Thoughts on revising the ACA

There has been a lot of discussion around how to repeal/revise/replace the Affordable Care Act (ACA) by journalists, policy wonks & elected representatives. In this post I hope to contribute an on-the-ground operator’s perspective to that conversation.

At HealthSherpa we’ve enrolled over 750,000 people in Affordable Care Act (ACA) health insurance through our private exchange. We work with over 17,000 insurance agents and hundreds of insurance companies, so we have lots of data and experience to draw from.

Based on that experience, here are some simple, politically neutral, market-based reforms we think will help maintain access and improve the affordability of high-quality health coverage.

IMPROVE THE RISK POOL

1. Change the cap on the premium multiple from 3x to 6x. Currently a 64 yr old cannot pay more than 3 times the premium of a 21 yr old. Before the ACA, the market set that multiple as high as 11 times. Going from 3x to 6x would incentivize more young people to sign up, improving the risk pool and lowering premiums.

2. Get rid of SHOP, the small business program that isn’t working, and let small businesses help employees pay for coverage on the individual exchanges. This would improve the risk pool by adding a group of generally healthy people (lowering premiums), and could save small businesses money. Note that the 21st Century Cures Act addresses this in part by permitting small employers to utilize FSAs.

3. Go a step further than 21st Century Cures Act and let large employers subsidize coverage on the public exchanges. Many large employers don’t want to deal with managing their own health insurance plans?—?allowing them to subsidize public exchange coverage instead would improve the risk pool (lowering premiums) and could lead to large employers helping more of their employees get coverage (e.g. part-timers).

4. Require people to either maintain continuous coverage or wait 3 months after signing up for non-preventative care if they sign up outside open enrollment. This would reduce the big hit that the insurers are currently taking on people who wait until they get sick to sign up.

FIX THE MEDICAID GAP

5. Move the threshold for receiving subsidies down from 100% to 0% of the federal poverty level (FPL). Also create a new cost-sharing reduction (CSR) tier for these people. Having insurance isn’t very useful if you can’t afford your copay, and CSR addresses that. These two changes take care of people who can’t get coverage because their state didn’t expand Medicaid.

MAKE THINGS SIMPLER & CHEAPER

6. Combine the public exchanges into a single, federal platform. State exchanges have proved expensive and are slow to innovate.

7. Make the annual enrollment period run for the month of your birth instead of a fixed period every year. The current three-month window doesn’t work because people wait until the last minute to sign up, which creates huge call, email and web traffic volume spikes. This is difficult and expensive to manage. Some policy wonks have suggested a single open enrollment period when the law changes —that would be an operational nightmare and wouldn’t work.

8. Fold the Navigator program into existing agent/broker licensing initiatives and strengthen the mandatory code of conduct required of agents & brokers. This is likely to happen by default as Navigator funding will dry up, but some legislative cleanup will be needed to permit Navigators to receive compensation from insurers, and an effort should be made to migrate committed Navigator organizations to a more traditional broker-type model.

9. Make Healthcare.gov an open data platform where private companies can build Turbotax-like experiences on top of a common government infrastructure. This allows for innovative, channel-specific platforms that expand the reach of the exchanges, improving both consumer access and the risk pool.

10. Get rid of the nickname, “Obamacare” (and don't call the next revision "Trumpcare" or "Ryancare"). Those are far too politically charged terms for health reform, which is vitally important and historically has had broad bipartisan support.