the AHCA is trying to accomplish a radical new funding approach for Medicaid. Per capita block grants will place more cost pressure on states than the current percentage of expense sharing approach. Since the politicians are elected by the citizens in their state, it is not a surprise that some believe it is critical to get it “right” now. Reality is that adequate funding will continue to be a moving target, and will vary state to state.

With adequate compromise this week, expect the House of Representatives to approve the AHCA bill. It is then up to the Senate.

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