Repealing the Affordable Care Act is not enough. The country has been drifting toward full federal control of health care for decades. What’s needed is a credible plan to reorient federal policy across the board toward markets and the preferences of consumers and patients, and away from one-size-fits-all bureaucratic micromanagement.
Lanhee Chen and James Capretta, along with 8 other colleagues, have developed such a plan. This plan would:
– Retain employer coverage for 155 million Americans
– Provide age-adjusted tax credits to individuals without employer-sponsored coverage
– Allow for continuous coverage protection
– Reform the Medicaid and Medicare programs
– Expand the use of Health Savings Accounts
In the wake of Louisiana governor John Bel Edwards’ announcement last week that his state would expand Medicaid under ObamaCare, the White House rolled out a new scheme to persuade the 19 states that are still holding out to fall into line and expand their programs: throw more money at them.
But these state officials should resist the temptation, for at least three reasons:
- First and most obvious is that expansion states have all experienced the same thing: More people signed up than expected, and it blew a hole in the states’ budgets.
- The second reason is that there’s no such thing as “free” federal dollars. The money comes with conditions, which effectively shifts policymaking from the receiving state’s legislature and governor to a distant federal bureaucracy (in this case, the Centers for Medicare & Medicaid Services), which dictates how states must spend federal Medicaid funds.
- The third reason is less abstract: Medicaid will harm those it’s meant to help. Often lost in the expansion debate is that Medicaid is the worst form of health coverage in the country.
Last week’s seven-candidate debate hosted by the Fox Business Network once again found much to discuss in terms of national security issues, immigration law enforcement, even a little economic policy, and, of course, the latest round of character attacks and counter-attacks. Still missing in action: at least the first subcutaneous probe of where the respective candidates stand on health policy issues.
Based on recent performance, it’s questionable whether health policy has attracted sufficient interest among the media and Republican primary voters to command more than a few seconds on the debate stage. But it’s not for lack of potential lines of inquiry.
Here are some questions to the candidates from Tom Miller of the American Enterprise Institute that still await new rounds of oversimplified, evasive, or (one might hope) thoughtful answers.
Moving to single-payer in the U.S. would require massive new taxes that would stifle growth, and consolidating all power over the health system in the federal government would lead, in time, to second-rate health care for many millions of people. Democrats praise Medicare’s simplicity, but giving the Medicare bureaucracy the power to set prices for all medical services in the U.S. would lead to the misallocation of billions of dollars.
The federal government has no good way to know what the proper price should be for the thousands of different services provided to patients, and thus would overpay for many while underpaying for many others. The result of applying this kind of mindless regulation system-wide would be impaired access to many needed services and the slow exodus of the nation’s best and brightest out of medicine and into other pursuits.
The ObamaCare “risk adjustment” program was designed to support health plans with lots of sick, expensive customers by giving them money from plans with healthier customers. The goal is to help keep insurance markets stable by sharing the “risk” of sicker people and removing any incentive for plans to avoid individuals who need more medical care. Such stability is likely to encourage competition and keep overall prices lower for consumers, while its absence can undermine both and limit coverage choices—the basic principles of the law.
Yet the way the Obama administration has carried out this strategy shows another unexpected consequence of the 2010 health care law. Critics say the risk adjustment program is having a reverse Robin Hood effect—taking money from some plans that are small, innovative or fast-growing, while handing windfalls to some of the industry’s most entrenched players.
iMost of the people who tell you that consumerism can’t work in health care tend to work in health care themselves. But if they were doing such a great job, maybe our health care system wouldn’t be riddled with high costs, fatal medical errors, and hundreds of billions of dollars in waste and fraud.
Companies in other industries – from Wal-Mart to Trip Advisor, Amazon, and Google – have figured out ways to simplify incredibly complex systems to lower the amount of time and the cost for consumers to identify affordable, quality products. Those companies have just one thing in common: they answer to consumers.
Rather than focusing on how health care worked in the past, policymakers should encourage competition by clearing away outdated regulations that prevent savvy, tech-based entrepreneurs from empowering patients with the information they need to find the providers who deliver the best outcomes – often at a more affordable cost.
The health care law is gradually finding its niche as an entitlement for what the Census Bureau defines as the “working class”–lower middle-class families that earn too much to qualify for Medicaid, but instead fall into the sweet spot of ObamaCare’s subsidies. Increasingly, these Americans will find themselves forcibly moved into ObamaCare, even if they currently have coverage sponsored by their employers.
A key number to watch from this year’s enrollment season is the percentage of enrollees who receive cost-sharing subsidies. It’s a fair bet that this will be the only number that rises by a notable margin over last year even as the rest of the program stalls. In the end, Americans are rational economic actors. Not only when it comes to who avoids the ObamaCare scheme, but who gets drawn into its grips.
A recent about-face by the Obama administration on so-called “state innovation waivers” may be the most important change to ObamaCare that no one is paying attention to. These waivers, which will begin in 2017, allow states to take a block grant of funding and waive nearly every major component of the law. A major change, however, is now set to make these experiments mostly impossible. In recent guidance, stealthily released at the close of business on a Friday last month, the Department of Health and Human Services announced that the rules are changing.
ObamaCare needs to be replaced with a plan that provides Americans with affordable coverage and reliable access to doctors. Fortunately, many Republicans — including the bulk of the GOP field running for president — agree on the core ideas behind a replacement plan.
Sally C. Pipes of the Pacific Research Institute lists some of those ideas, including replacing income-based subsidies on the individual market for refundable tax credits and reforming the Medicaid program.
The Congress has, for the first time, sent legislation to the president repealing great swaths of ObamaCare. The House passed repeal bills in every Congress since the health overhaul law was enacted, but the Harry-Reid-controlled Senate never acted, blocking the bills from reaching the Oval Office. Mr. Obama will veto the bill, of course, but it sets an important marker for action that Congress could take next year under a new president who would sign the legislation.