In December of 2011, I wrote a blog entitled “Want to Talk About a Game Changer”. The heart of the blog was the fact that the law, as written, did not include purchases through the Federal Marketplace as eligible for subsidies. At that time, I suggested a solution to the problem and some of the blog’s readers commented that this would not be an issue. Well, the DC Court does think it is an issue and we are now having a discussion on what happens if the decision stands. We have a situation where we have started down a road, whether you agree or disagree with ACA; that will be very hard to stop. I have always said; don’t dwell on a problem unless you have suggestions on how to solve it. So the following is my thoughts on how to solve the problem we now face but also, to alleviate many of the other problems we seem to be having with this law.
So let’s begin with a couple of statements that most people will agree with. #1 The law requires that everyone have health insurance. #2 There are individuals and families that are financially strapped and need some type of assistance with premiums. If you agree with the above statements, then the solution would be to provide the assistance to those in need so they can purchase the coverage. So why complicate the issue? We know that the Marketplace has had significant problems in handling the volume on transactions. We also know that verifying the incomes of individuals for the upcoming year is also impossible. So, let’s make it very simple to administer. Start by allowing the purchase of insurance on or off the Marketplace to be eligible for subsidies. Require the carriers to collect income information and report it to the Government. If the income is such that the individual may be eligible for a subsidy, the premiums are reduced. At tax time, everything is trued up based on what that person’s exact income was. If they received too much subsidy, they would be required to pay it back. If they did not receive enough in subsidies, they would be credited those dollars. If the true intent of the law is to make insurance affordable, then this is a simple and efficient way to accomplish the end result.
This would allow individuals to use professional, licensed, and knowledgeable insurance agents to assist them in purchasing their coverage. It would also make it much simpler to sign up. If a person wanted to use Marketplace, obviously they still could but it wouldn’t be required. Plans are standardized to the bronze, silver, gold and platinum levels so the carrier would be able to only offer those plans that meet the requirements set forth for individuals that apply for subsidies. Professional insurance agents, like those who are members of NAIFA, could assist the individuals in determining eligibility for subsidies. Most have multiple carriers that they work with so they would still have the ability to provide choice.
This seems to be such a simple solution to the problem so I wonder why it hasn’t been discussed in DC. We need to make the process as easy as possible if we want to achieve the goals that the law was meant to deal with. We know that the confusion will continue until we find a easy to implement procedure and the above suggestion is just that. We found that trying to force everyone through a small portal that tries to do too much doesn’t work, let’s try a better way.