HEALTHCARE: THANKS FOR YOUR SUPPORT

VOTING FOR 'CHANGE' RESIDENTS IN THE GHSS AREA STRONGLY SUPPORTED THE CANDIDACY OF PRESIDENT TRUMP AND REPUBLICANS IN GENERAL

We've seen a lot of change in the past hundred or so days and more is yet to come.

Of most immediate concern to Seniors is health care. I guess the desire for change included an understanding that the Affordable Care Act would be abolished  Replaced by something that President Trump  predicted would be (I paraphrase here) 'Great!'

Well, here's how the New Health Care is looking for New Hampshire seniors. Remember, New Hampshire is the second oldest state in the Union. That's important.

 AARP estimates that premiums  will go up  by an average of $7000 per year for a 65-year-old senior who has an income of $25,000. 

That's a big  'thanks for your support'  to New Hampshire's growing population of seniors from the new agents of 'change.'

One of the problems with the ACA was that younger, invincibles were gaming the system, not buying insurance in the face of piddling penalties (the hated mandate).  In theory, making people pay a lot more if they don’t buy insurance as soon as they need to will make healthy people join the market. If they know it will cost a lot more if they wait until they are sick, or if they know it will mean they won’t have community ratings if they don’t purchase plans early, they should buy in. If they don't, expenses are shifted  toward sicker and older folks like us who need and use health care.  The penalty was not nearly  strong enough to induce enough young folks to sign up (although toward the end of the Obama administration, increasing numbers of the young were signing up).

Under the new Republican proposal the 'stick' to induce younger people to buy insurance, an essential element in keeping insurance premiums manageable, is a one-time 30% insurance markup if people lose continuous coverage. This 'stick' is at best ineffectual. 

To quote from "The Incidental Economist" http://theincidentaleconomist.com/):

it's  "a tiny, tiny penalty in the scheme of things.

Let’s say I’m single and I’m in my late 20’s, and insurance costs me $3000. With the promised $2000 subsidy, I’d have to pay $1000 more to get insurance. Or… I could just forego it this year, and if I need it next year, it will cost me $3900 (I will owe $1900). In just one year, I make money. If I skip a number of years, I can save even more. I’m not sure this is much of a stick.

They could fix this by increasing the size of the stick or by sweetening the deal with carrots, but they didn’t.

Moreover, the incentive is totally in the wrong direction. The individual mandate punishes those who don’t buy insurance – every year. As long as I remain uninsured, I will be penalized. I will be hit again and again, until I buy insurance. That’s a stick.

The new AHCA penalty works in the opposite direction. Once I’m out of the market, I’m left alone. It’s not until I re-enter that I’m hit with the penalty. The longer I stay out, the longer I avoid the pain. It’s an inducement to remain uninsured."

It's early days for this plan and opposition to it, especially from the Senate, is fierce so it's unlikely to change in its present form.

A sobering thought, though, is that this might be House Speaker Ryan's 'moderate' plan. If it's not passed he is much more likely to bend rightward and put forward an even harsher 'healthcare' proposal than to propose a more generous, reasonable, plan.