Not fair!

This time, the President told the truth.

The health care bill passed by Fifth District U.S. Rep. Glenn Thompson and other House Republicans was mean.

So were the fat and skinny bills repealing and replacing the Affordable Care Act (ACA) that Pennsylvania U.S. Sen. Pat Toomey and almost every Republican Senator voted for. Not that the fundamental unfairness of the House bill stopped President Donald Trump from celebrating its passage in the Rose Garden.

Unfairness didn’t stop Thompson from voting for a bill that would have taken coverage from 50,000 of his most vulnerable constituents and given most of the savings to millionaires.

Unfairness didn’t stop Toomey from voting for a last-ditch effort to repeal the ACA that the Congressional Budget Office predicted would drive 16 million Americans from private insurance markets and increase premiums by 20 percent.

Much has been said about the unfairness of the Republicans’ proposed cuts to Medicaid, but trying to undo the ACA’s efforts to level the playing field between individual and employer insurance was really unfair, too.

Getting insurance as a job benefit has many advantages over buying it individually. Employers receive big volume discounts for insuring groups instead of individuals. Employer plans aren’t allowed to discriminate on the basis of age or health status, and they are also full of people young and healthy enough to be working.

By contrast, individual markets struggle to attract enough young, healthy customers to balance the costs of older, sicker people who are eager to buy health insurance. Additionally, the government subsidizes job-based plans through a huge tax-break on premiums paid by employers.

According to the Congressional Research Service, the total annual cost of that subsidy currently exceeds $150 billion, twice the Federal cost of the ACA’s premium tax credits for individual insurance.

The tax-break for employer insurance goes to taxpayers at all income levels, unlike the help for individual buyers under the ACA or proposed by Republicans. For employer insurance, there is no limit on the amount of coverage subsidized, and the greatest savings go to rich taxpayers.

The ACA bent over backwards to make private health insurance work better for individual buyers. It created online marketplaces where individuals could easily price and compare plans, similar to the process for buying health insurance through large employers. It requires insurers to return at least 85 percent of premiums in paid claims.

Most individual buyers now get government help with their premiums, just like workers with job-based plans. And the ACA requires insurers to sweeten the deal for low-income buyers, by reducing deductibles and cost-sharing caps without raising premiums.

Despite Republicans’ strong preference for financing health care through private insurance, they have sabotaged the effort to develop a strong, private alternative to employer insurance.

When the ACA marketplaces opened in 2014, the Republican majority in the House of Representatives refused to appropriate funds to reimburse insurers for required cost-sharing reductions and sued the Secretary of Health and Human Services for making the payments anyway. Now our Republican president is threatening to cut off the monthly payments at any moment and tweeting, “Let Obamacare implode.”

With well over $10 billion in insurer revenues at risk this year and next, the uncertainty is sure to result in higher premiums and fewer choices in 2018.

The Republican Congress also gutted a temporary ACA program that encouraged insurers to keep premiums as low as possible, instead of reserving extra money against the uncertainties of selling in a new market.

In essence, the government agreed to insure the insurers against major losses for three years, with state insurance commissioners making sure that the savings went to consumers.

The biggest uncertainty for insurers was the mix of younger, healthier people and older, sicker people who would buy insurance as a result of the ACA’s market restructuring. Relevant elements included new rules that narrowed or outlawed premium differences by age and health status, premium subsidies, subsidized cost-sharing reductions, and fairly modest penalties enforcing the requirement on individuals to have insurance.

As the first year unfolded, the mix of enrollees was not favorable to insurers.

However, instead of honoring earlier government promises, the Republican Congress stopped payment on all but 13 percent of nearly $3 billion due to insurers under the risk-sharing program. In subsequent years, needless to say, insurers have either substantially raised premiums or left the market.

Polls show that Americans mostly support the ACA’s strong protections for people with pre-existing conditions, but we differ on the fairness of the coverage requirement that penalizes people for being uninsured. There is only one way to eliminate the coverage requirement and fully maintain the protections for pre-existing conditions: Substitute additional government funding for the premiums that some younger, healthier people will no longer pay.

Republicans (including Thompson and Toomey) instead tried to repeal the coverage requirement and pull hundreds of billions of dollars of government funding from individual insurance markets. In doing so, they were going against the consensus on pre-existing conditions and resurrecting disparities between individual and employer insurance. By arbitrarily withholding funds promised to insurers, Republicans have also undermined the good faith needed for any market to function and, consequently, the affordability and availability of individual insurance from the marketplaces.

Pamela Farley Short, Ph.D. is a retired professor of health policy who directed Penn State’s Center for Health Care and Policy Research from 1997 to 2014.


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