by Justin Leader
justindleader@gmail.com
The election is over. I, like many in the United States still feel a perpetual hangover from the previous 18+ months of partisan volleyball and rhetoric. A big question looming is what comes next for healthcare? President Elect Trump has made some substantial statements during his time on the campaign trail. One of his promises was to repeal The Patient Protection and Affordable Care Act (PPACA), commonly called the Affordable Care Act (ACA) or Obamacare. The question in my mind is not whether or not can he do it, but better yet should he do it?
Any of us who read the news, or social media feeds for that matter, can agree that there are many people out there angered by the rising cost of healthcare. This year in particular we have seen a massive surge in premiums, co-pays and deductibles for most Americans. In a lot of ways, our society typically needs someone to blame and for the most part, we have placed that blame with Obamacare. Having worked in the Healthcare industry as a consultant for a number of years, I do my best to bite my tongue when people fly off the handle bashing this law. While I disagree with certain aspects of PPACA, I do feel that there is some good that came from it. The biggest being that it is forcing creativity and exposing those to blame for the $1 Trillion in annual waste. The ACA truly is an access law allowing people who previously could not get healthcare, an avenue to get it. While the intentions of the law make sense, there were some huge mistakes and missed opportunities that I think President Elect Trump can capitalize on. Some, he has stated that he will enact. For that, I am excited and you should be too.
Let’s start first with the biggest misconception I see for the average individual. Typically it starts with “Obamacare insurance is going up!”. Obamacare is not an insurance. Obamacare is an avenue to purchase insurance. Obamacare does not set rates. Insurance carriers set rates. That being said, it is not that these carriers are not making profit. It is that they are not making as much profit as they are used to. Higher premiums allow for more profit. Carriers, drug companies and Pharmacy Benefit Manager’s (PBM’s) at the end of the day do not have to answer to the american people, they do in fact have to answer to their shareholders. This is a huge missed opportunity for Obamacare. The 85/15 (80/20 for small employers) rule was inserted into the law, with the best of intentions, however it left a wide open hole for carriers to increase their premiums while at the same time getting more creative with PBM’S and Pharma to share in what I can only call legal fraud. This rules states that 85% of premium must be paid towards claims with the other 15% towards advertising, salaries, etc. It is my hope that President Elect Trump and his advisers develop a strategy to stop the game of ever increasing sharing of profits based on the premise of higher billed charges, which has allowed for these key healthcare players to make more money and post record profits.
A fix that Donald Trump has proposed is a true free market regarding medications including access to drugs from outside of the USA. This is not a bad idea and should receive consideration. As a former drug company employee, I can tell you first hand that drug companies have special interest in the United States as well as our fractured system. Look at the price gouging that has occurred in the past year alone. While the average person pays a small copay at the pharmacy or via mail order (which is a repackaging up-charge scam), the average self-funded employer is paying $100’s if not $1,000’s on the back end. This trickles down to more cost to the employee and perpetuates a vicious cycle that has landed us in the situation we are in. This goes back decades, not just the past 6 years. I think we can all agree that our capitalistic society is built on earning a solid profit however, there is a difference when it is robbing employers and employees on a daily basis.
President Trump also has a great opportunity to follow through with his promise regarding pricing transparency, including free markets across state lines for insurers. What does this mean for the average Joe? It is something we have been promoting the past two years in our client’s defense. True price transparency with an established metric for reaching that cost, combined with the ability to compare cost vs quality, and an incentive to make an educated decision. There is even room for providers to have a substantial profit in the mix, the question is, will insurance carriers be ok with it, shareholders be ok with it and will lobbyists allow this to happen? One state that has taken action is Montana with great success and an estimated $26 Million in savings over the next 2 years. Models like theirs as well as those who are creative have led to mutually beneficial healthcare plan design for all stakeholders. For example, the average Joe can not only have a waived deductible, but perhaps even a cash bonus for making smart choices! Not to mention, reduced ongoing cost for employer/employee alike.
I would be fooling you as well as myself if I thought that fixing healthcare was going to be easy. President Elect Trump has a huge opportunity in the palm of his hands to take a law with faults, which was built with good intentions and surgically remove the cancer that has made it bad. The legacy of injecting $1 Trillion dollars back into the economy while preserving access to healthcare for many US citizens would be a beautiful one and a great start to our economic future.
– Justin Leader is Vice President of Business Development with Benefit Design Specialists, Inc. BDS is committed to a two-fold goal; delivering quality, cost-effective employee benefit plans coupled with hassle-free benefits management for our client’s HR departments. Transparent Health, By BDS is a solution that drives down Healthcare costs while giving complete investment transparency.
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