Senator Cassidy (R-LA) likes to talk about one of his constituents when he argues against the ACA. This family has $40,000 of health care costs every year and they don’t get any help to pay for those costs.
This is a real and growing problem. The question is what policies improve or worsen the outcomes for families in this situation?
The Washington Post’s fact checkers chased down the family and their situation:
conservative talk-radio host named Moon Griffon. Cassidy invoked Griffon when he introduced the bill on Sept. 14….
Griffon used to get group insurance through an employer but then he moved and had to buy insurance on the individual market. He said he and his wife, a nurse, have a six-figure income, though “it’s not high but middle class.” They have two children: a 15-year-old son and a 20-year-old daughter who has seizures and needs to take four kinds of medicine.
There are a couple of ACA related items going on here. First, the family has a modified adjusted gross income of at least $98,000 and therefore they don’t qualify for subsidies. Secondly, they are keeping their daughter on the parent’s insurance. This is guaranteed by the ACA and was questionable pre-ACA. Third, their daughter has an expensive pre-existing condition but is covered.
They are paying too much for their insurance. And none of the policies that Senator Cassidy has voted for would improve their situation.
If the individual mandate is repealed the family is making too much money to qualify for subsidies still. The Congressional Budget Office (CBO) expects some healthier people to leave the risk pool. A sicker risk pool means higher premiums. Individuals and families who are subsidized are well insulated from the premium increases. The Griffon family would bear an extra 10% premium surcharge due to healthier people leaving the pool. They are worse off as they can get the same insurance at a higher premium.
Another Republican proposal is to split the risk pools by allowing for association health plans to proliferate as well as reintroducing limited duration plans with 364 day terms. In these cases, the new plans entire business model is predicated on effective cherry picking of low risk individuals. The Griffon’s daughter has an expensive and predictable disease. She would either be denied coverage or upcharged so that her premium would be more than her expected drug costs. The 15 year old might get a good rate and if the parents are in ideal health, they might see better rates although they currently benefit from the 3:1 age banding in the ACA and might be age banded at 4:1 or 5:1 in an underwritten policy.
Selling policies across state lines would not help the family either. The entire point of the sell across the state lines pitch is that it is a regulatory race to the bottom. Insurers would seek to set up shop in states that allow them to offer the skimpiest plans. This is a good deal for people who are healthy but that is not the case for this family. Skimpy benefits probably won’t be adequate for them. Non-skimpy plans will only have sick people in them so that means premiums will be higher.
There are a couple of different policies that could help this family. If states were to use 1332 waivers to fund reinsurance or prospective diagnosis based risk sharing, the index premium would decrease and premiums would be slightly more affordable for the family. Medicaid buy-in programs could also help lower premiums as Medicaid tends to pay providers significantly less than commercial providers.
The critical question in any health financing system is how are the people with consistent and known high cost needs treated. Are they left on their own? Are they shunted aside? Are they consigned to a life of poverty? Or is there a system that counter-acts the bad luck that they have so the opportunity space is as broad and deep for them as it is for anyone else.
Right now the health policy proposals floating around Washington for the past year narrows opportunity space for many people including those who were mostly left out of the primary beneficiary groups of the ACA.