Why Braun says he supports covering pre-existing conditions and Donnelly doubts him

Health insurance is not cheap for Adam and Trisha Brand. Each month the South Broad Ripple couple spends about $1,200 on insurance for themselves and their two young children, who both have asthma.

Not only do they worry about what might happen to their premiums if Obamacare disappears, they also fear that dismantling the Affordable Care Act would dissolve the protection for pre-existing conditions that guarantees they can insure their family.

Fort Wayne businessman Mark Hagar shares the Brands' concern about health care. But as the owner of a small company, he faces very different challenges.

Hagar, who strives to offer his employees insurance, has watched his costs steadily rise under the current system. He worries the day may come when he no longer will provide that benefit to his employees. He'll still have to find insurance for himself, though.

For many voters like the Brands and Hagar, health care is a top issue heading into this November's election. Both incumbent Sen. Joe Donnelly and Republican Mike Braun have devoted much time to sparring over solutions in their campaign messages.

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More:What the debate over Obamacare means for Hoosiers

Across the country, debates over health care permeate political races. Voters in battleground districts labeled health care the most important issue in deciding for whom to cast their vote, according to a recent CBS poll . Seventy percent of voters polled identified it as the most key issue, ahead of Supreme Court appointments, immigration, and gun policy. 

Like the parties they represent, Donnelly supports maintaining many key tenets of the ACA and Braun endorses the Republican notion of “repeal and replace.” 

Solving the conundrum of making health care accessible to all has long proved a challenge for politicians, a challenge many Democrats hoped passing the Affordable Care Act would address.

But the many-headed health care hydra has proved recalcitrant, resisting easy solutions and leading to a continuing debate over how best to solve the problem.

In recent years, health care expenditures have continued to rise for many people, along with premiums. In some counties, people shopping for insurance on the individual markets have only one option – and it’s often not cheap.

Obamacare's initial promise of leading to coverage for more previously uninsured low-income people has had mixed results, depending on individual states' policies. 

And, voters continue to demand improvements to the health care system.

“They were promised that if Obamacare passed, it would solve the biggest problems in the health sector — high costs and tens of millions of uninsured — but that has not happened,” said Grace Marie Turner, founder, president and trustee of the Galen Institute, a non-profit public policy institute devoted to advancing free market ideas in health care. 

“This is going to continue to be an issue because Obamacare did not deliver. It is still a valid issue on the campaign trail because people are still suffering from high health insurance costs and too few choices.”

Under Obamacare, the national uninsured rate did fall from 20 percent to 12 percent. In Indiana, It fell from 19 percent to 11 percent.

Libertarian candidate Lucy Brenton offers a more radical solution to the quandary than either of her competitors, proposing the government get out of the health care business altogether. With all the problems in the current system, which she terms SICKcare, Brenton said she’d like to see health care left to the free market.

“Like any other important product, government should step out of the way, leaving the consumer and provider to create the outcomes that are profitable for the provider and desirable for the consumer,” Brenton said in a statement. “Health care is too important to let government destroy it with its meddling.”

Health care and the U.S. government

But the government has long been in the health care business. After World War II, it became customary for employers to provide the benefit for their employees. Two decades later, the government started offering Medicare and Medicaid to the nation’s oldest and neediest citizens, said James Angel, a professor of finance at Georgetown’s McDonough School of Business.

Private insurers and the government became the primary purchasers of health care, doing away with a transparent, competitive market. Today those two sources account for 84 percent of the U.S. covered population.

While fewer than 20 percent of those covered rely on the exchanges the ACA created for their health care, Angel added, insurance has become a hot button issue in politics because many people realize that there but for the grace of employment or eligibility go they.

“Every worker is in fear that they might wind up in that 16 percent,” he said.

Crippled without Obamacare

Even before Obamacare, Adam Brand purchased his own insurance. Young and healthy, he used a broker and did not worry much about it. In 2012, when he married Trisha, he was able to get on her employer provided plan.

More recently, however, Trisha decided to quit her job and work as a contractor to give her more flexibility as a working mother. She did so with the knowledge that while it would not be cheap, her family could purchase individual insurance.

“That would just cripple us if we couldn’t get Obamacare,” said Trisha, who works as a marketing and public relations consultant and said she would need to find a job with employer insurance if the Affordable Care Act is dissolved.

Both the Brand children, ages 4 and 2, struggle with ear infections in addition to their asthma and have had bouts of pneumonia. One has had four surgeries, the other two. The children have spent 10 nights in the hospital.

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No surprise then that Adam, who runs 1st Maker Space, a business that supplies schools with furniture and STEM equipment, said health care will factor largely into his voting decisions come November.

“It’s probably one of the biggest decisions that we’re looking at in terms of impact,” he said. “Insurance is what will affect us the most…. If we can’t get insurance because of the pre-existing conditions, then we’re in a very bad spot.”

Pummeled by health care costs

Right now, Hagar feels like he's in a rough spot and it's only likely to get worse.

Four years ago, he acquired the company Prentice Products, which provides serial plates to the military and aerospace industry.

Technically he does not have to provide insurance to employees; the business is small enough that he could require them to buy their own coverage. Larger employers, however, are required to offer insurance to workers or pay a penalty.

Hagar chooses to make insurance available to those among his 22 employees who want it.

“First of all, I own the business, I have to have insurance and we look at our employee base and say we at least want to offer it to the extent we can,” said Hagar, who serves as leadership council chair of the National Federation of Independent Businesses for Indiana. “I don’t know employers who wouldn’t want to provide this for their employees but the challenge is doing that in the context of running a profitable business.”

Every year, Hagar’s health care costs increase by double digits. Only one or two providers offer employer insurance in his market, allowing them to keep prices high.

Without competition among providers, Hagar has had to decrease the amount his company contributes and to ask employees to pay more if they want to be on the company insurance. Some find insurance through a spouse. Others just pay the penalty rather than purchase the coverage.

Hagar would like to see more competition in health care, whether that consists of allowing people to buy insurance across state lines or letting small business owners band together into a group to mirror the size of one of those larger companies.

Braun has floated two suggestions for increasing competition that sit well with Hagar – selling insurance across state lines and letting small businesses pool together to buy insurance.

Extending insurance sales across state lines may not be so simple, however, experts say. The proposal has been extensively debated.

It was originally included in the ACA with the provision that states could buy insurance across the borders, though none acted on the offer, said Elizabeth Carpenter, a senior vice president with Avalere Health.

Allowing the purchase of insurance across state lines could lead to other problems, she added. An insurance plan based in South Carolina, for instance, might not even have a provider on board in Indiana, rendering it of limited use to someone in Indiana.

A pre-existing conditions debate

Braun hopes to appeal to voters with his own experiences as a business owner.

He makes frequent references to protecting coverage for his own employees with pre-existing conditions as an example of what he supports as federal policy.

But Donnelly questions Braun's commitment to that and experts doubt such coverage is possible on a wide-scale basis without some sort of government involvement.

The Republican candidate has also frequently mentioned that in his own business, he kept premiums steady for a decade. 

The secret to Braun’s success with keeping premiums low for his 900 or so employees at Meyer Logistics lay in opting to self-insure his company, said Joshua Kelley, a Braun spokesman.  

With self insurance, the company does not contract with a third party but instead assumes the risk of paying for each claim out of pocket. About a third of companies, covering about 50 million workers, choose self insurance, according to the Self Insurance Institute of America.

Self-insurance allowed Braun to do away with a lot of the overhead that comes with third party insurance, led to more transparency on pricing and gave employees more choices, Kelley said.  The company also provided incentives for employees who underwent annual biometric screening and offered health coaching.

But a CNN story late last week questioned how much money the Braun company plan winds up saving for employees. The high deductible comes to $5,000 per year for individual and $10,000 for families, compared with a national average of $1,500 for single plans, CNN reported. 

Although the policies Braun put in place for his business may not readily translate to the national level, Kelley said that Braun's experience could prove invaluable in helping solve address health care on a larger stage.

“Scaling that up is obviously something that has challenges but at the same time if we have more people coming into Washington with real world solutions… we would probably start turning this thing around,” Kelley said.  

Throughout his campaign, Braun has expressed his support for covering pre-existing conditions, including earlier this month in a statement to the Fort Wayne Journal Gazette, "no one should go broke because they got sick or had a bad accident." 

Donnelly emphasizes that he has steadfastly supported coverage of pre-existing conditions while arguing that Braun's positions on certain federal legislation show that Braun does not..

Donnelly notes that Braun has said he supported two legislative proposals and a lawsuit that would have taken away health care from non-elderly Hoosiers with pre-existing conditions.

Politifact weighs in

Politifact explored the claims and rated them as "mostly true" because of Braun's staunch opposition to the Affordable Care Act. While Braun has argued for a way outside of Obamacare to cover pre-existing conditions, the fact-checking website noted that some experts said that would be difficult to achieve without some government intervention.

Donnelly said he supports keeping many aspects of the current health system in place.

"I support bipartisan efforts to lower costs, while also maintaining consumer protections like those that require insurers to cover people with pre-existing conditions and provide essential health benefits," he said in a statement to IndyStar.

A July Kaiser Health poll found that when it comes to health issues, voters are most interested in how the candidates view continuing protections for people with pre-existing conditions. Eleven percent of people said this was the single most important health factor in their voting decision and more than half termed it a very important factor.

Affordable Care Act supporters argue requiring all people, even the young and healthy to have coverage, is necessary to insure even those with pre-existing conditions who might rack up more health care charges.

Without a mandate, private insurers would cherry pick the healthiest people, ignoring those with pre-existing conditions, said Karen Pollitz, a senior policy fellow at the Kaiser Family Foundation. A mandate helps spread risk across all those insured.

“An insurance company competes to avoid the risk, not to cover the risk,” Pollitz said. “When you make your risk pool look like average instead of cherry-picked healthy people, insurance will be expensive. So insurance that actually protects and takes care of you will be expensive.”           

One way to preserve coverage for pre-existing conditions would be to do a better job of persuading a wide range of people, including millennials, to purchase health insurance, said Turner, who helped develop an alternative health care plan.

Part of that plan, The Health Care Choices Proposal, written by a group of conservative health care advocates, suggests giving younger people incentives, such as special discounts to encourage them to purchase and keep coverage.

“The reason that people aren’t continuously insured, is it’s too expensive and they don’t see the value of paying such high premiums with sky high deductibles,” Turner said. “Young people really want insurance but they don’t want it to the point that it bankrupts them.”

With little to assuage his fears about what the future will bring for health care, Hagar said he hasn't heard anything this election season that strikes him as the clear answer. Neither of the two candidates, he said, has proposed a measure that sounds like a workable solution to him.

Meanwhile, the same old problems with health care persist.

“Health insurance certainly isn’t more affordable and it just continues to be a challenge,” Hagar said. “We have tried to attack this from every angle…and we just keep going back to the least objectionable we have.”

Call IndyStar staff reporter Shari Rudavsky at (317) 444-6354. Follow her on Facebook and Twitter: @srudavsky.

One in a series of stories examining key issues in the U.S. Senate race.