What the BCRA Means for Healthcare

Reese Isaacson News, Travel Leave a Comment

If you’ve been paying attention to the news recently, and possibly even if you haven’t, you have likely heard about healthcare reform in the United States.

Republicans have been attempting to repeal and (potentially) replace the Affordable Care Act (the ACA or Obamacare) ever since its passing.

These efforts have only intensified since Trump took office and Republicans gained control of both houses of Congress.

The House of Representatives version of repeal and replace – the American Healthcare Act (AHCA) – passed by a 217 to 213 margin on May 4, and the mantle of repeal and replace has since been passed to the Senate.

While most political observers are not optimistic that the Better Care Reconciliation Act (BCRA) – the Senate healthcare reform bill – will be able to reach the 51 votes necessary to ensure passage, the issue is far from over.

In this blog post, I want to discuss what repeal and replacement of the ACA would mean for medical travel.

Going forward, while I acknowledge the arguments against the Congressional Budget Office (CBO) and its estimates on the effects of the AHCA, BCRA and straight repeal, I will be using those estimates.

22 million people will lose health insurance under the BCRA.

The majority of these cuts will come from the Medicaid rolls, with the rest representing people being priced out of the individual insurance market.

While these 20-30 million people will not be without care per se – it is illegal for emergency rooms to turn away patients – routine care will suffer as uninsured patients will not have access to primary care services and preventive medicine.

This is where medical travel comes in.

Companies like MedRepublic enable these patients to go abroad and get the non-acute care that they need at a price that is often significantly lower than that in the United States.

Let’s look at bariatric surgery, for instance.

Aside from simply affecting weight loss, bariatric surgery has been shown to result in improvements in diabetes control, blood pressure control, acid reflux symptoms, sleep apnea symptoms as well as overall improvements in quality of life.

The average cost of a sleeve gastrectomy (one of the most common bariatric procedures) in the United States is $15,000-$20,000 without insurance.  However, the price is less than half of that in Mexico.

It is not unreasonable to think that dramatically increasing the number of uninsured Americans will lead to more Americans going abroad for such medically necessary, non-emergent care.

One of the amendments to the BRCA being considered was proposed by Ted Cruz of Texas; in a nutshell, if a provider offers at least one plan in a state that complies with Obamacare regulations, that provider is also allowed to offer plans that do not comply.

Thus, insurance companies could offer cheaper plans that do not cover some of Obamacare’s essential health benefits.

This includes things like mental health care, laboratory services and pregnancy and maternity care.

This bill has not been scored by the CBO, but it is plausible that proliferation of these cheaper, more narrowly-tailored plans will also lead to an increase in medical travel.

What may happen:

People will obtain minimal insurance, something more akin to catastrophic coverage, while increasingly going abroad for elective procedures and taking advantage of this price differential. 

For example, imagine an individual buys a high deductible plan meant to cover emergency services and hospitalizations only; if they need a hip replacement which isn’t covered under their plan, they are looking at an average cost of around $40,000.

The price can be anywhere from 25-50% of that if a patient is willing to go abroad.

However, even if the ACA remains the law of the land, the market for medical travel will still very much exist.

The essential health benefits in the ACA do not include things like adult dental care and optometric care. 

And even if an individual has insurance, most insurance plans do not cover elective procedures like LASIK, plastic surgery or in-vitro fertilization.

In a recent New York Times article, Freda Moon wrote about taking her family to Thailand for dental care.  Freda is one of the estimated 114 million Americans without dental insurance.

Rather than spending $5,000-$6,000 on dental care in the United States, her and her family booked those procedures in Thailand.  For that same cost, they got the exact same procedures plus a 16-day Asian vacation.

The goal of medical travel companies is not to take patients or revenue from the United States; rather, the goal is to enable patients to get care they need at a cost they can afford. 

As long as healthcare in the United States continues to be among the most expensive in the world, medical travel will be an option for patients to get the care they need.