Now that the election is over, major overhaul or overturn of the ACA (Affordable Care Act) seems unlikely.  Accordingly, focus is shifting on how to implement the law in a manner that can actually work, as well on plans to amend the ACA to make it more realistic, palatable and functional.

In the end, the ACA will create a new complex bureaucracy which will be added to the already overly large and complex bureaucracy that already exists in the public and private sector.  The immediate focus is the set up so-called health exchanges within each of the states.  This has created  confusion both with states and insurers.  The federal government has yet to issue guidelines on what it considers essential elements of the types of plans which will be offered on the exchanges. Also, they have not indicated how they intend to formulate the premium structure outlined in the law.  Currently, the only premium guideline suggest a maximum mark up of 3x on premiums paid by older subscribers as compared to younger ones.  Yet, there is no definition regarding ages to use in the guideline.

The sad  part is that both of the issues need not exist at all.  The exchanges are being used because regulators (state and federal) will not move to an open market for health insurance. Such a market would be nationwide, allowing purchase of health insurance across state lines, as well as mandating guaranteed coverage for all applicants (meaning no exclusions, no pre-existing conditions etc).  Such a plan would eliminate the need altogether for these cumbersome exchange networks.

In terms of rate setting, state and federal regulators need only institute a single premium strategy which means that premiums are based on the totality of all subscribers which an insurer has in its market. This simple change (meaning no rating by age, groups or employers) allows premiums to  be set purely on a revenue needed basis with costs spread evenly amongst the subscribers.  Thus, some will pay a bit more and some a bit less, but the group rating nightmare which currently plagues health insurance would be eliminated.

Private health insurers are already mandated by the ACA to spend at least 80% of all premiums on actual health care. So the format to implement changes in rating policy industry wide already exists.  This site has argued from day one for a regulated utility model for health insurance with a gradual decrease in federally run health care programs.  In the long run, the budgetary issues facing Medicare and Medicaid would benefit from such an approach.

So the ACA moves along, and with it real problems . . . for which real health reform solutions do exist . . . if only the politicians would implement them . . .

With Obama Re-Elected, States Scramble Over Health Law – http://www.nytimes.com/2012/11/09/health/states-face-tight-health-care-deadlines.html?pagewanted=all&_r=1&

Obama’s reelection cements his healthcare law – http://www.latimes.com/health/la-na-healthcare-analysis-20121109,0,6639904.story

Republican governors scramble over next Obamacare steps – http://www.washingtonpost.com/blogs/ezra-klein/wp/2012/11/08/republican-governors-scramble-over-next-obamacare-steps/