Costs and Benefits Transcript
Hadley: Hello, I’m Hadley Heath Manning with the Independent Women’s Voice. I’m here with Beverly Gossage, an expert on the Affordable Care Act, or Obamacare, and a senior fellow with Independent Women’s Voice. When it comes to repealing Obamacare, there are tough questions being asked that deserve answers. So today, I’m going to ask some of the toughest questions, and Beverly will answer.
This series of questions is about costs and insurance benefits.
Question 1 (Hadley): I’m afraid I couldn’t afford the coverage I’m getting today in my Obamacare exchange without the financial help. What will happen to me if Obamacare is repealed?
Answer (Beverly): Well you know, you’re not alone. Rates have skyrocketed. Before the ACA, most people had very low priced options from which to choose. So here’s what happened with the ACA:
The federal government dictated the type of policy that everyone had, they passed regulations that favored the large carriers so many counties around the country have just one carrier option, and the ACA took away any healthy discount that people were receiving. So yes, we saw the premiums go up as much as 400% in many states and it’s harder to find a doctor in your network. Now you are one of the lucky ones who are receiving tax paid subsidies and that helps you with your premiums as you said. But you’re right, you couldn’t afford it without the subsidy, most people can’t. You mentioned how those feel who didn’t qualify for a subsidy, like a 25-year old couple with two small children paying over $1,000 a month, it’s just impossible. But that’s what the rates have gone up to now.
But the problem is everyone is still mandated to buy a policy or pay a fine. But we do have good news for you, and that is those not getting a subsidy as well as those who are, with repeal, those federal regulations that caused those rates to be sky high will be removed and those folks will have more low-cost options. So that leaves your state regulations intact, competition will return to your state, carriers will reenter the private market, you’ll have a choice of plans with benefits you want and not those you don’t want.
All states are different, but you should see rates drop considerably for everyone in the private market. I’m confident you’ll find a plan that fits your budget without a subsidy. And I’m sure you would agree that not having to navigate a federal website not wander through a maze of bureaucratic red tape just to add a family member or change your address, and not waiting for open enrollment to change a plan will be a welcome change. We believe you should be able to shop for the plan you prefer and have the freedom to change plans as often as you’d like, just as you do with auto insurance.
Question 2 (Hadley): I’ve heard Republicans want people to pay for more health care out of pocket. Is this true? Is that what it means to use a health savings account?
Answer (Beverly): Republicans just want you to have more control over your decisions. If you want to pay more for your insurance premiums for say a gold plan so that you can pay less when you go to a doctor, or get a prescription or have a procedure, that’s up to you. But many have decided to give the insurance company a smaller premium and are willing to take on more risk by paying a little bit more towards their claims.
So that second option encourages people to live a healthier lifestyle. But under the ACA, the rates are so high that most people are doing little saving these days, but using their HSA are a pass through to pay their claims. At least they’re getting a tax deduction for those expenses, but the HSA was designed to pair with low premium policies so of course that first step is to help people save in their HSA again, and that first step is to repeal the HSA so that everyone can have low priced options.
HSA’s were actually a bipartisan legislation and they were created to encourage Americans to be healthier consumers. The truth is most people are actually healthy and they spend little on care. The AMA reported that 75% of Americans pay less than $500 per year on their health care and half of them spent nothing. The HSA lets you save up for catastrophic events and pay as you go for smaller claims with your tax-deductible dollars.
With repeal, we want to bring back competition, low priced options, broader provider networks, and we’re looking at reforming HSAs which could allow larger contributions, so that you can pay for more medical expenses from it, like gym memberships, exercise equipment, and other medically qualified expenses that you spend every day. And permit more people to have them by relaxing a rule on the type of health plans to pair with the HSA, including the sharing ministry plans. Some reforms will even allow you to pay your private premium from your HSA to equalize the tax treatment for those buying who are buying private plans like those who get a tax exemption, if they buy it, from their employer.
Question 3 (Hadley): If Obamacare is repealed, will plans have lifetime caps?
Answer (Beverly): Well you know we’ve heard proponents speak often about lifetime caps so let’s just clarify that. Did you know that before the ACA some carriers raised their premiums a little and offered unlimited benefits and lifetime benefits? You know how competition works, if one carrier does something that seems to be popular, their competitors will follow suit.
Other carriers chose to keep their rates lower and maybe offer a $5 million lifetime. Well that’s because whenever an employer changes plans, the lifetime limit resets.
However, we feel that you should be able to make that decision. With repeal, you can expect carriers to likely keep that popular unlimited lifetime benefit, and some may offer a lower lifetime cap, but that would be your choice.
Question 4 (Hadley): I’m concerned that if Obamacare is repealed, insurance plans will cover fewer services. What will happen without Obamacare’s consumer protections?
Answer (Beverly): The term consumer protections can often equal higher prices for some benefits that people don’t really want. We don’t believe that mandating that everyone have the same insurance plan is a good idea. Carriers have always offered very comprehensive plans as an option and we expect they will continue to do so as those have been popular and have been in demand by consumers.
But carriers should be free to offer plans that consumers want, and they should be free to pick the plan designs and benefits they want and that will fit into their budget
With repeal, we will open up competition for small carriers to get back into the private market to offer lots of plan choices for you, including those that have greater benefits that you may really want.