ObamaCare Tax Tips

High Risk Pools and the Reviving on the AHCA in State-Level Form

House Republicans are considering high-risk pools (sick pools) as part of their ObamaCare replacement revival, we explain what “high-risk pools” mean.

First off, the reason we are talking about this is because “the MacArthur Amendment” is essentially calling for the AHCA (AKA TrumpCare 1.0) to be revived, but this time with state-level waivers and talk of high-risk pools.

For those who don’t want to read on, the main problem here is funding. Funding. Funding. That is funding regarding tax payers footing the bill, and funding regarding Republicans using a bunch of really clever tricks to starve progressive states of their funding. Funding. Funding.

With that said, the new TrumpCare / RyanCare 2.0 might be slightly better in theory than the actual AHCA.

The AHCA tried to have a one-size-fits all federal solution paired with tax breaks for industry and the wealthy, and the grand result was a projected 52 million uninsured.

Meanwhile, a state level solution with waivers at least allows for state-based solutions for public options, single payer-like systems, and Medicaid expansion, like the ACA allows for (unless of course the final bill says “…but were are going to starve funding of progressive states” in fine print or “we are going to take away 1332 and 1115 options“).

That said, the topic here is risk pools (not every complication with reviving the ObamaCare repeal and replace bill that didn’t pass the House).

About Risk Pools, ObamaCare’s Risk Pool, and Ryan’s “Invisible Risk Pool”

To talk about risk pools we have to first note that “high-risk pool” (AKA “sick pool”) is a rather ambiguous term that can mean a variety of things and work in a number of ways.

Luckily for those who don’t want to learn about every way a risk pool could work, the current idea being considered is specific.

The risk pool being proposed is called an “invisible risk pool.”

This is essentially what Ryan had suggested for RyanCare in the first place, but wasn’t included in the AHCA (in words, they are still trying to push their old Better Way plan through).

The Federal Invisible Risk Sharing Program (the Invisible Risk Pool) would establish a $15 billion fund to help offset insurers’ expenses for patients with high-cost health conditions, similar to the reinsurance program created by the Affordable Care Act, or ACA. – Center for American Progress

Of course, the problem is. Funding. Funding. Funding.

High-risk pools have traditionally been underfunded by states and the federal government, resulting in poor coverage and high costs for those who need insurance the most. This was true before ObamaCare, in the year ObamaCare started in 2014 (it had called for a transitional risk pool), and will likely be true again.

With that said, this type of risk pool isn’t the only option.

Risk pools don’t just come in one type. They span a few different types. So, although the new risk pool seems specific, there are actually a few different ways it this could work.

Instead of explaining each of the ways it can work, I’ll let the Daily Signal article “Understanding High-Risk Pools as Part of Obamacare Replacement” explain.

The gist is:

  • Either the government funds the pool or insurers do collectively,
  • If the government runs the pool, it is either state, federal, or mixed,
  • If the private market runs it, either there is a literal pool or it is more like risk adjustment (where the cost burden of the sickest patients is shared; to help offset premiums; Like an insurance for insurers), and
  • Either the sick pool is part of another insurance type (like Medicaid or private) or it is its own thing.

If we go with a separate insurance type and tax payer funding, the question becomes… “why is it we are doing this instead of expanding Medicaid?”

Meanwhile, the private market-based options have their own compilations.

Generally all the variations have odd sticking points related to cost for consumers, problems with funding (in the case of tax dollars), and problems with compelling insurers to create fair pools (in cases where the private insurance do the pools).

Nothing is simple here, especially if the pools are erected at a state level with 50 different solutions, but every type has some serious complications that makes the focus on them odd (as they are a way to avoid a public option, single payer, and Medicaid expansion without tossing the sick and poor out on the street).

The ACA used high-risk pools in its first year as part of its transition, and they burned through their funding very quickly.

Likewise, risk pools were used in the past before the ACA, and it was a bit like COBRA (where the premium was so insanely high that the poorest needed their premium subsidized by the state anyway).

This is to say, not only is corralling a bunch of sick people on one state-based insurance with a premium a little strange morally and ethically (better than the streets, but not exactly a feel good thing), there is also a host of complications economically.

With that said, we at ObamaCare Facts strongly prefer state-level solutions as, even though this can hurt some states and give other states funding issues, it eliminates the one-size-fits all approach that tries to please the most liberal and most conservative Americans at once (something that is essentially impossible to do).

With that noted, any sort of risk pool is cause for alarm. High-risk pools have traditionally been underfunded by states and the federal government, resulting in poor coverage and high costs for those who need insurance the most.

We at ObamaCare Facts, more than supporting the concept of State-level, support smart healthcare solutions, and it is hard to see how “risk-pool” beats expanding access to coverage that already exists. Do we really need yet another government program when we could be consolidating via a public option or single payer. We don’t think so, but of course, that is why we want the freedom to be able to fix the problem at a state level.

TIP: See Some Republicans Think They May Have A Health Care Deal by the Huffington Post for more.

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