President Donald Trump sucks so much oxygen out of the daily news cycle that it is easy to forget other mightily important issues. One such qualifier is health care reform — presently relegated to the back burner as Bob Mueller and Stormy Daniels dominate the national headlines.
But it would be a mistake to conclude that the GOP’s failed Affordable Care Act (Obamacare) repeal effort is the most recent — or important — development within the health care narrative. Facts on the ground reveal a far more promising environment.
The Trump administration, congressional Republicans, and judicial decisions have helped mitigate Obamacare-inflicted damage while incrementally replacing it with more consumer-friendly, real-world solutions.
1.) Corridor payments. Recall how Congressional conservatives resisted attempts to throw additional taxpayer dollars into failing Obamacare exchanges, even taking the Obama administration to court in order to forestall unauthorized spending by the executive branch.
As expected, insurers sued for their promised cut of the money. (These taxpayer dollars had been dangled as bait by the Obama administration in order to secure the industry’s political support for Obamacare.) Ultimately, the Federal Circuit ruled Congress lawfully withheld risk corridor funding.
At least in this case, the time-tested Washington, D.C., practice of repeatedly subsidizing failure while hoping the taxpayers look the other way was thwarted. Score one for fiscal restraint and the rule of law.
2.) Lighter options. The Obama administration rejected the concept of shorter-term, more flexible (“mandate light”) plans that may have appealed to consumers uninterested in Obamacare’s expensive exchange plans.
Even Obama’s three-month cheaper option did not exempt consumers from the individual mandate penalty. Obama needed everyone in his exchanges for his health care math to work.
But now the Trump administration has proposed an extension of the lower-cost option, but without the added burden of the mandate (now zeroed out by the Trump tax cut and reform bill) and other Obamacare-mandated benefits such as prescription drug coverage.
“Obamacare was flawed from the jump. Its presumptions were cynical, especially its reliance on mandates to force younger, healthier people to pick up the health care tab for older, sicker people.”
The new rule allows for extensions of up to 36 months. The primary beneficiaries will be non-poor (unsubsidized) working and lower-middle class consumers who are hurt by higher premiums, higher deductibles, and carrier flight from the exchanges.
Opponents complain the option will attract younger, healthier enrollees, further pressuring the already-underwater exchanges. But such is the byproduct if government is to expand affordable choice within the health care marketplace.
3.) IPAB. Included in the 2017 tax reform bill was repeal of the much maligned Independent Payment Advisory Board (IPAB). You may recall this beauty was designed to foist price controls on Medicare reimbursement. Much criticism was directed at its powerful, unelected governing body.
Obamacare’s drafters made it especially difficult to appeal its decisions. Thanks to Trump, IPAB is now gone and forgotten.
4.) Association health plans. Another pressure point concerns association health plans (AHPs). Obamacare forced businesses with 50 or more employees to provide heavily mandated coverages that many employees did not need or want.
One unfortunate byproduct was a conversion of full-time employees to part-time employees. Other employers simply dropped their health care coverage. Enter the Trump administration’s new rule expanding the scope of association plans.
Experts project that between 4 million and 5 million people over the next four years will leave the individual and small group markets for new AHPs. Such plans are popular with many Republicans, as they allow small businesses and the self-employed to band together and thereby achieve economies of scale.
Accordingly, they feature choices at less expense, but fewer benefits as compared to Obamacare plans. Here again, fewer mandates and cheaper options will entice younger people and further destabilize Obamacare’s exchange plans.
5.) Health savings accounts. This increasingly popular option accomplishes two policy goals: First, it maximizes health care freedom; and, second, it encourages health care consumers to consider the real, unsubsidized price of care as part of the purchasing process.
There were approximately 22 million HSAs in America at the end of 2017, up 11 percent from 2016. Each new account nudges U.S. health care consumers away from our price-distorting third-party payer delivery model and toward marketplace-pricing freedom to choose. Not a bad deal.
The bottom line: Obamacare was flawed from the jump. Its presumptions were cynical, especially its reliance on mandates to force younger, healthier people to pick up the health care tab for older, sicker people.
Obamacare sought to rearrange an entire insurance market rather than focus on a critical need: How to secure affordable insurance for the non-Medicaid qualifying working poor and working class. It was a one-size-fits-all, mandate-heavy political compromise with too many moving parts.
Reformers must maintain their moral and political obligation to the underserved by “replacing” Obamacare with options that provide the near-poor access to affordable care.
To boot, even Obamacare’s much ballyhooed pre-existing condition disclaimers have proven flawed.
Recent studies reveal how insurers that offer high-quality coverage for the very sick — including those who receive tax subsidies — do so at a loss. Accordingly, as more expensive older folks continue to sign up, the carriers are forced to raise prices or leave the market.
The foregoing does not lend itself to a 10-second sound bite. Insurance issues can be complex and confusing. Nevertheless, Republicans are proceeding on numerous fronts to further downsize Obamacare’s decaying infrastructure.
In the process, they must better explain their policy initiatives to an audience that does not understand what Obamacare did, let alone what it looks like today. While they’re at it, reformers must maintain their moral and political obligation to the underserved by “replacing” Obamacare with options that provide the near-poor access to affordable care.
It’s no easy task — but is still desperately needed.
Former Gov. Robert Ehrlich was Maryland’s chief executive from 2003 to 2007. He previously served four terms in the U.S. House of Representatives from Maryland’s 2nd Congressional District. He is the author of “Bet You Didn’t See That One Coming: Obama, Trump and the End of Washington’s Regular Order.”
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