The ACA Replacement Plan that the Main Stream Media is Hiding

The below article contains a common sense approach to replacing the Affordable Care Act. I have submitted this article as an Op-Ed to several major newspapers: the New York Times, the Wall Street Journal, the Washington Post, the Philadelphia Inquirer and others. None of these news organizations deemed this well thought out plan worthy of publication. Could it be that the main stream media will not publish this because they want President Trump to fail? To be fair, I have also sent the same information to my two senators (Pat Toomey and Robert Casey Jr. of Pennsylvania) and my representative in Congress (Ryan Costello). After 2 months, Representative Costello called me to request a meeting on the very day of the call. Since I was/am out of the country until February 9th, that request was appreciated, but unworkable. Of course, the multiple rejections my article has received could mean that my plan is lousy. However, I want you to be the judge so please read on.

As I informed the news media and my elected representatives, I am a retired vice president from Computer Sciences Corporation's Health Plan Solutions division. CSC's Health Plan Solutions developed software to run the large health insurance companies and was sold to DST Systems after I departed CSC. I actually know about health insurance. Now for my ACA replacement plan .........

The house is on fire: Premiums for those citizens that purchase their own health insurance is rising on average by 25% in 2017. In Phoenix, Arizona, the rates are rising 116%. Premiums for healthy citizens had already risen by over 100% since the ACA was put into effect. Furthermore, out-of-pocket deductibles have increased at an even higher rate than the premiums.

Background on the ACA: Per the Kaiser Family Foundation’s website: 7% of Americans purchase their own health insurance, 49% get health insurance from their employer, 36% receive socialized heath care (mainly Medicare and Medicaid) and 8% have no health insurance. The 7% of Americans that pay for their own health insurance are paying premiums that cover the sick people within their 7% risk-pool, AND the sick people from corporate America that can no longer work. This is why premiums for self-paying citizens are skyrocketing.

The Affordable Care Act (ACA) has taken away a citizen’s right to purchase health insurance as an individual. A citizen must purchase health insurance as a member of a risk-pool of all self-paying people in their state. This state-wide risk-pool allows those with a preexisting condition to obtain health insurance at a reasonable rate because all the healthy people in their state-wide risk-pool must pay a higher premium than they did pre-ACA. This sharing of risk concept is written into the ACA as a "shared responsibility."

The premium leveling manipulation by creating state-wide risk-pools has caused healthy people to pay more so that unhealthy people can pay less. Someday, the healthy citizen may become an unhealthy citizen and they will then benefit from this premium manipulation so this arrangement seems to be fair.

(The major defect of the ACA): However, ALL the people in the state-wide risk-pool (healthy and unhealthy) are paying more than they should. All unhealthy, private sector health insurance consumers reside in the self-paying group because chronically and catastrophically sick people cannot work. Therefore, the self-paying group (7%) must pay higher premiums to pay for ALL the private sector sick people while the employer provided group (49%) enjoys lower premiums because sick people cannot stay in their risk-pool for long. The COBRA law allows an employee to stay on their employer’s health plan for up to eighteen months following the termination of their employment, then they must move on. However, they must pay the full cost of the employer health insurance and cannot receive ACA subsidies for COBRA coverage. Therefore, most catastrophically sick and/or injured citizens drop out of their company provided plan and purchase their health insurance as a member of the 7% of self-paying group. This makes the little group of 7% a very unhealthy risk-pool.

A note on subsidies: Approximately 80% of self-paying citizens receive subsidies to assist them in paying for their health insurance. That leaves about 1.5% of Americans that get stuck with paying the full cost of health insurance that is priced through ridiculous actuary manipulations. 1.5% is the right number for politicians and health insurance companies to not give a damn about. However, if health insurance was more appropriately priced, more citizens would be able to afford to pay their own way. Do our politicians believe that people should not be given the chance and dignity of paying their own way through life?

Back to the defect: If all private sector citizens were in the same risk-pool, the premium manipulations would be fair. Everyone would receive the benefits and all would pay for the benefits. As it stands, the few in the self-paying group shoulder the bill for the benefits provided to ALL private sector health insurance consumers. To demonstrate this in numbers consider that if self-paying consumers receive a 25% increase in their premiums (the 2017 national average) and employers receive a 3% increase in their premiums, the weighted average of the two groups combined would be a 5.75% increase. There are a lot more people in the employer provided group to absorb the costs of the unhealthy, but they do not absorb any of the costs. It is obvious that big business is realizing a huge benefit from this scheme – and that the little guy is getting hammered.

The easy fix:

1)   Create a single, state-wide risk-pool of all private sector citizens (self-payers and employer groups including all government employer groups).

2)  Prohibit businesses from self-insuring. Self-insured plans limit a business’s risk to their own population of healthy employees. All must participate in the “shared responsibility.”

3)  Bar insurance companies from offering plans to employer groups unless they also offer the same plans to self-paying citizens (otherwise the insurance companies would raise their premiums for the employer group without taking on the high risk of the self-payers).

4) Remove the requirement for businesses to provide health insurance. This requirement has eliminated a large swath of full-time jobs. In a competitive market, businesses will continue to provide health insurance as they did before the ACA.

5)   Later, the state-wide risk-pools should be homogenized into a single nation-wide risk-pool. That is too much to bite off when an immediate fix is needed, but this is how you cross state lines.

This solution puts out the “house-on-fire” that is causing the “repeal and replace” demands. With this fire put out, we need to put our private sector to work to develop more cost-effective health delivery methods. Rest assured, there will be a way to control costs. The above noted fix will cost big-business more and big-business will force the private market to bring the costs under control. The little, self-paying consumer will never have the purchasing power to bring costs down on their own. The beauty of this fix is that it equitably distributes the private sector health care costs and by doing so it makes the out-of-control-costs the problem of big-business. And, big-business will fix the problem.

Once big-business gets health costs under control, Medicare and Medicaid costs will also fall in line; thus preserving the financial integrity of both programs as well as saving citizens trillions of dollars.