As an insurance broker here in Illinois, I have witnessed individual insurance premiums increase 150-200% since 2013. It is true that prior to 2014 some clients were declined for coverage, but 80-90% of those that applied were issued policies. Anyone declined for coverage could obtain a Blue Cross PPO policy via the IL CHIP program which was self-supported via higher premiums. Pre-existing conditions were also covered. The IL CHIP program was very popular. The ACA kicked in for new policies beginning Jan 1, 2014, when medical underwriting was no longer allowed for new policies. The IL CHIP program ended, as it was no longer needed.
While some did benefit from the ACA doing away with medical underwriting, reasonably healthy individuals and families with modest incomes (not eligible for ACA subsidies) would tell you that the ACA has been a disaster. Why? Because their good health history could no longer be considered by insurers. The ACA, in effect, eliminated the incentive to maintain a healthy lifestyle.
Instead, the ACA has favored the previously uninsured, especially those with lower incomes and hence eligible for subsidies or Medicaid, at the expense of healthy individuals and families that had insurance prior to 2014, and still maintain coverage now. They were told their premiums would decline. Who speaks for them? Not the House. And not the Senate. And so far, not the Administration. They are the truly unrepresented in the current debate. The ACA replacement proposals presented so far will have little, if any, impact on premiums. Why? Because medical underwriting is still not allowed.
A return to medical underwriting coupled with complete freedom on the part of insurers to offer whatever plans the want would result in dramatically lower premiums for those that have been hurt the most by the ACA. This would perhaps be one of the biggest effective tax breaks in history. For those with significant medical issues (and with it, higher premiums), a separate high-risk pool, similar to the old IL CHIP program could be provided. No one could be declined for coverage and all pre-existing conditions would be covered. Premium assistance could be continued for those at lower income levels, and for others with significant medical issues, to offset the higher premiums based on medical underwriting.
Overall premium reduction would increase the number covered by insurance. Wasn’t that the goal all along? What is the House, the Senate, and, at least so far, the Administration afraid of? And why would the Democrats not want to be part of a plan that would lower premiums and decrease the number of uninsured? Why is this not even being discussed? In part, they do want to explain that a higher insurance underwriting risk means higher premiums. In every other line of insurance, higher risk means higher premiums. We do not dispute this with auto insurance, life insurance, or homeowner’s insurance. But health insurance is now exempt. The fact that the ACA did not allow insurers to underwrite medical risk has now resulted in them exiting the market for individual insurance. I wonder what took them so long. Yes, they are partly at fault, but let’s face it, selling insurance without underwriting is a risky business. Their losses have been staggering, despite massive premium increases.
Perhaps the only person left in America that can make premium reduction the number one goal for any ACA replacement plan is the President. Mr. President, will you speak for those that have been hurt the most by the ACA? You have mentioned several times that the Democrats have not been very helpful in the current debate. Perhaps that’s because there hasn’t been anything presented yet in the House or Senate that could make a big enough positive difference with their constituents. But even they could not ignore an ACA replacement plan that could save individuals and families in their state hundreds of dollars a month on insurance premiums. And that is what you will have with a return to medical underwriting and new plan designs. You will have the votes.