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A look at how each GOP candidate’s specific plans for healthcare could impact the industry.
By abolishing Obamacare-which all GOP presidential candidates vow to do-the health insurance industry and providers would be released from its numerous regulations. In the short term, according to information on Kaiser Health Foundation’s website, millions of people insured under the Affordable Care Act (ACA) policies, expansion of Medicaid eligibility, or through public subsidies could lose their coverage.
Furthermore, the change would unleash large, economic, quality, and accessibility impacts upon individuals, communities, states, providers, and health plans, Kaiser Health Foundation reports.
“Individuals would lose coverage as subsidies disappear or are reduced dramatically,” says James Smith, MBA, FACHE, executive vice president, GE Healthcare Camden Group, Rochester, New York. “As insurers lose members, they will react as any business by attempting to grow market share and cut costs.”
Smith expects insurers to increase insurance premium prices to help absorb the cost of infrastructures built for a different model of healthcare and for a much larger population. “Because there would no longer be controls over benefits nor would there be limits on administrative costs and caps on profits, it could send premiums as well as out-of-pocket expenses skyrocketing,” Smith says.
Consequently, insurers would have to reallocate costs throughout their companies-forcing layoffs, consolidations, and ultimately bankruptcy for those who cannot change fast enough. “This cascade could lead to consolidation with greater concentration of both health plans and providers as they respond to a necessity to grow even larger and to do it faster to absorb decreasing membership across a set of fixed costs,” Smith says.
Now let’s take a look at how each GOP candidate’s specific plans for healthcare could impact the industry.
In addition to repealing ObamaCare, Trump would abolish the mandate on individuals to purchase insurance. If this occurred, according to authors of The Commonwealth Fund Blog, an estimated 12.3 million fewer people would have insurance, which in 2017 would roll back 56% of the insurance gains since the inception of the ACA. Furthermore, individual market enrollment would decline by about 25%, with the largest losses occurring among the young and healthy. Consequently, individual market premiums in 2017 would increase by 8%.
In addition, Trumpcare would no longer prohibit insurers from charging different premiums based on health status and no longer require them to offer coverage to anyone who applies, says Joseph M. Mack, MPA, president, Joseph Mack & Associates, Dana Point, California. “Ultimately, Trumpcare would decrease access to healthcare.”
Trumpcare would rely on market forces, including tax deductions and the use of health savings accounts, to limit costs of private insurance coverage.
“Trump implies that premium costs would be less,” says Mack. “What may actually occur is that insurance companies will design products and premiums in an effort to cherry pick individuals who have higher earnings and present lower risk.”
Trump also proposes to allow the sale of health insurance across state lines, shifting Medicaid from federal to state control, but he would not require insurance companies to develop and sell products to every state or every population.
“Regulating the sale and management of these products might require expanded federal policing-a political philosophy that seems to contradict Republican values-given the fact that the health insurance industry is a part of the banking and finance industry,” says Jay Wolfson, DrPH, JD, distinguished service professor of Public Health, Medicine, and Pharmacy; associate vice president, University of South Florida Health; and senior associate dean, Morsani College of Medicine, University of South Florida, Tampa, Florida.
Says Mack, “This proposal would potentially benefit larger multistate plans already in place. It may also lead to increased consolidation as smaller single state plans struggle to compete with plans with larger risk pools to mitigate losses.”
Furthermore, abolishing restrictions on selling insurance across state lines would require repealing The McCarran Ferguson Act passed by Congress in 1945 that returned insurance regulation to the states to ensure the preeminence of state regulation, he says.
In addition to repealing Obamacare, Senator Cruz wants to create insurance that is personal, portable, and affordable. “Little is known of Cruz’s alternatives, other than to utilize market forces to rein in healthcare costs,” Mack says.
Regarding Medicare, the Dallas Voter Guide has reported Cruz as saying, “We must save Medicare by gradually increasing the eligibility age and by moving to a premium support system.”
“Various times before, Republicans have proposed shifting control of Medicaid from the federal government to states via fixed payment block grants, and converting Medicare into a premium support program that pays for some, but not all services,” Mack says. “Cruz’s relationship with the Republican party does not guarantee that he would adopt this approach, nor that the party would support his proposals.”
Cruz also wants to delink health insurance from employment, so if someone loses their job, their health insurance would go with them. “Some economists believe that individuals should be at the forefront of insurance purchasing and provider utilization decisions, rather than the existing employer-based system,” Mack says. “However, pricing and rating of individuals delinked from insurance would be challenging under Cruz’s plan. Presumably community ratings would be required, which would likely result in higher premiums for individuals.”
Like Trump, Cruz also supports the sale of insurance across state lines and the expansion of HSAs.
Governor Kasich says he would repeal Obamacare and improve access to healthcare by lowering costs while returning control of healthcare choices to patients.
He plans to do this by reducing the enormous amount of unnecessary healthcare that comprises about one-third of the system’s current expenses.
“This would be done in collaboration with insurance companies and providers (and require more aggressive federal legislation) to establish best practices that result in best outcomes (value driven), and drive them through payment,” Wolfson says. “Deviations would not be paid. Expanding the scope of insurance to cover preventive services to earlier identify and treat conditions before they become chronic and expensive is also part of his plan.”
These changes are already embedded in the ACA through value-driven reimbursement guidelines and will impose stricter, outcome-based payments between now and 2020, Wolfson says.
By providing patients with more transparent information, not only about costs to them (deductibles and copayments), but about quality and outcome of practitioners and hospitals, patients can make more informed and healthy choices, Wolfson continues. And by paying healthcare practitioners for providing health and wellness education, instead of only for the provision of medical procedures, the shift toward prevention, wellness, and patient responsibility could be expedited.
Kasich also believes that the federal government should provide funding to states and let them create local solutions, rather than dictating what states should do. “Based upon Ohio, Kasich’s approach appears to be Obamacare-light, with the principal difference being that states should get the money and be allowed to create their own Obamacare-light programs,” Mack concludes.
Karen Appold is a medical writer in Lehigh Valley, Pennsylvania.