Crazy week

The FEHBlog was visiting a client for most of the day today, and he returned to his office near 14th and K St around 3 pm.  It was pandemonium with pro-Trump and anti-Trump agitators. (A small anti-Trum rally marched down the middle of K Street during rush hour.)  The FEHBlog is glad that he is staying home in Bethesda on Friday.

The FEHBlog has been reflecting over the press-created uproar over impending changes to the Affordable Care Act. Let me share some thinking.

The FEHB Program is part of the large group market.  In 2010 when the ACA was enacted there were no serious problems with that market.  The small group market in which the FEHBlog participates was a little messy and the individual market was a mess.

Note of course that health insurance premiums in the large group market are 100% exempt to the managers and employees; those premiums are 50% taxable to owners in the small group market and are 100% taxable to people in the individal market (if they fall outside the ACA’s income limits (four times the poverty line).  This fundamental problem, which dates back to the World War II price control regime, never has been fixed.  Congress should level the tax playing field for all Americans.

But rather than playing small ball with the small group and individual markets, the Democratic Congress with the support of President Obama supported an unnecessary and massive across the board fix. As a result, the large group market, including the FEHBP, is overburdened with regulation, subjected to price regulation, and  forced, with OPM’s support in the case of the FEHBP, to provide one size fits all coverage including 100% reimbursement of many otherwise low priced items (which in turn significantly raises the cost of those items.  Health insurance should not be treated as a price support for health care services and products.).

The ACA’s changes such as the creation of the marketplace did not lower premiums in the small group and individual markets.  Consequently, in the FEHBlog’s view, give the Republican Congress, hopefully in consultation with the Democrat minority in Congress and of course the new President, a chance to fix the small group and individual markets. But leave the FEHBP and other large group plans out of that legal fix.

With respect to the individual and small group markets, the FEHBlog supports the idea of the subsidized marketplace but with more consumer choice in benefit design, much less price regulation, and as much frill removal as possible (e.g, kill the patient centered outcomes research institute).  He also supports expansion of government supported community health centers which can provide direct primary care in lower and even middle income communities.

It’s worth adding that the FEHBP is a group insurance market which in its over 55 year history has never imposed pre-existing conditions or late enrollment penalties like Medicare Part B.  Perhaps the newly designed individual marketplace should use a late enrollment penalty instead of the individual mandate. The bottom line though is that the marketplace needs more time to mature.

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