Overview

Last Thursday, President Trump signed an executive order intended to ease some health insurance regulations and to create an avenue for certain health plans to by-pass regulations under the Affordable Care Act (“ACA”). The goal was to significantly impact “Obamacare” and reduce the cost of coverage for those in the individual health insurance market.

This article is thought provoking and tells a story using dramatic personal stories, which is Gawande’s style. The examples are compelling and the dialogue with the subjects brings forward comments many of us hear every day. Never-the-less, there are some critical elements to this example that need to be considered.

Background

In 2017 the desire to reform Medicaid became a central part of the Republican agenda to “Repeal and Replace Obamacare” (i.e., the ACA).  Of particular concern to those seeking reform is the cost of this federal entitlement program, the growth in its spending, and the impact that these costs have on the national debt.

We all recall the 1939 movie featuring James Stewart, who played Jefferson Smith, an idealistic young and newly appointed US Senator. In this movie, Mr. Smith is initially mentored by Senator Joseph Paine who later attempts to discredit Smith and sabotage his efforts to build a boy’s camp on a site where a more lucrative project could go.

Caveat: the individual market is not an area of interest for insurance brokers. However, it is central to the debate on the future of health care reform, and thus needs to be addressed. Our expertise in the broader sense may help inform this volatile issue.

I urge the reader not to think of what is politically do-able or palatable, but rather what will work. Our problems to-date in this area are because we have been too political and not informed by reality.

The Proposition

We have been told that the Republican administration is considering the removal of the ACA’s Employer Excise Tax (aka the Cadillac Tax), replacing it with a removal of the employer tax deduction for employment based insurance.

The Patient Protection and Affordable Care Act (PPACA) of 2010-the federal health reform law-included a provision requiring each state to establish a Health Insurance Exchange by 2014.

A questions has been posed as to whether health care organizations (aka hospitals) and insurance companies should be required to be non-profit.

There are three plains to consider as we look forward regarding health insurance revenue.

Any legislative action relating to health insurance coverage should promote the employer-based health insurance system by…