People have GOT to pay attention - and I don't
understand how those over 50 can even vote for that
guy.
"Donald Trump's claim at his debate with Kamala Harris
that he has "concepts of a plan" to reform healthcare
in America has generated raised eyebrows and ridicule,
as though he were merely fooling voters into thinking
that he actually had been thinking about the issue
despite having paid it zero attention.
It fell to Trump's running mate, JD Vance, to put meat
on those bare bones. What he offered is indigestible.
It's also familiar. It's the revival of "risk pools,"
in which people with certain preexisting medical
conditions are segregated into their own insurance
markets, leaving healthy applicants to enjoy lower
premiums based on the lesser likelihood that they would
cost insurers money. The claim is that the sicker
cohort can be protected separately. As we shall see,
that's wrong.
We want to make sure everybody is covered. But the best
way to do that is to... not have a one-size-fits-all
approach that... actually makes it harder for people to
make the right choices for their families.
Here's how Vance put it during an interview Sept. 15
with Kristen Welker of NBC's "Meet the Press":
"A young American doesn't have the same healthcare
needs as a 65-year-old American. A 65-year-old American
in good health has much different healthcare needs than
a 65-year-old American with a chronic condition. And we
want to make sure everybody is covered.
"But the best way to do that is to actually promote
some more choice in our healthcare system and not have
a one-size-fits-all approach that puts a lot of people
into the same insurance pools, into the same risk
pools, that actually makes it harder for people to make
the right choices for their families," he said.
Vance has repeated this incoherent claim in subsequent
appearances. But the ACA didn't make it harder for
people to "make the right choices" on healthcare, as he
asserted; it opened health insurance to millions of
families that had previously been excluded — as of this
year, 45 million people are enrolled in Obamacare
exchange plans or expanded Medicaid. America's
uninsured rate fell from 16% in 2010, before the ACA,
to 7.7% at the end of 2023.
Nor is the ACA a "one-size-fits-all" program — it
offers a range of alternatives for families and
individuals to choose from, at different prices and
different coverage modes. But it does mandate that some
indispensable coverage is guaranteed for all.
At a theoretical level, Vance is right: If you put sick
people into their own risk pool, then healthy people
outside that pool can be charged less, so everybody
wins. But he's blowing smoke. We know this because the
exact same idea was pushed by House Republicans under
then-Speaker Paul Ryan (R-Wisc.) in 2016. At that time,
I labeled the idea a "scam." It still is.
Vance is trying to assure the public that those with
preexisting medical conditions will continue to be
covered. He knows that a recrudescence of public
concerns over coverage of preexisting conditions would
be electoral poison. He may also be hoping that people
have a rose-colored recollection of what it was like
for those Americans in the dark ages before enactment
of the Affordable Care Act in 2010.
The denial of insurance to people with preexisting
conditions, or the imposition of premium surcharges to
discourage them from applying, was eliminated so
decisively by the ACA that many Americans have
experienced "amnesia" about it, as Larry Levitt of KFF
has termed the condition. Levitt fears that this
amnesia has become an obstacle to warning voters what's
in store for them in a Trump administration.
Here's a reminder. Before the ACA, the business model
in the individual insurance market was to reject
applicants based on their medical history, or exclude
coverage for their conditions, or jack up premiums for
them to the point that coverage was unaffordable.
Insurers were ruthless about paring their customer base
down to the youngest, healthiest applicants — those
with minimal expected healthcare costs unless they were
hit by a meteor.
The guidelines issued by Blue Shield of California ran
to 25 pages. The “declinable conditions” — those for
which applicants could be rejected without further
medical review — included broken bones, kidney stones,
depression, arthritis and psoriasis. Those with 21
varieties of cancer in their medical histories could be
rejected automatically or offered coverage only at a
higher premium.
So it's unsurprising that Vance would try to couch his
prescription in terms suggesting that it would
safeguard coverage for preexisting conditions. That
brings us to the history of risk pools.
Before the ACA, 35 states, including California, had
established risk pools in one form or another. What we
know about them is that they were massive failures.
Ryan put his thumb on the discussion scale about risk
pools in a couple of ways. One was to flagrantly
underestimate the number of people who would be
affected: He estimated the prevalence of Americans with
preexisting conditions at 8% of adults under 65.
By contrast, the Department of Health and Human
Services had estimated in 2011 that 50 million to 129
million Americans under 65, or as much as half the
adult, non-elderly population, had some kind of
preexisting condition. Up to 20% of them were
uninsured. The ratio rose sharply with age, so that as
many as 86% of those aged 55 to 64 were at risk of
being denied insurance because of their medical
condition.
Ryan also depicted risk pools as a novel free-market
alternative to the ACA. It wasn't; it was a hoary old
chestnut that had already proven its inadequacy.
California's pool, the Major Risk Medical Insurance
Program, or "MR. MIP," exemplified this problem. In
1990, when the program began with a $30-million budget
funded by tobacco taxes, that was enough to enroll only
10,000 of the estimated 300,000 Californians who
qualified. In 2009, enrollment was cut back to 7,100.
Premiums were set as much as 37% higher than market
rates for individual policies. The plans came with
annual caps of $75,000 in benefits, not enough to cover
treatments for some major diseases.
One state's risk pool is typically cited as a success.
It was Maine's Guaranteed Access Reinsurance Assn., or
MGARA. This pool was billed as "invisible" — enrollees
didn't know they were in it. Instead, all insurance
customers had to fill out a questionnaire that insurers
and the state used to determine who belonged in MGARA.
As far as they knew, they were lumped in with everyone
else.
MGARA was funded by taking 90% of the premiums paid to
commercial insurers by enrollees in the pool, and
charging all policyholders a $4 monthly surcharge. It
was in place only for 18 months, or until
implementation of the ACA made it irrelevant.
Importantly, during MGARA's existence in 2012 and 2013,
insurers were permitted to offer trimmed-down health
plans — they weren't required to offer maternity care
coverage, for example, a huge cost center. That plainly
discriminated against many women of child-bearing age
and their families. The ACA mandates maternity and
newborn coverage.
MGARA's advocates assert that the secret of its success
was that it was well-funded. Yet a 2017 analysis of the
program for the Maine legislature reported that the
program had collected $41.2 million in premiums and
assessments during its lifetime, but had paid out $66
million in claims. In other words, the program was in
the red from the start; had it not been supplanted by
Obamacare, it surely would have experienced rising
deficits requiring a revision.
A federal version of risk pools as Vance outlined it
would face the same challenge — how to pay for them.
Vance neglected to mention that issue, but the cost of
a national risk pool covering the people with medical
conditions could be as high as $650 billion a year.
That begins to approach the cost of our national
defense establishment.
The Vance-Trump program, in reality, is deregulatory at
its core. Vance told NBC's Welker: Trump "of course
does have a plan for how to fix American healthcare,
but a lot of it goes down to deregulating the insurance
market so that people can choose a plan that actually
makes sense for them."
Welker responded to this with the spectacularly
ignorant statement, "So what I hear you're saying is
Obamacare stays in place." What Vance said, of course,
was exactly the opposite. He was talking about
dismantling Obamacare's protections for customers in
the individual market root-and-branch. That, in fact,
was Trump's record as president.
He allowed short-term health plans to be renewed
indefinitely, which meant allowing those bare-bones
plans to siphon younger, healthier customers out of the
overall health insurance pool. Insurance would be
cheaper for them, because the policies would cover
less; but much more expensive for everyone else,
including those with a health condition that otherwise
would be uncovered.
Trump also supported the Obamacare repeal and
replacement plan passed by the Republican-controlled
House in 2017. The bill, according to the Congressional
Budget Office, would have taken away health insurance
from 23 million Americans by 2026. Trump also advocated
replacing the ACA’s premium subsidies and Medicaid
expansion with a block grant to states. This plan, as
Levitt observed, would have "reduced federal spending
on the ACA and Medicaid by over $1 trillion over a
decade." But it would have left millions of Americans
out in the cold.
The implications of the loss of coverage for Americans
would be dire. Studies have consistently shown elevated
mortality for uninsured adults compared with the
population covered by commercial insurance — a death
rate as much as 40% higher among uninsured adults than
among the insured, according to a key 2009 paper.
That's the world Trump and Vance want to return us to.
Is America really ready to return to the dark ages?"
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