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In less than a month, Donald Trump will be sworn in as the 45th president of the United States, and the clock will begin ticking on the Affordable Care Act's likely demise.
The ACA, which is more commonly known as Obamacare, has been a polarizing law since Day One. The Kaiser Family Foundation's (KFF) Health Tracking Poll, which has been taken nearly every month since the ACA was signed into law in March 2010, often finds more people with an unfavorable opinion of the law than favorable. This poor opinion of Obamacare has persisted even though, between the fourth quarter of 2013 (the quarter prior to its implementation) and the end of the second quarter of 2016, the uninsured rate has fallen from 16% to just 8.9%, according to the Centers for Disease Control and Prevention.
Three reasons consumers haven't embraced Obamacare
Why are consumers so dissatisfied with Obamacare? While the answer to this question is still up for debate, it probably boils down to three factors.
To begin with, the individual mandate and accompanying penalty for failing to purchase health insurance hasn't been well received. Consumers probably don't like being told they have to purchase health insurance, and that if they don't, they'll be fined via the Shared Responsibility Payment (SRP) when they prepare their taxes. In 2016, the SRP for not buying health insurance has jumped to the greater of $695 or 2.5% of your modified adjusted gross income. KFF estimates that average households SRP's in 2016 could approach $1,000.
Secondly, when the ACA was first passed, President Obama had touted the idea that consumers would be able to keep their health plans and primary-care physicians. Unfortunately, this wasn't the case for millions of Americans. Ultimately, insurers were in control of whether they beefed up their health plans to meet the 10 minimum essential health benefits required by Obamacare to be listed on the ACA's marketplace exchange. Quite a many chose not to update their plans or chose to narrow their networks, thus displacing millions of previously insured Americans.
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Finally, consumers probably aren't too happy with the rapid premium inflation being seen with Obamacare. The premise that consumers would be able to shop for health insurance online and make easy side-by-side comparisons inspired hope that competition among insurers for new members would drive down premiums, or at least stymie premium inflation. However, the failure of the risk corridor to provide a financial foundation for insurers that were new entrants to the marketplace, along with sicker-than-expected new enrollees, left insurers with little choice but to increase their premiums. In 2017, the average benchmark plan (the second-lowest silver tier plan) in the more than three dozen states covered by HealthCare.gov is rising by a staggering 25%.
Here's what consumers really want in a health plan
However, if the American public were allowed to craft the perfect health plan, it would contain very few mandated components and probably be a whole lot cheaper than it is now, according to a new survey from AgileHealthInsurance.com, which wound up surveying 1,572 adults from across the country and posed the following question to all participants:
"Assuming the cost/insurance premium would depend on the benefits you select, which of the following benefits do you think should be mandatory in every health insurance plan?"
Here were the surprising results, with supporting percentage in parenthesis:
- Hospitalization, lab tests, and emergency care (57.1%).
- Doctor and specialist visits (55.8%).
- Prescription drugs (54.3%).
- Preventative care/wellness programs (50%).
- Maternity and newborn care (44.5%).
- Mental health and drug/alcohol rehab (37.6%).
- Other (2.2%).
In other words, there are just three components to a health plan that a majority of respondents supported (50% on the nose isn't considered a majority).
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Seeing prescription drugs and hospitalization in the majority column isn't in the least surprising. Prescription-drug prices jumped more than 10% in 2015,and according to a new forecast from QuintilesIMS Institute for Healthcare Informatics, U.S. prescription market growth is expected to average between 6% and 9% annually between now and 2021. That consumers would want some sort of protection from that kind of inflation, or the crippling costs of having to be hospitalized, is not much of a surprise.
What's somewhat shocking is that some of Obamacare's core essential benefits, such as maternity and newborn care, as well as preventative care, didn't make the cut. Clearly, the fewer mandates to a healthcare plan, the less expensive it would be. According to AgileHealthInsurance.com's survey, the findings suggest that coverage geared toward costly and/or chronic conditions are what matter most to the American public.
Trump has a tough task ahead of him
One thing is pretty clear: Donald Trump has his work cut out for him when it comes to the possibility of repealing Obamacare and replacing it with a different type of health plan.
Last month, shortly after winning the election and meeting with President Obama, Trump implied that he might keep two of Obamacare's key provisions. One would allow children to stay on their parents' health plan if under age 26, while the other would require insurers to accept consumers regardless of whether they have pre-existing medical conditions. Both would seemingly be good news for consumers, but it still somewhat ties the hands of insurers that are struggling to attract healthy individuals.
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However, Trump has continued to show interest in repealing other aspects of Obamacare, from the subsidies handed out monthly to the minimum essential health benefits required for each plan. In a way, by repealing nearly all of Obamacare, Trump would be removing some of the aspects that the survey suggested a majority of consumers don't care for.
What Trump hasn't addressed yet is how he'd keep premium prices from continuing their ascent (i.e, how would healthy individuals be persuaded to enroll to balance out the high numbers of sicker enrollees?), and how he'd ensure that millions of Americans wouldn't lose their health insurance once the subsidies are scaled back. Right now it looks as if Trump would merely be trading one complaint about Obamacare for a different type of complaint with "Trumpcare."
There's a lot still to be hashed out with Trump's vision of healthcare in America, and it'll be interesting to see if Trump's health mandates align with that of consumers in the coming months once he's in office.
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