This makes a lot of sense, thus it will never happen, unfortunately:
Fund the HSA deductible, as Indiana and Whole Foods do, and put real prices on everything.
The Affordable Care Act, according to co-architect Jonathan Gruber, was about coverage. As he put it, in his own words “we paid lip service” to cost controls. In fact, in the unsubsidized individual market, insurance premiums rose by 100 to 200% (that’s two to three times higher prices). This market is probably about 18 million people, plus another 6 million or so who remain uninsured due to the high prices and are not normally counted.
How expensive is the ACA market? For those in their 50s and up, premiums may cost thousands of dollars per month, with $2,000 or more being common. That’s $24,000 per year for a high deductible “insurance” plan – often meaning $30,000 or more out of pocket before receiving benefits. Surprisingly, the subsidy cut off level for 2020 is about $68,000 per year. If you earn this much or more, you are not eligible for any subsidy assistance. You’ll pay $30,000 out of pocket on your $68,000 pre-tax income – and you still need to pay taxes, housing, food and transportation costs.
Actual price quote, HealthCare.gov, 64 year old married couple living in Laramie, WY – this is the cheapest Silver plan.
How did this absurdity happen? Jonathan Gruber made numerous errors in crafting the ACA. One of which is that the subsidy cut off level is determined as a factor of the regional poverty income level. It has nothing to do with actual insurance prices. Gruber never envisioned insurance premiums rising so high, so rapidly. Thus we have absurd cut off levels having no relationship to actual prices of insurance!
Part of the reason prices rose so rapidly is because 35 state run high risk insurance pools were shut down and all of their high cost/high risk patients were moved into the ACA individual market. Prior to 2017, some of these high costs were shared with most insured people in the country. But beginning in 2017, these risk sharing measures were ended and the individual market had to share these costs exclusively, turning the individual market into a de facto high risk/high cost insurance pool.
For those that are subsidized, the Federal taxpayer picks up the extra charge. In fact, through various quirks, many subsidized consumers pay less than they did in 2014, and some even pay ZERO premiums – receiving insurance for free.
Meanwhile, those in the unsubsidized market have seen a doubling or tripling of their costs to the point they have been forced to drop out of the market. Much political ventings drones on about the Individual Mandate but that is irrelevant. The ACA itself exempts people from the mandate if the least cost Bronze plan exceeds about 8% of your household income. This turns out to be true for most families in their 40s and up and most married couples in their 50s and up.
The primary point of the ACA was to provide insurance access to the non-group market. Contrary to poplar misconception, the HIPAA of 1996 provided pre-existing condition exclusion protections to all those with employer sponsored insurance. Medicare, Medicaid and VA coverage already provided protection. Nearly everyone had pre-existing condition protections – except for the small non-group or individual market (actually about 24 states enacted their own forms of protection). The ACA provided those protections but at the expense of pricing millions out of access – which is a big miss for an Act whose title begins with “Affordable”. (Technically it was Patient Protection and Affordable Care Act but still…)
