User:NormSpier/PPACARemovedOutLineOfCoverageReference

A section added by me Aug 2019 to ACA article. From comments in an RFC of Sept 2019, it became clear that (a)the content is too dense and logically oriented, so that it jolts a large part of the average-citizen intended audience for the article, and may stop them from reading (b)there were problems with hitting "original research" as interpreted by some of the editors associated with the article. (My own view, perhaps independent of whatever Wikipedia written standards may exist on the topic, is that anything I had not documented by references was obvious to people who both knew the law, and/or could reason about basic economic and actuarial mechanisms.) (See the RFC, where specific parts were identified as "original research".)

Thus, I've agreed to drop it permanently.

But note, a noteworthy bit of content, breaking a fallacy: I have a section that begins, "It should be noted that, while the intent of the ACA's design was to provided affordable coverage to all, it was not designed to lower premiums for all people. Certain individuals were expected to pay higher, but still affordable, premiums, compared to what they would have without the ACA."

(The section goes on to explain why.)

There is some fallacy-breaking elsewhere in the ACA article, and the section might be one someone wants to add.

(As I see it, the current ACA article is terribly weak on allowing people with a bit of intellectual energy to understand how the law works, clear up misconceptions, etc. A person trying to actually understand the law, and its weaknesses and potential weaknesses, is not much helped by the ACA article. The person is left to continue at the level of the pile of generally very weak journalism that they have encountered, leaving them running around not understanding much, and fretting in confusion and darkness.)

Outline of Coverage Mechanism

An intent of the ACA is to make coverage available to all, regardless of whether they have pre-existing health conditions, at an affordable cost. This is done by (for the case of U.S. citizens^[1][2]):

1. Expanding employer coverage through the Employer mandate,
2. Retaining existing Medicaid programs ("traditional Medicaid"; which generally required both low incomes and very low asset levels), and also Children's Health Insurance Programs (CHIPs),
3. Starting a new class of Medicaid, expanded Medicaid, for people whose Modified Adjusted Gross Incomes (MAGIs) are no more than 138% of the Federal Poverty Level (FPL)^[3] and with no maximum asset levels,^[4]
4. Requiring individual major medical policies from private insurers to accept all people regardless of pre-existing conditions, and to not consider pre-existing conditions in rates charged. Rates may vary depending on age, but the maximum ratio of premiums for the oldest to the youngest covered are capped at 3 to 1.^[5] (The ACA attempted to be make the policies provide strong coverage by requiring essential benefits, and by not allowing yearly or lifetime caps on coverage, as well as having maximum annual out-of-pocket payment caps.)
5. For people who do not have coverage available by other means (an affordable employer's or a family member's employer insurance program, or the items in (2) and(3) above: a traditional Medicaid or expanded Medicaid or a CHIP or other public assistance health coverage), if their MAGIs are from 100% to 400% of the FPL,^[3] sliding-scale income-based subsidies are provided.^[2]

Essentially, for people without employer insurance, if incomes are through 138% of the FPL, the ACA design intends all people either get Medicaid coverage, or expanded Medicaid coverage. For the remaining individuals, a major medical policy will be available, with a sliding-scale subsidy for individuals with incomes below 400% FPL, to attempt to make the policy affordable.

Part of the mechanism was also from a mandate to carry coverage (or else pay a penalty). This was designed to keep insurance costs lower than they would otherwise be, by limiting adverse selection due people just picking up insurance when they got sick, or if they were more likely to get sick.

It should be noted that, while the intent of the ACA's design was to provided affordable coverage to all, it was not designed to lower premiums for all people. Certain individuals were expected to pay higher, but still affordable, premiums, compared to what they would have without the ACA. A specific case of this would be people who had no pre-existing conditions, and might have, without the ACA, been able to purchase pre-existing-condition-screened insurance at a low premium, made possible by the fact that the pool of people insured by the policy had few sick people in it. The ACA, by requiring people with pre-existing conditions also to be covered by all plans at the same premium, would yield higher raw (before-subsidy) policy premiums for the people without pre-existing conditions. In the case where incomes were greater than 400% of the FPL, there is no subsidy under the ACA, so the post-ACA premiums that have to be paid by the individual would be higher. However, the theory would be that, did those same people need insurance when they had serious pre-existing conditions, they would often then be better off post ACA. For example, in 2012 (the next to the last year before the main ACA provisions went into effect) in Connecticut, the only alternative for individual insurance coverage for people with substantial pre-existing conditions would have been the high-risk-pools, which had rates as high as $2077.18 a month per person (male 60 to 64) for $7500 out-of-pocket-maximum coverage,^[6] and $3908.02 a month for the $1000 out-of-pocket-maximum coverage^[7] (same male 60 to 64 in the ACA-unsubsidized income-greater-than-400%-FPL case).

Impediments and Imperfections to Design:

While provisions (4) for individual major medical policies are designed to make them strong policies with good coverage, other coverage post-ACA may not be so strong.

Large group employer policies are not regulated by the ACA, and may provide weaker coverage.

In addition, in certain states, coverage under the traditional Medicaid and expanded Medicaid programs is subject to Medicaid estate recovery of all medical expenses that were paid out for a person while they had Medicaid or expanded Medicaid. The recovery is from a person's estate when they die, and applies only if they were 55 or older when they had the coverage^[8][9][10] (Individuals who are eligible for Medicaid or expanded Medicaid are not eligible to receive the subsidies described in (5) above. They can avoid the estate recovery, by purchasing the major medical policies described in (4), without a subsidy, subject to whether they can afford it.)

In a 2012 Supreme Court decision,^[11] it was made optional for states to expand Medicaid, rather than mandatory, as intended. This has resulted in a coverage gap for many of those who were intended to covered by expanded Medicaid.^[12]

Many states which have expanded Medicaid have, since 2014, have sought and received Federal waivers to add work-requirements for the receipt of Medicaid and expanded Medicaid, which interfere with the original intent.^[13]

Removal of the mandate to carry coverage (effective in 2019^[14]) may increase increase adverse selection in states which do not have their own mandate to carry coverage, increasing costs of individual major medical policies, particularly for those not eligible for the ACA's federal subsidies.