Unwinding Obamacare will be one of the most important tasks any health secretary has ever faced. With the help of Congress, newly sworn in Secretary of Health and Human Services Tom Price must rollback the law’s health insurance regulations that doubled premiums across the individual market, canceled 6 million peoples’ insurance policies, and threaten millions more with the prospect of having no insurance at all.
But Price must also ensure people with pre-existing conditions can access essential medical services after Obamacare. At a CNN town hall event, a former businessman told Speaker of the House Paul Ryan, R-Wis., “At 49, I was given six weeks to live with a very curable type of cancer … Being someone with a pre-existing condition, I rely on the Affordable Care Act to purchase my own insurance.”
As that businessman illustrates, many individuals were denied health insurance because of pre-existing conditions. According to the Congressional Budget Office, more than one million people were too sick to be covered prior to Obamacare.
But even after Obamacare mandated insurers cover pre-existing conditions, many still struggle to get treated. Patients with rheumatoid arthritis and multiple sclerosis now pay coinsurance payments in excess of $1,000 every month for their drugs. They must also work within Obamacare’s extremely narrow networks that offer limited access to primary care doctors and specialists.
Price and his fellow Republicans must reject Obamacare’s false choice that our healthcare system can only help the sick at the expense of the healthy. A sustainable Republican healthcare agenda can simultaneously rescue young and healthy people from Obamacare’s premium increases and protect vulnerable patients with pre-existing conditions.
The most immediate way is to establish high-risk pools. Before Obamacare came onto the scene, 35 states funded not-for-profit high-risk pool programs that provided affordable coverage to nearly 200,000 patients with pre-existing conditions. An extensive Kaiser Family Foundation review of high-risk pools concludes, “Nearly four decades of experience with high-risk pools suggests they have the potential to provide health coverage to a substantial number of people with pre-existing conditions.”
The new head of HHS and Congress can expand on that success and fund state efforts to reopen high-risk pools. Price’s plan, the Empowering Patients First Act, provides $1 billion in annual seed funding over three years to launch high-risk pools.
Ryan’s “A Better Way” healthcare plan goes even further and provides $2.5 billion in dedicated annual funding over a decade. In addition, it would cap premiums for individuals in high-risk pools and prohibit states from imposing waiting lists.
Beyond immediate relief, Price and Congress should encourage healthy individuals to purchase individual coverage before they develop pre-existing conditions. More than 60 percent of Americans currently rely on employer-provided insurance they’ll likely lose as soon as they get sick. A 2008 study in Health Affairs estimates that chronically ill individuals with employer coverage are twice as likely to lose their insurance as those with individual coverage.
In contrast, the individual market provided chronically ill patients a variety of protections even before Obamacare. In the pre-Obamacare era, 75 percent of individual insurance plans offered “guaranteed renewability” options that protected individuals from higher premiums if they got sick.
Price can break the country’s dependence on unreliable employer-sponsored insurance by offering individuals a refundable deduction to purchase their own health coverage. Sen. Rand Paul, R-Ky., has an Obamacare replacement plan that would deposit a $5,000 taxpayer contribution into a health savings account for every household. The Republican Study Committee’s “American Health Care Reform Act” would provide a $7,200 deduction.
Both of these plans would allow individuals to go onto the individual market freed from Obamacare’s restrictive regulations and pick the best insurance for their healthcare needs. Young and healthy customers could purchase basic catastrophic coverage and use the rest of their deduction to pay for routine medical care. Older and sicker individuals could purchase more comprehensive coverage with lower out-of-pocket costs.
Whatever plan Price and congressional Republicans pursue, they must ensure people with pre-existing conditions have reliable coverage. And most importantly, they must foster an innovative and dynamic individual insurance market that protects people in the future from facing these debilitating financial burdens alone.
Charlie Katebi is a contributor to the Washington Examiner’s Beltway Confidential blog. He is an advocate at Young Voices.
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