The good news is that the Republican tax reform passed in December will end the mandate to have government-approved health insurance coverage beginning in 2019. The bad news is that, unless Congress acts — or unless states decide to work around the law — individuals won’t have any good policies to buy.
The Affordable Care Act, or ObamaCare, required all health insurance to cover a list of “essential health benefits.” In addition, ObamaCare imposed numerous burdensome regulations on the health insurance industry — including the requirement to accept anyone regardless of health status, administrative-cost price controls and no lifetime limits.
Those mandated coverages and requirements made ObamaCare coverage very expensive. Thanks to tax reform, individuals beginning in 2019 will no longer be required to buy that coverage or face a penalty tax.
But that means millions of Americans will want to buy good coverage that is less comprehensive than ObamaCare, much like they could buy before most of ObamaCare’s insurance changes began in 2014. Unfortunately, people won’t be able to because ObamaCare prohibits insurers from offering such coverage unless it dots every “I" and crosses every “T” required by the ACA.
To be sure, there are some options available. There are “bridge policies” meant to help people meet a short-term gap in coverage, as when a person changes jobs. There are also limited-benefit plans that will pay a fixed amount if a patient needs medical care — like $1,000 a day for a hospital stay or a specified amount if a person is diagnosed with a covered disease such as cancer. And there are several “sharing ministries,” which have grown rapidly in the past few years because people wanted an ObamaCare alternative.
But offering a comprehensive policy that includes most but not all of ObamaCare’s mandates is not allowed under the ACA.
Or maybe not.
Idaho recently announced it will test that understanding of the law. The state plans to allow insurers to offer comprehensive coverage outside of ObamaCare exchanges that does not include all of the mandates. The state’s Blue Cross plan has said it will participate, but it’s not clear that other insurers will be willing to offer such plans without assurances from the feds. And the state’s effort will almost surely be challenged in court. At this point, it appears the Department of Health and Human Services is taking a wait-and-see approach.
Congress could smooth this process considerably by allowing insurers to offer nonqualified coverage.
No doubt ACA defenders will object, claiming that would mean a return to millions of Americans having what Democrats referred to as “junk insurance.”
But even President Obama understood that most people were satisfied with their health plan before passing ObamaCare, which is why he kept stressing “if you like your health plan, you can keep it.” Politifact chose that assertion as its 2013 “Lie of the Year.”
By allowing pre-ObamaCare policies to return, Americans could choose good, albeit non-ObamaCare qualified, coverage once again — just as millions had before their policies were canceled. And it wouldn’t be “bare bones” coverage. Every state imposed their own mandated coverages in the individual market, and those mandates would still apply.
While Republicans would almost certainly support such a change, could they get 60 votes in the Senate?
There are 10 Democratic senators up for reelection this year in states won by Donald Trump. They may be willing to vote to allow other insurance options, especially since such a change wouldn’t eliminate ObamaCare exchanges or the federal subsidies available for qualified plans.
Alternatively, Congress could clarify that state insurance departments do have the ability to approve non-ObamaCare qualified coverage for those who want and need that option, which is what Idaho is trying to do.
Democrats, echoed by the media, complained that eliminating the mandate to have coverage would result in millions of Americans dropping their coverage. But many of them who will be otherwise uninsured would be willing to buy their own coverage if there were affordable options — just as millions did before their policies were canceled.
Republicans took a huge step by ending ObamaCare’s onerous mandate. But the freedom from having to buy expensive, government-approved coverage doesn’t mean consumers have the freedom to buy what they want and need. State challenges like Idaho’s may win this battle, but it would be better for Congress to step in to ensure that insurers can offer consumers what they want.