President Trump recently unveiled his America First Healthcare Plan, addressing several healthcare reforms that if implemented, could have an important impact on healthcare prices. President Trump’s plan is focused on harnessing technology to improve the quality and convenience of healthcare, while also addressing the cost of care by tackling surprise billing, pricing transparency and prescription drug prices.
At the same time, President Trump acknowledged that he is working to invalidate the Affordable Care Act (“ACA”) and is looking forward to replacing it with a new plan; which begs the question: If President Trump is successful, what happens to the ACA and the millions covered by it?
Replacing the ACA
Any replacement of the ACA will take time to develop and implement across the country, which would necessitate a transition period between the ACA and President Trump’s healthcare plan (“TrumpCare”) so that consumers would likely continue on their ACA plan until they transition to the new plan.
The ACA taught us that the majority of consumers are interested in being covered by an affordable health insurance that covers pre-existing conditions. The biggest concern for most consumers about the ACA is not the coverage itself, but the cost for the coverage. For those not eligible for a subsidy, a family plan for four in Arizona can cost $1,500 per month with a $5,000 deductible. This cost concern is likely what drives the 8% of consumers who have not signed up for a plan and choose to remain uninsured.
If we are to cover more people at a more affordable price, we could do it by making changes to the plan that give consumers more choice over what is covered by their plan – and allows them to decide how much coverage they need.
There are several elements of the ACA that create a robust plan with a high price tag. First, the ACA offers unlimited coverage. Typically, an insurance plan will have a maximum amount of coverage to help keep costs down. And in reality, someone would only use the higher limit of the coverage in the event of a truly catastrophic event such as a complicated cancer or the birth of twin preemies. For the majority of people, unlimited coverage is unnecessary and costly. With TrumpCare, a person could select different options, and choose between a minimum of coverage such as $1M or higher levels. And the federal government could devise a high-risk pool to help those who do require higher coverage limits.
Second, to attract younger people into the plan, TrumpCare could spread the rate burden across more age bands. The ACA limits rates to three age bands, which protects older people from paying much higher rates based on their age and risk factors, but impacts young people who are charged more for insurance that they are less likely to use. TrumpCare should have at least five age bands so that the product is more affordable and attractive for those who are just starting their careers and who likely need the coverage the least.
Lastly, TrumpCare should offer a basic level of catastrophic coverage to protect people from bankruptcy so that people who experience illnesses and accidents are protected. Beyond this basic coverage, TrumpCare should allow consumers to select the coverage that they would like to add to the plan, so that they can create a plan to suit their healthcare and budgetary needs. For example, as a 45-year-old woman who is surgically not able to have more children, I would be able to choose whether to maintain maternity coverage.
During a health pandemic where even our President is affected, healthcare is crucial. President Trump’s America First Healthcare Plan takes important steps that, if implemented, would improve healthcare by improving accessibility and lowering costs. And if President Trump is successful in his bid to replace the ACA, his healthcare replacement will be his legacy.
Jan Dubauskas is a healthcare expert, enthusiastic insurance pro, attorney and mom serving as vice president of healthinsurance.com.
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