Chomping on Obamacare 

 “In the meantime, pending such repeal, it is imperative for the executive branch to ensure that the law is being efficiently implemented, take all actions consistent with the law to minimize the unwarranted economic and regulatory burden of the act, and prepare to afford the states more flexibility and control to create a more free and open healthcare market,”  Trump Executive Order 1-20-17

What this is saying is that the new administration is taking the same strategy as the previous one (sort of). Simply put, they will not enforce the letter of the law to the extent it doesn’t fit the moment or political goals. 

The Obama administration simply did not implement the long-term care provision of ACA fought so hard for by Ted Kennedy and was correct in doing so. It delayed the effective date of the employer mandate and the so-called Cadillac tax on high cost plans and it developed a number of exceptions to the coverage mandate. It’s goal of course was to shore up the the ACA. 

Trump on the other hand has a different goal in mind. What has been done so far is largely symbolic and designed to undermine as much as possible and slow down further implementation. 

Here is my prediction. Obamacare will be repealed in name only; not in substance. Some mandates will go, perhaps some taxes and other provisions will be watered down, but the basic structure will remain. Why? Because short of single-payer of some type there is no viable alternative to retain the expanded coverage let alone increase coverage. Plus like it or not, any Republican alternative so far conceived will shift more costs to individuals and will not lower the cost of health care. 

There is one fundamental flaw in our current approach and in the perception of many Americans; choice‼

Offering multiple plans in any context and then allowing annual changes without restriction is simply asking for problems and higher costs. Some people will even make very poor economic choices because of the unfounded fear of medical bills leading to a net loss via unnecessarily higher premiums. 

Individuals will enroll in plans they believe reflect their health care needs trying to maximize value through higher coverage or lower premiums. Insurance cannot work that way, it needs to spread risk in order to reach a reasonable premium structure. Americans and some politicians don’t seem to understand that. 

You cannot establish an affordable insurance structure, especially in the highly emotional area of health care, and at the same time give everyone just what they want and perceive they need.  And unlike other types of insurance,  the uninsured who do need health care become a direct burden on the health care system and on society. 


6 replies »

  1. One solution is changing the length of time a person must agree to be covered under any particular plan. There is nothing sacrosanct about the period of 365 days. I’d start with a five year period, with the provision that you could transfer only by paying a steep “transfer premium” if done before the five year period expires.


  2. I believe you have worked in the weeds of the insurance industry for many years. I am sure you understand the complexity and downfalls of different strategies. President Trump appears to be open to all legitimate, well presented theories. A call to the White House to suggest a meeting with him and perhaps others you know to share your knowledge might be accepted. This is a new kind of president who appreciates all points of view.
    Instead of whining and complaining get in the game. Take action that may help all of America


  3. Mr. Quinn, I assume that in your working life as a purchaser of health care plans for your company (correct me if I’m wrong on that assumption which I have gathered from your writings) you were happy to have choices in what plans were available for your company to purchase. Can you explain the difference between your position as a purchaser of insurance and an individual doing the same?


    • Yes, I designed and managed health plans for many years, but I never bought insurance. Like the vast majority of large employers we were self-insured so we designed the plans as we wanted them and negotiated them with our unions. That included several choices beginning in the 1980s and it was a big mistake. Employees either didn’t understand the choices or choose to their advantage or sometimes financial disadvantage and creating adverse selection. Eventually we had to eliminate most of the choices except for HMOs as an option for traditional plans. We had the advantage of managing the premiums because we set them. The agreement was that the company would pay 80% of total costs, but not of each plan available so some people paid much more that 20% until those plans just became unaffordable and were eliminated. These costs then became part of another plan. When you provide choice among plans and they offer different levels of coverage and people can change plans without restriction, it just doesn’t work over the long term. Why wouldn’t a person purchase only the coverage they need at the time? How can you provide actual insurance if the good risks are in one pool and the bad risks in another?


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