Opinion

Trump Should Give Us Real “Catastrophic” Health Insurance

Joanne Butler Contributor
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There are two paths to healthcare reform for President-Elect Trump: the huge legislation way (e.g., the method that brought us Obamacare), or what I call the Ted Kennedy way – incremental but constant changes.  Teddy’s way was stealthy – inserting a clause into one piece of legislation, deleting a clause in another.  For Trump, I think Teddy’s way has a better chance of success than a blockbuster bill stuffed with goodies to get enough votes for passage.  If Trump decides on an incremental approach, catastrophic health insurance would be a good first step.

Can people buy catastrophic health insurance under Obamacare?  Yes, but the game is rigged to discourage people from doing so.  Only those under 30 or those who qualify for a hardship exemption may purchase catastrophic insurance.  Plus, low-income people don’t receive a premium tax credit for choosing catastrophic coverage.

My suggestions for making catastrophic insurance more attractive include:

First, lift the age limit to 65 (when Medicare coverage starts).  Legislatively, this is probably not do-able, but there should be common ground to found somewhere between the ages of 30 to 65.

Second, make catastrophic plans truly catastrophic.  Under Obamacare, catastrophic plans must cover certain services, such as mammograms.  Thus Obamacare so-called ‘catastrophic’ insurance is often priced at a similar level as the lowest-cost ‘bronze’ plan, especially if the buyer qualifies for a premium subsidy.

To makeover ‘catastrophic’ coverage, the Trump Administration should:

  • Strip out the Obamacare mandates,
  • Allow people to purchase insurance across state lines, and
  • Negotiate with Congress regarding when catastrophic insurance coverage may begin but allow insurers to sell products with a higher deductible. Under Obamacare the deductible is $6,850, but a $4,000 or $5,000 deductible may be more attractive.  Likewise, others may want a higher deductible, e.g., $10,000.  Let the consumer choose.

Third, allow low-income people to use the premium tax credit for buying catastrophic insurance.

Tackling catastrophic insurance first makes sense as it provides more market-oriented options for people, and (for the time being) can stand alongside Obamacare while Republicans work out an alternative.  If people want Obamacare gold-silver-bronze coverage, they can buy it; if not, they can choose a catastrophic plan that suits their needs.

I believe a wider, more flexible catastrophic healthcare plan makes sense in the 21st century marketplace, especially for those under 50.

Here’s what I envision:  competition will drive national insurance firms to link to pharmacies and mini-clinics to attract more customers.

For example, a person buying catastrophic insurance from Company X will get prescriptions at a discount from the ABC drugstore chain and its in-store nurse practitioner clinic services.  The Company also could have discounted linkages to providers of mammograms and obstetrical care, or low-cost add-on policies.

Consider the typical services a healthcare consumer buys:  a doctor visit for a bad cold or stomach ache, bruises and sprains, a skin rash, vaccinations, etc.  If the condition/service is simple, the in-store nurse practitioner can deal with it, and, if need be, write a prescription for it.

It’s similar to what dentists learned long ago:  increase your daily patient load (and income) by having someone else (who costs less) do the routine work.

Under a reformed catastrophic plan, could people still have access to routine healthcare?  Yes.  Would it involve a close doctor-patient relationship?  No.

But not everybody wants or needs a close doctor-patient relationship.  And it should be the consumer’s choice as to how they want their healthcare delivered.

Tackling a behemoth like Obamacare will be tough and time-consuming.

If the President-elect wants faster success in the healthcare area, he should consider doing it Teddy’s way:  one chunk at a time.  I think overhauling the catastrophic health insurance sector over the next two years has a better chance of success than getting a bill passed to completely replace Obamacare.

Catastrophic health insurance is the low-hanging fruit in health reform.  President-Elect Trump should grab it while he can.