Get my crystal ball
We begin our Trumpcare series with a look at some of its key features. And while nothing is written in stone, there are two leading proposals, the Patient Care Act from Senator Orrin Hatch and A Better Way by House Speaker Paul Ryan. Their plans share some common views on what adjustments are needed to fix our broken system. So let’s explore a few of the potential changes and get you ready for this health care overhaul!
A return to medical Underwriting
Under the Affordable Care Act, your rate does not depend on your health. So even if you have a serious medical condition, like cancer, you pay the same price as everyone else. While this may seem appealing, it has a major flaw. Namely that insurers are reluctant to take risks. And since they can no longer ask medical questions to identify unhealthy clients, they’ve simply made the rates high for everyone.
But Trumpcare is about to change all of that, with a return to medical underwriting. In fact, it has already begun. As two PA health insurers recently announced new plans that use your medical history to help determine rates. And while this is great news for some people, others worry that their prices will go through the roof. Or, worse, that insurers will decline them. But all of this anxiety may be for nothing. Since nearly all Trumpcare proposals pledge guaranteed coverage for all, through high risk pools. This will force insurance companies to cover people with serious health problems, for a reasonable price. Hence insurers can reward healthy companies with lower rates and at the same time not penalize those who have medical issues.
Selling health Insurance Across State Lines
President Trump wants health insurers to sell policies across state lines. And for good reason too, as more competition often leads to lower prices. But don’t expect quotes from a crowd of new insurers at your next renewal. Before these companies can offer plans in your area, they first need to develop a local network. This is easier said than done. Let’s take a brief look at how this works to understand why it can be a slow and difficult process.
First, the insurers must decide which doctors and hospitals to include in their network. This is often done through usage studies, which can take a while. Then, once they nail down which providers to work with, the contracting process can begin. In essence, the insurer reaches out to the chosen medical providers and attempts to negotiate contracts with them. This step can take a long time and also be quite costly for the insurer. So while selling coverage across state lines sounds good in speeches, in reality, it just isn’t very practical. At least in the short term. Take a look at this nice article from the Allentown Morning Call, which highlights these points.
While these two ideas may be key components, they are just the tip of the iceberg when it comes to Trumpcare. So be sure to sign up for our newsletter so you can stay on top of this fast moving legislation. And if you have any questions or concerns, feel free to leave a comment below.