As part of the Affordable Care Act, the federal government adjusts reimbursements to health-care providers up or down based on the quality and cost-effectiveness of their services, as measured by a set of standards established by the Centers for Medicare and Medicaid Services (CMS). The standards use metrics such as how long emergency-room patients must wait to be seen and how long it takes heart-attack victims to get stents placed in their blocked arteries. The intention is to encourage savings and sound practices and enhance patient satisfaction.
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The election of Donald Trump as president, along with the Republican Party’s retention of both houses of Congress, sets the stage for the long-promised repeal and replacement of the Affordable Care Act (ACA), popularly known as Obamacare. Obamacare boosters warn that repeal would throw 20 million Americans who have gained health insurance coverage through the law back into the ranks of the uninsured overnight. The truth is more complex. Nearly half of the coverage gains made during Obama’s presidency had nothing to do with ACA provisions and will survive repeal. Many other newly insured people will keep their coverage—if changes are made to health-care financing, and if two popular ACA provisions President-elect Trump has spoken favorably of are retained.
Repealing most of the ACA, retaining a few provisions, and replacing programs in 2018 will rid the country of one the most contentious, complex, and wasteful pieces of social engineering ever enacted—and set the stage for a more efficient, consumer-centered health-care system.
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Ryan’s plan embraces the idea that refundable tax credits can be used to give people universal access to “quality, affordable health care.” It recognizes that we can’t return to the pre-Obamacare status quo, which was too arbitrary, too expensive, and too bureaucratic. It concedes that reforming Medicaid—including Obamacare’s Medicaid expansion—will be a gradual process, requiring a new infusion of federal funds to help cajole states into reforming their own health-care markets (which were hardly free and efficient before Obamacare).
These reforms envision portable, affordable coverage. Routine health expenses would be channeled through Health Savings Accounts. Private exchanges would compete to offer affordable insurance—as they already do for employers. Currently, employers’ spending on health insurance plans is tax-deductible and uncapped—meaning that if organizations want to buy $100,000 health plans and write them off, they can.
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