A Simple Replacement Option for Obamacare?

Repeal and replace is the promised Obamacare fix from President Donald Trump and the Republican Congress.

What this will look like specifically remains uncertain. Yet somewhat disconcerting is a new “R” word that’s been entering the discussion — repair — meaning that Obamacare may not actually be repealed and replaced, but instead bandaged up and sent home with painkillers and instructions for a week of bedrest rather than the knee replacement that is inevitable and long overdue.

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Some aspects of Obamacare are actually popular with many Americans. President Trump said he would consider keeping the provisions that allow adult children to stay on their parents’ policies up to age 26 and that prevent insurers from denying coverage to those with preexisting conditions.

One major talking point among Obamacare proponents is that millions of individuals and families have been newly insured. Yet glossed over in this discussion is the fact that 97 percent of the “newly insured” growth is due to Medicaid expansion, according to the Heritage Foundation.

Despite being an Obamacare critic, as a physician I appreciate the benefits for physicians and hospitals of not having to suffer the financial hit of uncompensated care.

What if there were a way to parlay Medicaid expansion into the repeal and replace plan — creating universal coverage for all citizens and legal residents? Though I am an Obamacare critic, as a physician I would appreciate the benefits for physicians and hospitals of not having to suffer the financial hit of uncompensated care. Not to mention the headaches of multiple insurance plans with myriad rules and restrictions.

The universal coverage I’m suggesting — and this is my opinion — would also address coverage of young people up to age 26 and coverage for those with preexisting conditions, since everyone would have coverage. So how would this work.? Let me run some rough numbers.

According to the Centers for Medicare and Medicaid Services (CMS), U.S. health care spending was about $10,000 per person in 2015, with a total annual cost of $3.2 trillion for an U.S. population of 325 million.

Medicaid spending, per individual per year, on average is $5,800. This includes adults, children and those with disabilities.

Related: Let Obamacare Go for Real

Suppose Medicaid was available for all U.S. residents? The 15 percent of the U.S. population aged 65-plus would already be on Medicare. Assume another 35 percent of the population would “buy up” from Medicaid, purchasing private insurance at their own expense for better coverage or expanded treatment options.

This would leave half the population actually using Medicaid, or about 160 million individuals. Using the annual Medicaid spending figure above, this translates to annual spending of $930 billion, below the trillion-dollar Obamacare price tag and less than a third of current total health care spending.

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Understand these are rough calculations that health care economists may quibble with, but the point is — this may be an affordable way to get some of the current coverage monkeys off the back of a repeal-and-replace plan.

The downside is that Medicaid-for-all would have fewer bells and whistles than current insurance plans. That would mean coverage only for catastrophic and significant problems: insuring your car against major damage, not for an oil change or a cracked windshield.

Use the Oregon Medicaid plan as a blueprint. Rank all covered services, tests, and medications. After input from health care providers, the public, and other stakeholders, rank the services and then draw a line based on available funding. Above the line is covered — below the line is not. Review each year with new rankings and a new line. Not perfect but reasonable. A Honda rather than a Lexus.

Related: Poll: Americans Prefer Lower Costs to Obamacare Provisions

Then let the private insurance market be open and competitive, across state lines, allowing consumers to purchase only what they want and need. If employers want to offer private insurance to their employees, good for them. Insurance companies can compete based on benefits and cost. Everyone can buy what they want and can afford, like a home or car. No one will be left without insurance. Doctors and hospitals won’t be stiffed with unpaid bills.

The devil is in the details, but this would be a good start toward repealing and replacing Obamacare with something practical, affordable, and workable rather than the typical government repair plan — which is simply a Band-Aid on a broken leg.

Brian C. Joondeph, M.D., MPS, is a Denver-based physician and writer.