The return of junk insurance

Catastrophic Plans

By Phil Mattera for the Dirt Diggers Digest

During his private-sector career Donald Trump floated many dubious business ventures, and now as president he is pushing his biggest bait-and-switch scheme yet.

Having run for office on promises that he would improve healthcare and protect safety net programs such as Medicaid, he is now embracing and promoting a Republican replacement for the Affordable Care Act that would do exactly the opposite.

Throughout the campaign, Trump made it abundantly clear that he wanted to repeal the ACA, which he repeatedly described as a disaster, and with his typical hyperbole promised voters: “You’re going to have such great healthcare at a tiny fraction of the cost, and it is going to be so easy.”

During the transition he said that the replacement plan would seek to provide “insurance for everybody.”

Trump exploited the real frustrations of many people with the ACA — frustrations that were largely the result of Republican intransigence that prevented the inclusion of a public option, blocked any legislative fixes and precluded Medicaid expansion in many states. He implicitly promised that a replacement plan would do more.

When Trump stated on February 27 that “nobody knew health care could be so complicated,” he was in effect signaling that the bait phase of his con was over and he was moving on to the switch.

Now he has dropped the extravagant promises and has joined the House Republican rush to enact a repeal and replace plan supposedly made urgent by the imminent collapse of Obamacare.

The House legislation has not yet been officially scored by the Congressional Budget Office, but it is widely anticipated that it will result in a loss of coverage for millions of people and sharp increases in premiums for many of those who hold onto their plans.

Yet there is another issue that is receiving less attention: the quality of coverage for those who remain in the individual marketplace.

For now, the Republican plan retains the ACA’s list of essential benefits (preventive care, etc.) that must be included in any individual or small group plan, but it is possible that could be bargained away to placate social conservatives who don’t like the provisions relating to reproductive health.

Trumpcare does not, however, include the ACA’s cost-sharing provisions that cap out-of-pocket expenses in plans obtained through the exchanges by persons with income below 250 percent of the federal poverty line.

As a result, these people could very well be subjected to sharply higher deductibles and co-pays.

This points to the little-acknowledged aspect of the assault on the ACA: at the heart of the Republican “solution” to rising premiums is giving people the ability to purchase lower-cost but substandard coverage.

In other words, they want to return to the pre-ACA situation in which insurers could sell bare-bones policies that provided little or no cost reimbursement except in cases of major illnesses or accidents — and might be skimpy in those situations as well.

It is significant that Republicans keep quoting Aetna CEO Mark Bertolini in perpetuating the bogus claim that the ACA is in a “death spiral.”

Bertolini is hardly an objective observer.

He used misleading negative comments about the ACA to try to deter the Obama Administration from its opposition to Aetna’s anti-competitive acquisition of its rival Humana, which was recently blocked by a federal judge who accused the company of dropping out of the ACA marketplace in several states to “improve its litigation position” in the merger dispute.

Aetna is also the company that was one of the biggest promoters of bare-bones policies in the pre-ACA period.

It got into the business, also known as junk health insurance, two decades ago through the purchase of U.S. Healthcare, an HMO whose bare-knuckles practices Aetna adopted in full and thus found itself the target of a series of class-action lawsuits brought by patients as well as providers.

The substandard policies sold by Aetna made up a substantial portion of the plans that were banned by the ACA. The people who had to give up that “coverage” became symbols of the supposed oppression of Obamacare.

Although they try hard to hide the fact, Republicans — and now Trump — are setting the stage for a resurgence of the bare-bones policies under the banner of affordability. That will be catastrophic coverage in every sense of the word.