The Future of Health Insurance

Audio by: Karla Benitez

Story by: Grant Gordon

Infographics by: Ashika Sethi

 

 

 

President Donald Trump’s commitment to repeal and replace the Affordable Care Act is one of the most important and polarizing aspects of the early days of his tenure in the White House.

Trump’s health care decisions will have lasting effects on all Americans and on an industry that has seen immense changes over the last decade, including the implementation of the Affordable Care Act, also known as Obamacare, in 2010.

In January, Trump demanded that Congress immediately begin the process of repealing Obamacare, according to the New York Times.

Charles Silver, a health care law and policy professor at the School of Law at the University of Texas at Austin, believes that the Affordable Care Act simply exacerbated a pre-existing problem in American health care.

“Even before Obamacare came around, we were spending twice as much as other developed countries per person on health care, but we were getting substantially worse results,” Silver said in an interview.

Silver said that the Affordable Care Act included a Medicaid expansion that provided coverage to about 20 million previously uninsured people. He said Obamacare also eliminated the policy that allowed health insurance companies to deny coverage to high-risk, unhealthy individuals, which included another 10 million Americans in health insurance plans.

“When you take an existing system that is dysfunctional and incredibly expensive, and dump 30 million new people into it, the predictable result is it’s going to be a disaster,” Silver said. “It’s not going to change anything structurally that would make life better.”

Silver said the expansion of the flawed system only caused costs to rise, as healthy people are forced to subsidize the cost of providing insurance for sicker people who generate regular expenses. Richard Craycroft, an Austin-based small business owner, experienced those problems first-hand.

Craycroft runs a real estate inspection sole proprietorship, and he has always provided health insurance for himself and his family.

“We’ve had almost a 300 percent increase in the cost of our insurance in five years,” Craycroft said in an interview. He attributed this increase to his “gigantic deductibles,” and said his insurance plan has not changed despite the price increases.

Craycroft is one of 14.3 million Texans who does not receive health insurance through his employer, according to the Kaiser Family Foundation. 4.3 million Texans are left uninsured, which is the highest mark of any state.

Under the Affordable Care Act, individuals are forced to pay more and more for health care plans that have remained largely unchanged. However, Silver said a repeal of Obamacare would put the 10 million high-risk individuals who were guaranteed coverage under the Affordable Care Act in a very difficult position.

Before the implementation of the Affordable Care Act, high-risk individuals turned to state pools, which provided state-subsidized health insurance to those who were locked out of the individual insurance market due to pre-existing health conditions. But Silver said most states abolished their high-risk pools after Obamacare was put into place, as high-risk individuals gained access to coverage on the private exchanges.

Silver said high-risk individuals may “find life very difficult” if the Obamacare coverage guarantee is repealed.

“I do not know where these people are going to turn,” Silver said.

Neither Silver nor Craycroft can predict what steps the Trump administration will take for a new health insurance policy. Craycroft proposed a “cafeteria plan,” where individuals can pick and choose the specific types of insurance.

“You choose a plan that’s right for you, instead of some government-mandated one-size-fits-all plan,” Craycroft said. “Because it doesn’t fit everybody.”

Silver hopes the health insurance system moves in the free market direction of the retail health sector. He said plastic surgery, for example, is not covered by insurance, but costs have been stable throughout history due to price transparency that is not available in the health care industry.

Whatever the Trump administration decides for a new health care policy, it is certain that a new law will have long-lasting and wide-sweeping effects. Unfortunately, Silver does not believe those effects will have a positive impact.

“I do not lament the repeal,” he said, “but I don’t think the repeal will fundamentally improve anything; it’s just going to return us to a system that was thoroughly dysfunctional before.”

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