April 14, 2024
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Healthcare Reform Matters in Your Life—So Your Vote Does Too

This is likely the first time you remember your vote actually mattering in a presidential race!

New Jersey’s June 7 presidential primary is way back on the primary calendar. However, with surprisingly down-to-the-wire races on both the Democratic and Republican sides, Garden State voters can have a real say in who the nominees—and our next president—will be.

If there is anything we learned over the past eight years, it is this: Who the president is matters a whole lot in our daily lives—particularly in the arena of healthcare. Barack Obama’s presidency brought historical “change” through his signature piece of legislation, the Affordable Care Act, a.k.a. Obamacare.

And we’re not done. Ideology aside, it is clear that the current US healthcare market is a work in progress and will require significant changes under our next president. The changes will depend heavily upon who occupies the White House next year.

Where We’re At Now

Healthcare reform has proven to be a mixed bag—with a long list of both positives and negatives.

The positives may sound simple but their real effects for countless families cannot be overstated. Simply put, more people can afford adequate health care coverage. Medicaid eligibility has been expanded, giving more poor families health care at no cost. The ACA subsidies cover families with incomes up to 400 percent of the federal poverty level, offering subsidies to make health care plans—all of which need to meet “minimum essential coverage” guidelines—affordable. Based on a sliding scale, those on the lower end of the income spectrum enjoy particularly significant subsidies. If you work for a business with over 50 employees, you are particularly lucky—as your employer must provide you with coverage.

Another tremendous ACA gift to the market is that it forced insurers to come up with new innovative options to lower costs. Health care “co-ops” in New Jersey (unlike in many other states), particularly Health Republic, is thriving, offering consumers better rates than conventional options. Other new options on the block include different “tiers” of coverage from insurers such as Horizon Blue Cross Blue Shield, which offer lower premiums if you agree to a slightly smaller provider network.

That said, most healthcare consumers with upper middle incomes and above find that their healthcare options are worse, a lot worse actually, than they were before ACA kicked in. Even plenty of their peers with lower incomes would agree.

One prime casualty of the ACA is flexibility—the ability to choose the plan you wanted, when you wanted. Previously, the health insurance market functioned like any private market. As long as you didn’t have a pre-existing condition and lapse of coverage, you were able to purchase coverage, or switch plans, at any time, and you had a wide array of options.

Now, however, your options are very heavily dictated and limited by the government. A whole range of popular low-priced plans with restrictions, such as catastrophic coverage plans, are no longer allowed to be sold to anyone over age 30. Additionally, you can only purchase new insurance or switch plans during a three-month open enrollment period, even if you are perfectly healthy. (The only exceptions to this limitation are if you get coverage through a business or if you endured a specific life circumstance such as loss of employment, termination of coverage, divorce, etc.)

And, of course, your right to remain uninsured has been hampered, as you now pay increasing penalties if you choose not to purchase insurance. You must report on your tax return whether you had qualifying coverage during the tax year.

Even the greatest benefit of healthcare reform—affordability—looks a lot less shiny beneath the hood. When you take subsidies out of the picture, premiums have risen significantly. You can now pay double or more for a similar plan compared to the pre-ACA era. If you’re paying the same price for a plan as you did a few years ago, chances are that it has a much higher deductible and/or inferior benefits.

In virtually every way, insurance coverage is more complicated today and there’s more red tape. For instance, you now need pre-authorization for prescription drugs to be covered. Another biggie is that two-person, husband-and-wife corporations can no longer qualify as a group in relation to health care coverage.

What’s Next?

Though President Obama pretty much fully delivered on the healthcare promises he made in 2008, the next president will have a much harder time doing what he or she wants to, since the entire industry has already been transformed by ACA and spurring new seismic changes may be a bit too much.

But let’s listen to what the major candidates say they want us to do, in order to give us some inkling of what we could expect.

Donald Trump—you knew we had to start with him!—started off by saying that we need to repeal Obamacare and replace it with “something terrific.” Thankfully, he’s gotten a little more specific. The real estate tycoon puts a heavy emphasis on removing barriers for the sale of insurance plans across state lines. This would likely help reduce insurance premiums by increasing competition. Mr. Trump also suggests allowing individuals to deduct their insurance premiums from their tax liability and to form health savings accounts, which are tax free.

On the Democratic side, the candidates are obviously a lot more supportive of the ACA, and we shouldn’t expect much change to what we’ve seen in recent years—either the good or the bad.

Hillary Clinton is the most supportive of the status quo, though she suggests some tweaks. One Hillary proposal is to offer the “public option” on health care exchanges, where consumers can choose an insurance plan run by the government. This would be instead of the co-op option, which is a hybrid between the government and private industry, and is struggling in many states. Mrs. Clinton also suggests various proposals to improve affordability, such as allowing tax credits to offset high healthcare costs that result from high deductibles and the like.

Senator Bernie Sanders is relatively anti-ACA. He wants a single payer “Medicare for all,” government-run healthcare system, similar to what Canada and Europe have. This would once again completely turn over our healthcare system, and put patients at even greater mercy of government bureaucrats.

One major argument that Hillary has used against the Sanders proposal is, in her words, “I don’t want us to be thrown back into a terrible, terrible national debate (over health care).” We may indeed see less drastic change to the healthcare status quo over the next four years than we saw over the past few years, but chances are that we’ll be debating the topic all over again—and then some!

For more information or for a free, no-obligation quote, please call 201-817-1388 or email [email protected].

By Mark Y. Herschlag

Mark Herschlag is the founder and CEO of Cosmo Insurance Agency, which is based in Ocean County. Cosmo Insurance Agency offers personalized solutions for individuals and businesses looking to obtain health, life, dental, long-term care or disability insurance.

 

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