Changing Obamacare likely to mean higher costs, less coverage – or both

Trudy Lieberman

Lori Eng, a 62-year-old office manager who works in western Nebraska, sent an email not long ago telling me she was terrified she might lose her Obamacare health insurance. The many horror stories passed along in the media had frightened her, and she wanted me to hear from someone who had benefited from the law.

No wonder Eng is scared. Ever since the Affordable Care Act passed almost seven years ago, opponents, mostly Republicans, have vowed to repeal the law and replace it with a different plan. The November election results now make that a possibility.

Eng didn’t have health insurance before the Affordable Care Act came along. Her four-day-a-week job did not provide it, and her salary − less than $20,000 a year − was too low for her to swing an insurance premium. She bought her first Obamacare policy from one of the insurance co-ops that operated in Iowa and Nebraska that was supposed to offer cheaper coverage. It did − until it collapsed. With her government subsidy, she was able to buy a plan for only $50. She also qualified for an extra subsidy to help pay her deductible and coinsurance.

When the co-op failed, as most eventually did, she got a similar plan the next year from another company. Because her subsidy had increased, she paid only $34 each month. That year Eng was diagnosed with breast cancer, and her treatment, which included chemotherapy and a double mastectomy, cost around $200,000. She paid just $1,450 out of pocket.

This year, marketplace realities hit home. Premiums and deductibles were going up a lot. She found a plan with a relatively small deductible; but still must pay 20 percent coinsurance on everything until she reaches $2,250, the policy’s out-of-pocket limit. Other plans had much higher out-of-pocket limits, a risk she couldn’t take considering her health.

“I’m hanging on by my toenails until I get Medicare if it’s still there when I’m able to get it,” Eng told me.

Because of people like Eng, it’s unlikely Congress will simply repeal the existing law without creating a new plan to help out people with Obamacare policies. What it will be is anyone’s guess. But if it follows the thinking laid out by Georgia Rep. Tom Price, the incoming Secretary of Health and Human Services, it might well mean people will pay more.

Price proposes scrapping the individual mandate that requires nearly everyone to carry health insurance and eliminating the federal subsidies that make insurance premiums affordable for people like Eng. Instead, policyholders would be given tax credits to help buy insurance. Whether the credits would be adequate, given how high premiums are now, is an open question. More insurance policies would be offered with health savings accounts; a tax-advantaged arrangement consumers would use to pay most of their bills. It would be combined with high-deductible insurance for catastrophic medical bills.

A new plan would continue to let people with pre-existing health conditions obtain coverage, but there might be strings attached. They might need to have been covered for a certain period, like 18 months, before obtaining new coverage. Insurers want to stop people from signing up when they get sick.

The minimum benefits now required for Obamacare policies might become a thing of the past. That means insurers could offer cheaper coverage without maternity or psychiatric care or other services that will make policies cheaper and possibly more attractive to younger people.

Older people could end up paying a lot more. Currently the law prohibits insurers from charging older policyholders more than three times what they charge younger ones who are presumably in better health. Under a new version of Obamacare older people could pay five times more.

Keep in mind no health system is perfect. Every system has the same stresses and strains resulting from increasing drug prices, high-priced technology and physician demands for more money. How countries address those cost pressures involves trade-offs.

All countries, including ours, limit medical services, a point to remember when the spin takes over in the Obamacare war. Other countries may have a fixed number of very expensive imaging machines available in a particular hospital or community, so queues form for some kinds of treatments. In the U.S., the cost of care limits who receives it. If you can’t afford some high-priced scan or have no insurance, chances are you won’t get the service.

I’m not a betting person, but if I had to wager on an Obamacare replacement, I would bet it would almost certainly mean Eng and millions of others will assume more of the financial burden for their care.

How do you think Obamacare should change? Write to Trudy at [email protected].