Every day in the media and on Capitol Hill, Americans are being fed misinformation on healthcare reform. Lawmakers, presidential hopefuls, and talking heads try to tell anyone who will listen that, unless the federal government ushers in a $30 trillion Medicare for All program, premiums will continue to soar, and millions of Americans will continue to go underinsured.
But it doesn’t have to be that way. There’s a better way to restore our healthcare system, spelled out in a report released on October 22 by the Republican Study Committee (RSC). This expert policy squad searched far and wide for actionable, market-based reforms that would lower costs and improve outcomes for millions of patients without bilking taxpayers for more government programs that families just can’t afford. And, their work speaks for itself. A truly market-based system would deliver the goods, but only if Congress is willing to consider a wide array of bold reforms. Millions of patients deserve a system that works for them at a reasonable cost, something that only innovation, competition, and choice can deliver.
Americans really like their healthcare plans, but millions haven’t been able to keep them since the implementation of the failed Affordable Care Act (ACA; aka Obamacare) in 2010. Because of the legislation’s onerous requirements as to what constituted an “acceptable” healthcare plan, insured Americans across the country received cancellation notices on their current plans. One such victim was Alabama high school coach Jim White, whose story appears in the RSC report: “Like many Americans in 2013, my wife and I received a letter from our insurance company telling us our plan had been canceled due to Obamacare. Our plan had a premium of around $400 per month with a $3,500 per person deductible before Obamacare. We were then offered an Obamacare compliant plan with a premium of $1,381 per month (nearly a 250% increase), with a $5,500 per person deductible.” These cancellation notices disrupted care for nearly 5 million Americans, and Obamacare restrictions continue to impede the choices of households looking for affordable, reasonable medical plans. Those lucky enough to remain on a plan have found their networks sharply restricted, leading to less choice in doctors and hospitals, and a rise in “surprise billing.”
The RSC report proposes doing away with coverage requirements (i.e. smoking cessation services, maternity care) that many Americans do not want or need. States would be free to come up with their own requirements, resulting in fifty mini-experiments to see the impact of different policies on price and availability. The study committee also takes aim at Washington’s failed, $200 billion Medicaid expansion targeting individuals just above the federal poverty line. For all of the funds thrown at states to expand the federal insurance program, there’s little to no evidence that the expansion actually improved health outcomes for low-income beneficiaries.
Fortunately, the RSC plan would claw back the Medicaid expansion and give the freed-up funding to states to cover high-risk (i.e. cancer, HIV patients) and low-income patients as they see fit. Some of these arrangements could include high-risk pools, in which states cover claims of privately-insured individuals over a certain threshold. Insurers wouldn’t have to worry about covering sickly individuals, and in exchange, the state would take a portion of these individuals’ premium income to ensure that insurers weren’t rigging the system and “dumping” high-risk patients into the state pool. Maine used this kind of approach before Obamacare became the law of the land, and by all accounts, it worked well and kept costs under control.
These state-funded backstops are important, but under the study committee’s proposals, individuals mostly wouldn’t need to use them. The plan empowers households to use Health Savings Accounts (HSAs) to purchase health insurance tax-free, a perk that currently only applies to employer-sponsored plans. Families and individuals would be able to use these tax-free contributions to pay for a far wider range of services, such as telemedicine, primary care subscriptions, and alternatives to health insurance sponsored by religious organizations. This increased flexibility opens up a wide range of choices to patients not currently permitted under the status-quo and makes it less likely that beneficiaries will need to access expansive government programs to get the care they need.
The RSC’s plan may not be perfect but represents a promising step forward for healthcare reform. Americans needn’t choose between bankrupt, government-centric plans and the faltering status-quo. Millions of patients across the country deserve a better system that caters to their needs without breaking the bank.
Catalyst articles by Ross Marchand