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Reforming Obamacare: The Challenge Ahead for Mental Health

By: Paul Gionfriddo, MHA president and CEO

To contain costs, President-Elect Donald Trump has suggested replacing Obamacare with a package of benefits that might include:

  • Permitting Insurance to be sold across state lines
  • Retention of the mandate covering pre-existing conditions
  • Allowing young people to remain on parents’ insurance
  • Creating high-risk pools to provide insurance to people with chronic diseases
  • Using Health Savings Accounts (HSAs) as an alternative to tax credits
  • Expanding the use of high-deductible plans to lower premium costs

Several of the provisions could affect people with mental health concerns more than others. Let’s consider some of the challenges the President-Elect and Congress will face as they craft these – and other – possible changes to the Affordable Care Act (ACA). 

Covering Pre-Existing Conditions

Trump has been clear that he would retain this provision. It is a lifeline for people with all chronic diseases and conditions. However, these conditions are often expensive to cover. Unless you mix them in a plan that captures healthier people, too, costs will rise no matter what else you do.

Allowing Children to Remain on Parents’ Insurance Until Age 26

Trump also favors this. It’s very important to families, because so many serious mental health concerns begin during childhood. Here’s the challenge. What is life-saving for young people with serious health conditions is a provision that also keeps healthy, younger people out of the exchanges.That has helped to drive up the costs of the plans in the exchanges. If you can’t figure out how to get health young people into the exchanges, you make insurance more expensive for everyone else.

Setting Up High-Risk Pools

Trump has also suggested that new high-risk pools could be the answer for people with chronic diseases who need insurance. We had a high-risk pool in Connecticut when I was a state legislator in the 1970s and 1980s. It was expensive, and the only people who chose to be in it were the ones who absolutely knew that the insurance would pay out more than the premiums cost. Unless these risk pools are heavily subsidized and include some incentive for healthier people to join them, they probably won’t work.

Expanding the Use of Health Savings Accounts (HSAs) Coupled with High-Deductible Plans

Trump has suggested coupling HSAs with the use of more high-deductible plans to lower costs. In “exchange speak,” think more bronze plans. Here’s the way this might work. 

Assume that a single male with high healthcare costs who makes $50,000 per year buys a plan with a $10,000 deductible and pays $250 per month for the insurance. To use an HSA to cover those costs, he would deposit $13,000 into his HSA to cover the premium and the deductible. That would reduce his taxable income to $37,000. If he is in the 15% tax bracket, at the end of the year he would get back 15% of the $13,000 he deposited into his HSA, or $1,950.

Spending one-quarter of his income on health care to get back $1,950 would not make him feel too good about that high-deductible plan, and he would probably go uninsured.

Rolling Back Medicaid Expansion and Converting Medicaid to a Block Grant

Any debate about ACA change will include at least some discussion about rolling back the Medicaid expansion. This expansion has been a huge benefit to adults with serious mental illnesses.

Most states expanded Medicaid, including Michigan, Pennsylvania, Ohio, Iowa, and Arizona. The federal government is covering more than 90 percent of that cost. Trump has said that he does not want to roll back entitlements. Neither would the voters in these states.

Trump has also suggested converting Medicaid to a block grant.This could be done, because the Medicaid program is in reality fifty different state programs. But the question would boil down to this.  Would the federal government provide the full share of Medicaid payments to states in the block grant, or withhold a few percent, as it did with past block grants? Withholding even 5 percent of $550+ billion Medicaid dollars would have an enormous impact on state budgets and people in need.

The Challenge Ahead

The goal of ACA was to get more people insured, using the health care financing system that was already in place. 

The challenge ahead will be to keep them insured if ACA is changed. Probably the best way to do this –  Medicare for all – won’t happen anytime soon. But if the new President and Congress don’t walk a tightrope in making their changes, single-payer may come along a whole lot sooner than anyone imagines.

Comments

I should have figure that a millionaire(R) taking office would change benefits that help those that could not afford health insurance and return the saving back to those who have financial freedom, and those that make less then $15,000 dollars a year are again kicked to the curb. We are now back on track to where the wealthy don't have to pay higher taxes or high insurance cost and those of us who struggle in life to make ends meat are one again hung out to dry and have become a class of nobodies. So does this mean you are going to cut out The Mental Health & Substance abuse disorder parity task force? What other programs are going to be cut so that the poop can not afford to live in a home, have hot meals, warm clothes and living on the streets because now they have to pay more for medical and mental health or stop seeking that help because they can no long afford the care once again.

Greetings. My question is who benefits from serving the mentally ill, certainly not the patients. The food they are given is below the standard of any health care. Pizza for dinner, cornflakes and milk, coffee for breakfast, lunch 2 slices of white bread with a slice of package cheese and a slice of poison salami, cured ham or simmilar. a small water or a colored beverage. Something better must come, Lets see. The patients are so heavily medicated that they sleep a lot. NO REACREATION to keep the brain active.

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