Risk Insider: Jason Beans

ACA’s Solution – Treat Health Insurance like Other Insurance

By: | March 28, 2017 • 3 min read
Jason Beans is the Founder and Chief Executive Officer of Rising Medical Solutions, a medical cost management firm. He has over 20 years of industry experience. He can be reached at [email protected]

The current administration was elected with the promise it would repeal and replace the Affordable Care Act (ACA). But bipartisan opposition killed the GOP’s proposed replacement, the American Health Care Act (AHCA).  There are no plans to draft another alternative; yet, we still need one.

Under the ACA, insurance premiums rose as existing policyholders paid for the very ill and newly insured. Medicaid expansion, which encompassed two-thirds of the newly covered, increased the taxpayer burden to subsidize a program long plagued by excessive wait times and limited coverage. Reimbursement incentives prompted provider consolidation; insurance carriers unable to profit on the exchanges dropped out and many patients couldn’t keep their doctors. For many, the ACA hardly proved affordable or stabilizing.

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So what should be done? With the objective of lowering costs, keeping our health care and health insurance markets viable, and reducing harm to people who suffer serious health issues, here’s how I’d restructure the ACA.

Treat Health Insurance like Car & Life Insurance

People often confuse health care with health insurance. Insurance is financial backing to protect us against rare, uncontrollable events. Think of car insurance.  Car insurance does not cover oil changes, tire rotations, alignments, etc. Car owners budget for these foreseeable maintenance costs. Likewise, people purchase aspirin and cold medications when they need them. Why day-to-day medications are insured never made sense to me. People can use a Health Savings Account (HSA) to handle these costs.

It is also silly to mandate coverage for unnecessary treatments. I will never need maternity care.  My mother will never need prostate cancer treatment. By eliminating unnecessary coverage and using a HSA model to handle day-to-day healthcare expenses, we’d cut costs.

It is silly to mandate coverage for unnecessary treatments. I will never need maternity care.  My mother will never need prostate cancer treatment.

Health insurance should be bought like life insurance. Enrollees choose whole life or a 10-year-plan. The younger and healthier a person is when they enroll, the less expensive their rate will be.

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Carriers would see years of high profitability during a policy’s infancy, and invest those profits to cover costlier times later on.  This arrangement incentivizes people to buy insurance early; securing lower rates and eliminating policy cancellations when they become ill.

Increase Competition

In many states, large health plans are a virtual monopoly. National licensing for health insurance would create better penetration and more competition. Competition always reduces cost and increases service.

Reduce Treatment Regulations

Providers face copious regulations, often driven by special interest lobbying. When I visit other countries, I speak directly with a pharmacist to get prescriptions. Pharmacists know more about drugs and drug interactions than medical doctors. Yet here we waste time and money on office visits in order for physicians to write prescriptions. This adds unnecessary cost to the system, wastes our doctors’ time, and turns our highly trained pharmacists into pill counters.

We cannot look at prescription data and think this required process is adding value (e.g. the US has the highest rate of physician-prescribed opioids in the world). Common sense deregulation would cut costs and improve user experience.

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By lowering the costs of health care, all citizens will have the opportunity to improve their health care and health insurance situations. Medicaid and Medicare will still be available to provide for the elderly and those in the worst financial situations. High risk pools can also be established to cover the few people who fall outside any of these solutions.

While the Republican plan lacked support as a viable solution, the ACA’s deficiencies will continue. I do not expect Congress to address this topic again in the next two years, but it will have to be addressed. Hopefully, next time, legislators will study what works and create a sustainable solution.

More from Risk & Insurance

More from Risk & Insurance

2017 RIMS

Cyber Threat Will Get More Difficult

Companies should focus on response, resiliency and recovery when it comes to cyber risks.
By: | April 19, 2017 • 2 min read
Topics: Cyber Risks | RIMS

“The sky is not falling” when it comes to cyber security, but the threat is a growing challenge for companies.

“I am not a cyber apocalyptic kind of guy,” said Gen. Michael Hayden, former head of the Central Intelligence Agency and National Security Agency, who currently is a principal at the Chertoff Group, a security consultancy.

Gen. Michael Hayden, former head of the CIA and NSA, and principal, The Chertoff Group

“There are lots of things to worry about in the cyber domain and you don’t have to be apocalyptic to be concerned,” said Hayden prior to his presentation at a Global Risk Forum sponsored by Lockton on Sunday afternoon on the geopolitical threats facing the United States.

“We have only begun to consider the threat as it currently exists in the cyber domain.”

Hayden said cyber risk is equal to the threat times your vulnerability to the threat, times the consequences of a successful attack.

At present, companies are focusing on the vulnerability aspect, and responding by building “high walls and deep moats” to keep attackers out, he said. If you do that successfully, it will prevent 80 percent of the attackers.

“It’s all about making yourself a tougher target than the next like target,” he said.

But that still leaves 20 percent vulnerability, so companies need to focus on the consequences: It’s about response, resiliency and recovery, he said.

The range of attackers is vast, including nations that have used cyber attacks to disrupt Sony (the North Koreans angry about a movie), the Sands Casino (Iranians angry about the owner’s comments about their country), and U.S. banks (Iranians seeking to disrupt iconic U.S. institutions after the Stuxnet attack on their nuclear program), he said.

“You don’t have to offend anybody to be a target,” he said. “It may be enough to be iconic.”

The world order that has existed for the past 75 years “is melting away” and the world is less stable.

And no matter how much private companies do, it may not be enough.

“The big questions in cyber now are law and policy,” Hayden said. “We have not yet decided as a people what we want or will allow our government to do to keep us safe in the cyber domain.”

The U.S. government defends the country’s land, sea and air, but when it comes to cyber, defenses have been mostly left to private enterprises, he said.

“I don’t know that we have quite decided the balance between the government’s role and the private sector’s role,” he said.

As for the government’s role in the geopolitical challenges facing it, Hayden said he has seen times that were more dangerous, but never more complicated.

The world order that has existed for the past 75 years “is melting away” and the world is less stable, he said.

Nations such as North Korea, Iran, Russia and Pakistan are “ambitious, brittle and nuclear.” The Islamic world is in a clash between secular and religious governance, and China, which he said is “competitive and occasionally confrontational” is facing its own demographic and economic challenges.

“It’s going to be a tough century,” Hayden said.

Anne Freedman is managing editor of Risk & Insurance. She can be reached at [email protected]