Short-Term Health Beats Individual Major Medical: Hearing Witness

Chris Pope (Credit: House Ways and Means)

Affordable Care Act (ACA) benefits and pricing rules may make individual major medical coverage a good safety net for sick people, but those rules make individual coverage a terrible product for healthy uninsured people who fail to qualify for huge subsidies.

Chris Pope, a senior fellow at the Manhattan Institute, gave that assessment Tuesday, during a hearing th House Ways and Means oversight subcommittee organized to review how the administration of President Donald Trump has been administered ACA health coverage enrollment programs.

Organizers gave the hearing the title "Maximizing Health Coverage Enrollment Amidst Administration Sabotage."

Resources

Links to House Ways and Means hearing resources, including a video recording, are available here.
An article about the 2021 ACA individual major medical market is available here.

Rep. Bill Pascrell, D-N.J., the oversight subcommittee chair, began the hearing by accusing the Trump administration of continuing Republicans' efforts to destroy the ACA, which is a package created by the enactment of two separate packages of legislation in 2010.

"Republican leaders have treated destruction of the affordable care act like Captain Ahab treated the white whale," Pascrell said at the hearing, which was streamed live on the web. "Since 2011, the other side has voted more than 70 times to eliminate the ACA."

In recent years, the Trump administration has hurt the ACA by trying to block ACA subsidy programs, cutting marketing support funding, and promoting "junk plans," or alternative products, that could lure away younger, healthier enrollees, without providing those enrollees against adequate protection against costs related to pregnancy, health needs and other serious health problems, Pascrell said.

Republicans are sabotaging the ACA at a time when the COVID-19 pandemic is leaving many people with what appear to be serious, chronic pre-existing conditions.

Andrew Slavitt, a former UnitedHealth Group executive, and a former acting head of the Centers for Medicare and Medicaid Services (CMS), which is the federal agency in charge of ACA commercial health insurance rules and programs, said one problem is that Republicans say they "support protections for pre-existing conditions" without supporting the kinds of rules and programs that make offering affordable coverage to people with serious health problems, on a guaranteed issue basis, feasible.

Slavitt acknowledged that Trump has issued an executive order saying that the government wants people with pre-existing conditions to have access to coverage.

"Unfortunately, if any American was to print out an executive order from the president of the United States saying that they would have their their pre-existing condition covered, and brought it to an insurance company, the insurance company would laugh at them, because an executive order like that does not have the power of law," Slavitt said.

The Bills

Pope said in his written testimony that he believes that the ACA is now such a part of the U.S. health policy that the country should focus mainly on "fixing insurance markets in ways that transcend uncritical support or indiscriminate opposition to the ACA."

The ACA subsidy system has made ACA coverage an important safety net for low-income people and people with health programs, and any alternative proposals should continue to provide safety net protection, Pope said.

But Pope said, in the written testimony and at the hearing, that policymakers have to acknowledge that the individual major medical policies are a bad value for healthy people who have to pay full price for the coverage.

"They're far too expensive for what they are," Pope said.

In many cases, Pope said, a family of four that qualifies for no premium subsidies will have to go to providers in a limited provider network, and pay a total of about $22,000 in premiums in premiums and deductibles before getting coverage for anything other than routine preventive care.

Because of a provision in the ACA and federal regulatory decisions, short-term health insurance falls outside of the scope of the ACA rules that apply to major medical insurance.

State insurance regulators set the benefits and pricing rules for short-term health insurance policies, and the state rules vary widely from state to state.

Consumers who buy some of the richer short-term health insurance policies can get better benefits for the same price, with better provider networks and higher enrollee satisfaction ratings, Pope said.

In some cases, Pope said, when short-term health insurance policy benefits are inferior, that's because of rules regulators have imposed in an effort to keep short-term health insurance from competing with major medical coverage.

Pope gave the federal three-year limit on people holding the same short-term health insurance arrangement as an example of a regulatory constraint that makes short-term health insurance less friendly than it could be to insureds with health problems.

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