By using this site, you agree to the Privacy Policy and Terms of Use.
Accept
Health Works CollectiveHealth Works CollectiveHealth Works Collective
  • Health
    • Mental Health
    Health
    Healthcare organizations are operating on slimmer profit margins than ever. One report in August showed that they are even lower than the beginning of the…
    Show More
    Top News
    benefits of using protein powder to build muscles
    Protein Powder for Muscle Mass: Everything You Need to Know
    December 12, 2021
    changes brought on by blockchain in healthcare
    Technology In The Healthcare Industry
    March 28, 2022
    What Does Core Body Temperature Say About Health?
    August 17, 2022
    Latest News
    5 Steps to a Promising Career as a Healthcare Administrator
    August 3, 2025
    Why Custom Telemedicine Apps Outperform Off‑the‑Shelf Solutions
    July 20, 2025
    How Probate Planning Shapes the Future of Your Estate and Family Care
    July 17, 2025
    Beyond Nutrition: Everyday Foods That Support Whole-Body Health
    June 15, 2025
  • Policy and Law
    • Global Healthcare
    • Medical Ethics
    Policy and Law
    Get the latest updates about Insurance policies and Laws in the Healthcare industry for different geographical locations.
    Show More
    Top News
    Obesity Explained
    December 2, 2011
    Why Pilot Programs are a Waste of Time and Money
    August 26, 2017
    Does Disclosure Work?
    January 4, 2012
    Latest News
    How IT and Marketing Teams Can Collaborate to Protect Patient Trust
    July 17, 2025
    How Health Choices and Legal Actions Intersect After an Injury
    July 17, 2025
    How communities and healthcare providers can address slip and fall injuries with legal awareness
    July 17, 2025
    Let Your Lawyer Handle the Work Before You Pay Medical Costs
    July 6, 2025
  • Medical Innovations
  • News
  • Wellness
  • Tech
Search
© 2023 HealthWorks Collective. All Rights Reserved.
Reading: Health Reform: Making the Senate Republican Plan Better
Share
Notification Show More
Font ResizerAa
Health Works CollectiveHealth Works Collective
Font ResizerAa
Search
Follow US
  • About
  • Contact
  • Privacy
© 2023 HealthWorks Collective. All Rights Reserved.
Health Works Collective > Policy & Law > Health Reform > Health Reform: Making the Senate Republican Plan Better
Health ReformPolicy & LawPublic Health

Health Reform: Making the Senate Republican Plan Better

John Graham
John Graham
Share
6 Min Read
one way
SHARE

Three Republican Senators have released a health-care reform proposal that has attracted much attention. One of the three, Orrin Hatch, is likely to chair the Senate Finance Committee if the Republicans win the majority in the Senate.

Three Republican Senators have released a health-care reform proposal that has attracted much attention. One of the three, Orrin Hatch, is likely to chair the Senate Finance Committee if the Republicans win the majority in the Senate.

John Gone wayoodman has described the bill neutrally. At Forbes, Matthew Herper describes the effect of capping the employer-based exclusion at 65 percent of the cost of an average plan, and subsidizing people who earn less than 300 percent of the Federal Poverty Line (FPL) with tax credits to buy their own policies. Herper concludes that, for a household in the 25 percent marginal tax bracket, capping the exclusion will result in a tax hike of about $1,345.

One important part of the proposal that has not received enough critical attention is “continuous coverage protection”, in section 202 of the summary. This is basically a “super-HIPAA” provision and it has problems not immediately apparent to the casual reader. There is a better way.

More Read

healthcare technology
8 Reasons to Adopt Technology for Your Healthcare Practice
The Personalized Medicine Market in 2015 [INFOGRAPHIC]
The Information Junkies in Your Support Group
Sustainable Finance Strategies for Healthcare Businesses
Public Health and Nutritional Supplements

HIPAA is the 1996 federal law that allows you to move from one employer’s plan to another’s without being underwritten and being charged a higher premium for pre-existing conditions. In co-ordination with state laws, it also allowed people to move from employer-based coverage to individual coverage with the same insurer without re-underwriting.

However, to enjoy this protection, a couple of things had to take place. First, you had to use (expensive) COBRA coverage after leaving your job until it expired. Then, even though you were not re-underwritten when going into the individual market, there was no guarantee that the premiums would be affordable. Some states had laws to mitigate the latter effect. In California, for example, a carrier’s post-COBRA HIPAA continuation coverage had to offer beneficiaries the two most popular plans in the individual market, at standard premiums.

HIPAA did not solve another big problem for those who maintained continuous coverage: If you wanted to switch insurers, the new insurer could re-underwrite and increase premiums for a pre-existing condition. The new Republican bill purports to solve this by simply extending the continuous coverage protection across all insurers. The proposal needs significant improvement, because it will demand finely detailed, complex, and burdensome regulations to overcome selection problems.

Avik Roy notes that some in the Twitter-verse think that the continuous coverage provision will lead to people choosing skinny plans when they are healthy and comprehensive plans when they are sick. Let’s also remember that insurers will seek to avoid this happening to them. Although the law will try to force them to accept all comers who had previous coverage, they will find creative ways to avoid enrolling people who want to switch to comprehensive plans, knowing that they are likely to be sicker.

Insurers will design plans in the individual market that attract the healthy and repel the sick. For example, they might offer free health-club memberships while not having robust networks of specialist physicians. Clearly, the only way to avoid this is for the government to heavily regulate the design of health insurance. This leads to more bureaucracy, government meddling, and all the other things associated with trying to force people to do that which they do not want to do.

But there is a solution: Health-status insurance, as described by John Cochrane of the University of Chicago in a 2009 proposal and described by John Goodman in Priceless and here as “insurance against getting a pre-existing condition.” With health-status insurance, part of the insured’s premium pays for a policy that pays out if he falls ill and then tries to switch insurers. The payoff from the health-status insurance finances the insured person’s higher premiums in a new plan. It is a win-win situation: The sick person has a wide choice of health plans that he can afford, and the health plans compete to enroll — not avoid — the sick.

Cochrane envisions this as the natural state of health insurance in a market where individual coverage is the norm. The Senate Republicans’ proposal does not go that far, preserving employer-based benefits for most Americans.

Whether health-status insurance can arise under such a distortion is unclear (although it may be possible in private health-insurance exchanges). Certainly, it will need to be thought through if Senate Republicans hope to develop a bill without unintended consequences for those who need health insurance the most.

Share This Article
Facebook Copy Link Print
Share

Stay Connected

1.5kFollowersLike
4.5kFollowersFollow
2.8kFollowersPin
136kSubscribersSubscribe

Latest News

technology in medical research
The Tools Helping Medical Researchers See the Full Picture
News Technology
August 3, 2025
5 Steps to a Promising Career as a Healthcare Administrator
5 Steps to a Promising Career as a Healthcare Administrator
Health
July 31, 2025
holistic dental
Holistic Dentist Services Are Natural and Safe
Dental health Specialties
July 28, 2025
botox certification
Help Improve People’s Skin Health Via Botox Certification
Skin Specialties
July 22, 2025

You Might also Like

Image
Medical EducationSocial Media

Cleveland Clinic and Doximity Make Earning CME Credits More Social

May 26, 2013

Paul Starr’s Remedy and Reaction – Book Review

October 21, 2011
family doctor visit
Health Reform

Family Doctor Visit Costs

November 25, 2015
Health Reform

Shared Care Plans and Utilization Management

February 24, 2016
Subscribe
Subscribe to our newsletter to get our newest articles instantly!
Follow US
© 2008-2025 HealthWorks Collective. All Rights Reserved.
  • About
  • Contact
  • Privacy
Welcome Back!

Sign in to your account

Username or Email Address
Password

Lost your password?