by David Miller, MBA ’14
Examining the healthcare plans of both presidential candidates, associate professor Bill Custer gives voters something to think about.The 2016 presidential election cycle hasn’t had much focus on the issues; however, one member of the town hall audience in the second presidential debate asked a question about the Affordable Care Act. He wanted to know what the candidates plans were to combat rising costs and declining coverage.
His comments have been picked up by publications at both the national and local level, by academic research journals and general news organizations.
“Healthcare hasn’t received much coverage this election cycle,” Custer said. “Healthcare is a difficult, complicated subject with a lot of moving parts. It’s not easy for politicians to talk about, and it is not easy for consumers to get enough information about, especially in an election cycle with so much going on.”
Custer says that any discussion about healthcare and healthcare reform obviously has to start with the Affordable Care Act (ACA).
“The ACA increased the number of Americans with health insurance,” Custer argues. “It has affected millions of Americans in a positive way.”
In Custer’s opinion, the replacement for the ACA must have a minimal impact on the number of insured Americans; however, he also notes that the impact of any changes will not be felt in 2017 but in 2018 and beyond.
The two candidates obviously have very different approaches to the Affordable Care Act. In response to the question in the second debate, Hillary Clinton said, “I want very much to save what works and is good about the Affordable Care Act, but we’ve got to get costs down. We’ve got to provide additional help to small businesses so that they can afford to provide health insurance.”
“Obviously, there are technical fixes that need to be made, but those are not the most serious issues facing the exchanges,” says Custer.
Custer explains that the healthcare exchanges create a marketplace. The ACA removed a limit on pre-existing conditions that has caused an inefficiency in this marketplace.
“Insurance companies have faced increased costs from covering individuals with pre-existing conditions,” Custer said. “Individuals who were cheaper to insure were supposed to offset the risk, but that has yet to happen. As a result, insurance companies have decided to leave exchanges in states where they are losing money.”
The ACA implemented mechanisms that were supposed to offset some of these risks, like the reallocation of the premium income to companies that obtained bad risk pools. Custer points out that the risk adjustment mechanism of the ACA has not worked as intended and is in the process of being overhauled.
He suggests that Clinton could institute a public option in the exchange that would compete against the private companies, but cautions that if this is the cheapest option, the increased risk would fall on the taxpayers.
On the other hand, Donald Trump is proposing to repeal the entire act. “We have to repeal it and replace it with something absolutely much less expensive and something that works, where your plan can actually be tailored,” Trump said.
Trump continues to propose removing boundaries on competition for insurance; however Custer says this already has occurred and hasn’t worked.
In his July article for The Conversation, a publication where academics write about current events with a journalistic bend, Custer wrote, “Trump’s proposal means that insurers licensed by one state and obeying that state’s laws could sell coverage in another state. That potentially would allow insurers to ignore the other state’s laws. This proposal would allow insurers to choose those states whose laws give them the greatest ability to manage their risks.”
Legislation similar to Trump’s proposal has already been passed because of the ACA. “In 2011, the state of Georgia was the first state to pass a law similar to this proposal, but it has not found insurers willing to offer this coverage. At least 20 other states have since followed suit, but insurers are not sure they want to do this.”
Custer says that healthcare delivery is evolving. “Insurance companies are used to covering financial risks,” Custer said. “Now they are increasingly held responsible for quality of healthcare. As a result contracts are much more complex and involve networks to keep costs down. It’s difficult to write contracts that apply in different places.”
If the ACA is not repealed, one part of Trump’s proposal allows individuals who purchase coverage outside of the workplace to do so with pre-tax dollars. “With the ACA in place, this proposal would lower the cost of coverage for many individuals and increase the number of individuals with health insurance,” Custer writes.
Despite the lack of coverage of the candidates’ stance on the issues by the media, Custer encourages voters to research.
“It will take years to fix the healthcare system in this country. Understanding the facts will help voters decide which candidate’s proposal matches their views.”