Last Friday, President Trump delivered a major speech from the White House Rose Garden on prescription drug prices. He announced several policies aimed at reducing the overall cost of pharmaceuticals and limiting patients’ out-of-pocket expenses.
His reform agenda, entitled “American Patients First,” is largely excellent. It mostly harnesses the power of free-market competition, rather than government price controls, to drive down costs for patients while continuing to incentivize drug manufacturers to invest in innovative, lifesaving research.
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First Charlie Gard and now Alfie Evans. These are babies who, though verbally silent, still gave clarion warnings to proponents of single-payer health care: The government — not my parents — is in charge of my life.
Charlie Gard was born in August 2015 with a rare genetic disorder that carried a poor long-term prognosis. In July 2017, little Charlie was just 23 months of age and on a ventilator. Over the objections of his parents, British doctors decided to withdraw life-sustaining care. According to British Courts, the National Health Service (NHS), the country’s single-payer system, is the ultimate medical decision maker — not the family. Ventilator support was withdrawn and Charlie died.
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Americans are active shoppers. Whether purchasing a car, a dishwasher, or a jar of salsa, we rarely buy anything without comparing the price and quality of available options. These days, shoppers have access to a wide array of tools online to inform our quest for value. Our demand for value is the engine that drives competition which, in turn, lowers prices and inspires innovation to improve the quality of the products we purchase.
Yet, when it comes to one of the most important services we receive — our health care — this consumer driven engine sputters.
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Oregon voters recently upheld a myriad of new taxes that were passed as part of a major health-care law last summer. The state government is planning to use the estimated $320 million in revenue to cover hundreds of thousands of residents who have enrolled through the Affordable Care Act. The outcome of this vote has serious implications anyone enrolled in a health-care plan in Oregon.
The referendum was on sections of House Bill 2391, which imposes a 0.7 percent tax on small hospitals as well as a 1.5 percent on individual and family health-care premiums. These revenue raisers are intended to generate more tax dollars for the state. But they also allow Oregon to receive $630 million to $960 million in federal Medicaid matching funds.
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Health care dominated the news cycle in 2017. Yet, for all the legislative wrangling and rhetoric, little changed this past year.
It is my job to listen to health-care consumers. They entered 2017 worried about the cost of coverage. They find themselves at the start of this year in the same place they ended the last. People want to know: What happened to the “affordable” part of the Affordable Care Act?
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The House and Senate recently passed tax reform bills because they successfully made the case that reform is a “once-in-a-generation” opportunity that is long overdue. It’s a compelling argument. When the last tax reform bill passed in 1986 the Internet was in its infancy and cell phones were the size of a briefcase. The world has changed, the argument goes, but our tax code has not.
What’s curious, however, is that the largest deduction in the tax code – the exclusion from income tax of employer-sponsored insurance, which dates back to the 1940s – is untouched by the reform bills. This omission is an enormous missed opportunity for American consumers and both political parties.
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At the core of Medicaid’s troubles is its provider reimbursement system, which is based on price controls. In general, it pays rates substantially less than those of private insurance and can even be less than the cost to deliver that care. According to a Kaiser Family Foundation analysis, in 2016, Medicaid reimbursed physicians across the country 72 percent of Medicare rates for all services and 66 percent of Medicare rates for primary care. In general, Medicare rates are already less than those of private insurance. With noncompetitive reimbursement and the administrative hassle of the program, many providers are reluctant to accept Medicaid patients.
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Congressional Democrats may be tempted to think they shouldn’t negotiate with Republicans on health care because, so far, the GOP has shown itself incapable of fulfilling its commitment to repeal and replace the Affordable Care Act (ACA). “Why rescue Republicans from their failure?” the thinking goes.
This is a short-sighted perspective. Yes, the GOP effort has stalled, but, absent some kind of bipartisan deal which brings more stability and consensus to health policy, it is still possible that Republicans will succeed in pushing substantial changes on their own, despite strong opposition from Democrats.
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It’s time for a new approach to fixing our broken health care system. A responsible Congress could consider this moment as a unique opportunity to address health care costs, take advantage of amazing new technologies and improve the overall health and wellness of Americans.
Here are ten proposals that Republicans and Democrats should consider and approach with bipartisanship, ensuring both government and Americans pay less and get better health care:
1. Cut drug costs.
2. Allow veterans to use convenient hospitals.
3. Trim Medicare costs by slowly raising the age and income eligibility.
4. Allow insurance to be purchased across state lines.
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Yesterday, Senate Majority Leader Mitch McConnell did the seemingly impossible and got the votes he needed to proceed to consideration of the House-passed plan for repealing and replacing the Affordable Care Act (ACA). At this point, it’s hard to tell what exactly will happen in the coming days, but there is one thing that is fairly certain: if the current Republican effort succeeds in passing a bill, the legislation will make the individual insurance market less stable than it is under current law.
The problem for Senate Republicans is that their principal policy goal is incompatible with the process they are using — budget reconciliation — to pass their legislation.
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