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Health Insurance Law

Early Election Update

Besides gaining an extra day in February, there are two other major events that will happen this year: The Summer Olympics and the United States Presidential election.

Since we’re not into the Olympic season yet, we want to give you an early election update and a rundown on what it means for your healthcare.

Last week, we saw both the State of the Union as well as the outcome of the first Democratic primary. During his speech, President Trump presented his plans for healthcare, and Iowa highlighted two individuals: Mayor Pete Buttigieg and Senator Bernie Sanders.

While there is still uncertainty about the election itself, we thought it would be helpful to highlight three of the possible directions that healthcare might take, depending on the final results of the election in November.

 

Change Takes Time

Before we look at those three possible directions, it is important to understand that change takes time in Washington D.C. It takes 18 months from the signing of a new law before any major changes transpire. This means that if any changes arise, nothing new will take effect on your healthcare until 2022.

Take the Affordable Care Act as an example: it took 5 years to get rolling. We can expect any future changes to healthcare to do the same. For a more detailed breakdown, check our previous blog about how healthcare laws are made and changed.

 

1. Senator Sanders

Medicare For All is one of the most infamous bills to be discussed around healthcare. It’s appealing to many people, since Medicare is ranked as the most satisfying health insurance in America. Senator Sanders has been one of the leading voices for this model and if you have ever heard him talk, his candidacy puts significant emphasis on this topic.

The term “socialized medicine” is thrown around a lot, but whenever we are dealing with such a complex issue as healthcare, it is imperative to define terms properly. The correct definition of Medicare For All is “single-payer”.

“Single-payer” simply means everyone pays a tax and everyone gets healthcare. We won’t dive into economics today, but we will focus on the potential timeline and outcomes of this shift. While this change in healthcare would eliminate private insurance, the hope is that you would not lose your doctor.

This change wouldn’t take place overnight, either. On his current bill, Sanders proposes a 4-year rollout after full Congressional process, which means the earliest this would take impact is 2026.

 

2. Mayor Pete

Aiming for a more balanced approach, Mayor Pete does not agree with Senator Sanders. Instead, Buttigieg suggests Medicare For All… who want it. This take on healthcare is classified as a “public option” in which the government competes against the private sector.

The best example that we have seen of this “public option” is in the state of Washington. Starting in 2021, any insurance carrier in Washington that wants to sell individual products will also be required to offer the equivalent of the public option. Once this minimal requirement has been met, insurance carriers will then be able to offer higher coverage beyond that.

This approach to healthcare guarantees that everyone gets at least some level of coverage, but people still have the option to pay for improved products to meet their individual needs. Lower deductibles, affordable copays, and cheaper Rx would be the foundation of this public offering.

This model does not eliminate private insurance, but rather infuses standardization and competition into the market. If we were to follow Washington’s lead, we could expect a rollout as quickly as 18 months from when the bill would be signed into law.

 

3. President Trump

Last year, there were minimal increases and numerous decreases to the Individual Marketplace under President Trump. This is very different from the group insurance space, which still regularly sees double-digit annual increases.

There are a few things to consider with this data. Some would suggest the Executive Orders signed by the Trump administration is what allowed private insurance to compete. Data projects that over the next 3 years, the utilization of the Individual Marketplace will grow by 13 million.

The largest promise made by Trump was to protect individuals with pre-existing conditions. He suggested that no change will be made to Medicare and asked Congress to send him a bill to lower Rx drug costs.

Another area of concern the Trump Administration has addressed was price transparency. This could make a big impact on both price and how you buy your healthcare. It would allow people to “shop around” and force providers to compete against one another. This executive order goes into effect in 2021.

As the election cycle continues throughout the year, we promise to keep you updated on how it will affect your healthcare!