The Senate this week is expected to vote on a tax bill that includes a controversial provision to repeal Obamacare’s tax penalty on the uninsured.
Democrats and some conservative policy analysts fret that if Congress scuttles the so-called individual mandate, insurance premiums will rise.
The reverse may be closer to the truth: Premiums for Obamacare policies next year will be so high that millions will be exempt from the tax penalty whether Congress repeals it or not. Even the skimpiest coverage now costs so much that many uninsured people with six-figure incomes will be exempt.
The individual mandate is repealing itself.
The mandate represented a grand bargain between the government and the insurance industry. Insurers agreed not to base premiums on applicants’ medical conditions, and in exchange, the government agreed to subsidize premiums and penalize the uninsured. In theory, the threat of tax penalties would induce healthy people to pay an unfairly high price for a product they wouldn’t otherwise buy, creating a stable insurance pool that would generate billions in profits for insurers.
It hasn’t worked out that way. Healthy people have largely shunned the exchanges, making the individual health-insurance market a losing proposition for most insurers. The number of people with individual policies, which grew during Obamacare’s first two years, has been shrinking since 2016. The erosion has been most pronounced among those who earn too much to receive premium subsidies.
So why aren’t more people who refuse to buy Obamacare policies forced to pay tax penalties? One reason is that the Obamacare statute does not permit the IRS to collect the penalty in cases where premiums would exceed 8 percent of an uninsured person’s income. That is a high bar: The average household spent 5.5 percent of its income on health-insurance premiums last year, according to the Bureau of Labor Statistics.
Read more at the National Review....
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Don and Debra Clark of Springfield, Missouri, are glad they have health insurance. Don is 56 and Debra is 58. The Clarks say they know the risk of an unexpected illness or medical event is rising as they age and they must have coverage.
Don is retired and Debra works part time a couple of days a week. As a result, along with about 20 million other Americans, they buy health insurance in the individual market.
But the Clarks are not happy at all with what they pay for their coverage — $1,400 a month for a plan with a $4,500 deductible. Nor are they looking forward to the Affordable Care Act's fifth open enrollment period, which runs from Nov. 1 through Dec. 15 in most states.
Many insurers are raising premiums by double digits, in part because of the Trump administration's decision to stop payments to insurers that cover the discounts they are required to give to some low-income customers to cover out-of-pocket costs.
"This has become a nightmare," said Don Clark. "We are now spending about 30% of our income on health insurance and health care. We did not plan for that."
Continue reading this story on CNN....
Health care spending in the United States increased by about $933.5 billion between 1996 and 2013, according to an analysis published Tuesday in the medical journal JAMA. More than half of this surge was a result of generally higher prices for health care services.
Joseph L. Dieleman, lead author of the study and an assistant professor at the Institute for Health Metrics and Evaluation at the University of Washington in Seattle, gathered information on 155 separate health conditions and six possible treatment categories: inpatient, outpatient (hospital), emergency services, dental care, prescriptions and nursing facilities.
The researchers also analyzed changes in five factors -- population size, aging, disease incidence, use of services, and service price and intensity -- as they relate to health care spending in the study period, 1996 through 2013.
"Intensity of care" refers to service variety and complexity. "It's the difference between a relatively simple X-ray as a compared to more complex MRIs and other forms of diagnostic services," Dieleman wrote in an email.
The analysis resulted in four main takeaways about why US health care costs rose.
Read more at CNN....
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