Healthcare has always been an Achilles’ heel for as long as the American experiment has existed. Subsequently, governments throughout history have tried to come up with solutions in an attempt to bring healthcare within reach of the masses.
Significant moments in history that have moved the needle in American healthcare include Lyndon Johnson’s signing of the Medicare and Medicaid Act in 1965 and Obama’s Affordable Care Act in 2010. However, America is far from a breakthrough.
Despite these remarkable legislations, 30 million Americans remain uninsured. Moreover, those who are lucky enough to be insured are far from celebration. They still remain at the mercy of high premiums, deductibles and copays. The new administration is aware and has set out to challenge this worrying status quo.
The Push toward Medicare For All
Despite their many origins, names and sponsors, all efforts by Congress all head down one road, universal healthcare.
At its core, this seemingly popular term means collaboration between insurers, medical facilities, and the Federal government that will eventually ensure subsidized healthcare for all Americans. This assurance is regardless of employment status.
However, this thousand-mile long journey has to begin somewhere. For the new administration, this point is getting as many of the 30 million uninsured Americans on the healthcare bandwagon. How?
First, by legislating subsidies that create an incentive for uninsured people to get coverage and for insured people to remain insured.
Special Health Insurance Sign Up Window
Unknown to many, the number of uninsured Americans is not fixed. On the contrary, it fluctuates with government policy and the current administration’s resolve to keep people insured.
During the Obama era, the federal government was pro healthcare. Fuelled by this optimism, America reduced its number of uninsured from 40 million to 26 million.
The same could not be said about the previous administration. Just to put it out there, it was not that friendly to Insurance, and as a result, 1.6 million more Americans became uninsured.
To get more Americans on the healthcare bandwagon, the new administration came up with a strategy. First, his administration legislated perks for insured people and created a special enrollment window for the uninsured to join.
This special enrollment window run from February 15th to March 15th, enabling Americans who had missed the prior window to sign into the ACA. Uninsured Americans largely welcomed this move, with a multitude to the tune of 500,000 Americans taking advantage of affordable health insurance by enrolling.
The Covid Relief Bill And Where It All Started
Biden’s attempt at healthcare reforms coincide with the Federal and State governments effort to contain the pandemic and bring an end to this nightmare.
This collective effort includes a push to vaccinate as many Americans as possible and contain further spread of the virus. At the same time, governments have to create safety nets that cushion Americans from the effects of economic ruin.
All these needs converge at the Covid relief bill, which, apart from its popular $1400 stimulus check, threw a few subsidies in the way of healthcare and Insurance.
Relief from High Health premiums plays a crucial role if America ever wants to go back to its pre-pandemic way of life or have a new normal its citizens can live with.
This is because apart from exposing issues in American healthcare that have been marinating for ages, Covid was ruthless to both insured and uninsured people.
All the economic ruin, unemployment, and the missing safety nets became a perfect storm, and as a result, 5 million citizens are estimated to have become uninsured between 2020 and 2021 alone.
Changes To Public Health Insurance In The Biden Administration
A few months into his presidential term, Biden and his democratic Congress have already created incentives to make healthcare more attractive to the average American.
This hitting of the ground running by the Biden team does not exclude the uninsured or those insured privately. Some of these changes include:
- The Return Of The Individual Mandate
The individual mandate is one of the more controversial parts of the affordable care act. Due to its polarizing nature, it gets thrown in and out of law depending on who’s in office.This mandate is a tax penalty for those who choose not to pay into the Affordable Care Act and is meant to ensure that as many people as possible pay in. The more, the merrier.
Once repealed by the Trump Cuts and Jobs Act, it will now be reinstated by Biden to ensure that the Affordable Care Act gets as much funding as possible.
- No More Spending Rates
For those purchasing health insurance, through the ACA, the promise is to offer them Insurance for less than 10% of their income.Before the Biden administration, the cap on the amount of premiums for those paying through the ACA was 9.86%. Congress will lower it to 8.5%, passing significant savings to many and making public healthcare a more affordable option.
- Negotiating Lower Prescription Prices
Prescription drug prices are another issue fanning the flames of America’s health crisis. Before the Biden administration, the Federal government could not bargain with manufacturers to lower drug prices.All that changes with the new administration. Congress has passed legislation that enables government insurance bodies to negotiate with drug sellers and producers.
Moreover, in an attempt to create competition, it gives Americans the ability to buy prescription drugs and cheaper alternatives from other countries.
- Access To Undocumented Immigrants
When Congress first wrote the Affordable Care Act into law in 2010, access to undocumented immigrants was denied.However, due to a changing political landscape and a significant increase in undocumented immigrants, the political tides are starting to change.
Ignoring the health concerns of the vast number of immigrants is no longer a safe public option. Hence the new ACA will offer access to undocumented immigrants.
- Elimination Of The 400% Income Cap On Tax eligibility
The ACA has always had a tax credit eligibility cap for all people earning above 400% of the poverty line for its entire existence.The new administration repealed it to make Obamacare cheaper for the average American and encourage more to enroll into the coverage.400% of the poverty line is about $50,000 a year, which means that this policy will benefit those in the middle class most.
What Does The New Administration’s Approach Offer?
The cumulative effect of these new policies will be two-fold. First, making health insurance cheaper for the average American and, as a consequence, increasing the number of insured Americans. This is through:
- An Average Reduction In Premiums
One of the immediate effects of this new policy will be felt by many in their monthly premiums.As a result of the new legislation, a 46-year-old making $19,000 a year would have to pay nothing in premiums, down from the initial $67.
- Reduction In Copays
Copays have been one of the payments fuelling the rise of out of pocket costs these past few years. This is because most copayments go towards financing prescription drug costs for every visit.With the drug price reform expected to lower the price of prescription drugs, this effect may trickle down to copayments making them more affordable.
- Tax Credits
Most tax benefits and deductions in the ACA only applied to people who earned unlivable wages, locking the middle class out of these deals.
To enjoy a tax credit from the affordable care act, one would either have to be poor or unemployed. This changes with the new legislation. Most of the tax credits in this new deal will be within reach of members of the middle class.
Who Wins?
In the long run, everybody benefits from healthcare reform. For now, however, this is the group of Americans laughing all the way to the bank or the hospital.
- Americans under Private Insurance Plans
Though not directly, the ripple effect from the reduction in drug prices is likely to spill over even to those Americans self-financing private insurance covers.
- Americans with Pre-existing conditions
This new legislation is a win for elderly Americans and those with pre-existing conditions. The bill has in-built provisions to protect these groups from price discrimination and high premiums specifically.
- All Americans receiving unemployment benefits
The record-highs of unemployment have been preceded by record-high numbers of uninsured. This bill offers affordable coverage for those who lost their jobs in this economic scourge.
- Those already under ACA coverage
For those already enrolled under Medicare, they get the benefit of paying lower premiums and receiving tax benefits
- Self-employed Americans
The biggest winners are probably self-employed Americans. These types don’t have the backing of huge corporates like those in the private sector or powerful governments like those in public service. This bill makes health insurance cheaper and less of a hassle for them.
How HST Will Help
Healthcare insurance can be complicated for the average person. Combing through the hundreds of documents and navigating through fluctuating government policies to choose a plan can be a nightmare. We suggest that you leave it to the experts.
With over 2300 agents and on a backdrop of decades of experience, HST will help put all your insurance worries in the past. For more information, contact us today, and we will be more than willing to help.
Healthcare Solutions Team is a wholly owned subsidiary of the National General Insurance Group and the Allstate Insurance Company.