The Two Tiny Changes the ACA Needs

There are two things the ACA has failed at, and they are almost inextricably linked.

The first is addressing the very basic health needs of young Americans, who rightfully feel like more is being asked of them, even as they are just starting out.

The second is the public perception of the mandate- the idea that you could have no insurance, be charged a sizeable fee, and that you still have no coverage to show for it.

Young Americans have been asked to carry a heavier burden than is their due in regard to health coverage.1  They cost the least to insure, and their policies are more expensive than they’d otherwise be because they’re subsidizing coverage for the 45-64 crowd.

The mandate has been garbage since day one.  Even when it functions perfectly, in a state that expanded Medicaid as expected, there has been a little pocket of people who make too little to afford a plan, but enough that they don’t qualify for Medicaid.  These people will get stuck paying a significant fee, and this fee will be in part used to pay for subsidies that go to people that make more than them and now have health care coverage.

That should be impossible.  The idea in itself is infuriating.  It’s why I spent the first couple of years after the passage of the ACA railing against it.2  It’s also completely unnecessary.

Here’s the thing:  I get the reasoning for having a mandate.  Without a mandate-like device, requiring insurers to cover pre-existing conditions is essentially like allowing people to purchase car insurance after the crash.  The trouble is, the mandate doesn’t work.  It doesn’t force people to purchase insurance- it is merely an annoyance for those that can’t afford to.

That said, health care is not an ‘if’, but rather a ‘when’.  Not having health coverage of some kind is like not having liability coverage on your car.

You might say, “But…  if I get sick and can’t pay, how does that hurt you???”

Have you ever seen a sign that says, “To Keep Prices Low, We Prosecute All Shoplifters!”?  Well, because of EMTALA, we have essentially legalized shoplifting in the field of healthcare.3  The hospital / doctor / whoever is not going to consistently take a loss- they’re going to increase costs across the board to make up for it.4

So, what is simple and fixes both of these issues?  Integrated Baseline HSA’s and the use of mandatory Catastrophic Care plans in place of the mandate.  Baseline, in that everyone should have HSA’s administered by the IRS into which we can deposit up to 10% of our pre-tax income up to $100,000.  Integrated, in that our HSA works with our insurance plans so we can select a deductible as high as 75% of our current HSA balance, which, depending on that amount, could drastically lower our premiums.

Imagine a few scenarios:

  1. You have a $10,000-deductible catastrophic plan that pays out a max of $1,000,000.  It costs you $50 a month.  This is on-point with what existed before the ACA, and it’s close to the same price over a year as the mandate fee.  It offers you some protection, and the system a lot of protection.
  2. You have a year-one plan that costs, after subsidies, $300 a month, with a $1,500 deductible.  At the end of the year, you might have $1,500 in your HSA, so the following year, you get the same coverage, but with a $3,000 deductible, and it’s now $260 a month.  At some point in the future, you could be conceivably paying $80 a month with a $15,000 deductible, fully funded through your HSA.
  3. Things are like they are now.  You make just enough to not get Medicaid.  You can’t afford insurance.  You go to the emergency room for a broken arm.  It costs you $2,500 out-of-pocket.  At the end of the year, you get dinged for $700, even if you paid off your bill.

There are no magical solutions to health care.  Even single-payer has to have a payer. I’ve never been a huge fan of the ACA- I think they could have done more with less.

That said, it is almost always easier and cheaper to do proper maintanence than it is to ‘buy new’.  To keep up with the car metaphor, we are currently waiting on paperwork to clear in order to buy my wife’s new-to-her car…  Imagine if the ‘replace’ component of ‘repeal and replace’ gets delayed- 20,000,000+ people without health coverage, waiting on ‘paperwork’…  Or we can get the ACA an oil change and a couple new tires.5


Oh yea- I almost forgot…  States that decided to not roll out the Medicaid expansion?  Yea, ya’ll need to get with the program.  Stop hurting your residents to score political points for the home team.

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