In just five days, the Affordable Care Act, which you may know best as Obamacare, is scheduled to open for its second year of enrollment.
But, Obamacare isn't perfect, and both sides of the political aisle have expressed interest in seeing certain aspects of the healthcare reform law changed to improve it. What factors could make Obamacare better? That's the question we posed to three of our top healthcare analysts. Here's what they had to say.
Keith Speights: Identifying one and only one thing to change about Obamacare isn't easy. If push came to shove, though, relaxing the minimum requirements for plans would probably be at the top of my list.
Obamacare currently requires that every health plan provide certain "essential benefits." Some of these benefits are fine, such as ensuring that all health insurance covers hospitalization and emergency services. Other minimum requirements are questionable, however. Does a 25-year-old man really need maternity coverage? Does a person with no children need a plan that includes pediatric services? Under Obamacare, they do -- and that doesn't make sense.
These minimum requirements caused a large number of plans to be canceled by insurers late last year. WellPoint (NYSE:ANTM), the nation's second-largest health insurer, canceled plans in at least six states because the plans didn't comply with Obamacare.
There are two big reasons to relax the requirements. First, a one-size-fits-all approach doesn't meet individual needs effectively. Many of those WellPoint customers probably liked the plans they used to have. Second, the requirements make health insurance more expensive than it would otherwise be. More options and lower prices sound like steps in the right direction to me.
Todd Campbell: Obamacare could be improved in a number of ways that could avoid its dismantling. The most obvious way would be to make sure that the IT infrastructure behind it works, but a less obvious -- and highly controversial solution -- would be to break down the intrastate barriers that prohibit insurers from bundling plans across state lines.
Currently, every state has its own insurance regulator and insurers like WellPoint and UnitedHealth (NYSE:UNH) have to work with them individually to set rates and meet state-by-state coverage mandates. The argument for maintaining that status quo is that state regulation allows individual states, like New York, to put in place extra consumer protections that might not otherwise be available to consumers in other states, like Mississippi. However, the ACA already mandates basic coverage, so that argument holds less weight in my mind today than it did a decade ago.
If invisible faces were torn down between states, insurers could pool patients together, and that could mean residents in small states -- or states with higher cost populations -- could end up paying less. At a minimum, setting up regional corridors could even have a big impact. For example, Rhode Island, Vermont, and New Hampshire are among states with the least competition in individual markets, and as a result, their citizen's health insurance premiums are among the highest in the country. Creating a New England corridor could allow for those small, higher risk populations to be combined with Massachusetts and Connecticut, which could arguably lower premiums. Unfortunately, such a move is unlikely given that states are notorious for maintaining, not tearing down and giving away, their regulatory authority, but that doesn't mean it isn't an idea worth trying.
Sean Williams: With open enrollment for Obamacare set to kick off its second year in a matter of days, if I were playing lawmaker, I'd like to see regulators remove states' decision-making ability over whether or not to expand Medicaid and simply make it a nationwide expansion effort.
As it stands now, about half of all states have chosen not to take federal money and expand their Medicaid program. While expansion might seem like a no-brainer, beginning in 2016 and continuing through 2022, the federal government had planned on partially scaling back its contributions to states to help pay for their Medicaid expansion. In other words, the onus of covering these individuals would start to fall on the states themselves, and some, like Texas, simply believed those extra costs were too much to bear.
However, denying federal money and Medicaid expansion has left millions of low-income Americans in the so-called "Medicaid gap." They make too much to qualify for traditional Medicaid, but not enough to register on the subsidy scale. Even with a subsidy, there would be no guarantees that they could afford health insurance. On the bright side, these individuals are exempt from any individual mandate penalties because of their income, but their chance of getting healthcare coverage is slim to none.
Eliminating state choice and making Medicaid expansion mandatory would greatly reduce the number of insured nationwide, minimize the number of doubtful accounts hospital and medical facilities deal with (which could allow them to keep more of their revenue and purchase new equipment), and possibly promote healthier lifestyles, as insured people would be more apt to get regular checkups with their doctor.