Time for Romney to get specific about health care
The Kansas City Star
The Supreme Court will soon issue its decision on the constitutionality of the Affordable Health Care Act. Meanwhile, presidential candidate Mitt Romney says that, if elected, he will start to deconstruct the legislation on his first day in office if the Supreme Court doesn’t do the job for him.
And he then says, vaguely, he’ll start to fix the health care problem. Romney says he will (but doesn’t say how he will) guarantee that people with preexisting conditions can continue to buy insurance if they have had insurance but lost it. He doesn’t address at all what he would do about people with preexisting conditions who don’t have health insurance but basically implies they’ll have to use charity services. State high risk insurance pools already provide a way for people to continue insurance coverage for preexisting conditions, and Romney doesn’t say what he would do better or differently than the existing system.
The Ryan plan, that Romney endorses, hopes to create competition and tax incentives for people to buy health insurance, including its voucher system to replace Medicare. But I have not seen a credible explanation for how the plan will allow people with preexisting conditions to get into a market that summarily excludes people with previous health problems. The Affordable Care Act attempted to solve the problem by requiring people to buy coverage and requiring insurance companies to sell the coverage. Without these provisions, what’s the practical alternative.
To further understand the dilemma, let’s take a look at what would happen to Medicare under the Ryan plan and then discuss the general problem of preexisting conditions.
My understanding is that under the Ryan plan Medicare recipients would receive a voucher to help pay for insurance premiums and that the value of the voucher would be adjusted annually to partially offset increases in costs. I’ve heard various figures of what the voucher amount would be, so let’s guess that it would start at $1,000 per month per Medicare recipient.
Now let’s look at the cost of insurance for people age 65 and older. There aren’t a lot of data on this because most people 65 and over have the existing Medicare plan. But there are exceptions, and those individuals are eligible for insurance in the high risk pools most states have, though preexisting conditions may be excluded for one year.
Missouri’s High Risk Insurance Pool plans can be found on the internet. There are five plans. Let’s examine the high and the low cost plan. On Plan 1 a 65 year old male can buy insurance for $1925 per month with a $3000 out of pocket maximum. On Plan 4, a 65 year old male can buy insurance for $812 per month with a $10,000 out of pocket maximum. An 85 year old male would be charged $3615 monthly on Plan 1 and $1527 on Plan 4.
As you can see, a voucher for $1,000 wouldn’t go very far in covering premiums and deductibles even on the plan with the least expensive premiums. People with uncovered preexisting conditions would for their first year have to pay those costs, which would be in addition to the deductible and premiums. The Ryan plan would provide some assistance to people without means to pay, but would it be enough to get people to buy coverage when the rates look something like the high risk pool plan costs?
Well, you may say, those are the high risk pool premiums. People in good health could get cheaper coverage. But I suspect that most 65 year olds have a preexisting condition that would put them in a high risk category, and almost all 85 year olds would have a health condition that would exclude them. Just do a Google search on “uninsurable medical problems” and you’ll see that insurance companies exclude almost everyone who takes any medication, such as statins to control cholesterol, or anyone who has any chronic condition, such as diabetes, or anyone who has had cancer, even if successfully treated.
So what would retired people do with their voucher? Well, if the voucher wouldn’t cover the monthly cost of a policy, or come close to it, many older people would go without insurance just as many people do already, relying on public hospitals and clinics for their medical care. Under the Ryan plan, younger people, even those who get extra assistance, would likely decide not to buy coverage just as they do now but especially if the premiums exceeded their means, which they surely would for people with health problems unless they were pooled with everyone else, in effect averaging out the rates. This is what the Affordable Care Act tries to do.
But the bigger problem is what insurance companies would do. Would they choose not to sell insurance to a senior who has a preexisting condition? Could they be required to sell insurance to someone who decided to forgo insurance for a few years and then reenter the game later, possibly after developing an illness?
In other words, we’d be back to the problem we have now. The government realistically shouldn’t compel insurance companies to sell insurance to people who buy it only when they get sick. And the government can’t compel people to buy insurance if the individual mandate is deemed unconstitutional.
And people will choose not to buy insurance if the premiums aren’t affordable. They will instead throw themselves on the mercy of charitable hospitals, just as they do now, and hospital rates will raise their rates for the insured in order to cover the costs of the uninsured.
Most of this conversation has been cussed and discussed many times before today. But the facts of the existing premiums under Missouri’s high risk pool ought to give caution to anyone who thinks that a Medicare voucher is going to come close to covering the cost of insurance for senior citizens.
Say what you will about the Affordable Care Act, but the president put his cards on the table for the public to see. We know what he signed into law (or should know if we take the time to read a little about it.)
Now it’s Mitt Romney’s turn to be specific. He says he’ll repeal the act, but the details are still fuzzy about what he would do to replace it and fix the health care mess. That’s how politicians campaign, I suppose, but only if we let them.