The Affordable Care Act passed because millions of Americans could not afford insurance and were often denied access to care. This put lives at risk and cost us all the immense economic and social benefits of a healthier population. The ACA used savings from Medicare and slightly higher taxes on very high incomes to expand access to coverage and timely care.
More than 20 million gained coverage since 2014, but out of pocket costs for many are still too high, and some previously insured are angry about paying higher premium. Many who saw higher taxes want them lowered. Most ACA markets are stabilizing, but others have lost all insurers. Health policy is hard, but something MUST be done.
{mosads}The Republican “replace” proposals so far would cut taxes but they would also reverse the ACA’s coverage expansion — the reason for the law’s passage in the first place. And in the name of increasing freedom, the breadth of coverage for many would shrink. The net result, clarified repeatedly by nonpartisan analysts, is tens of millions more uninsured and higher out of pocket payments, perhaps enough to deter necessary care altogether. Not a good bargain for our country, nor what candidate Trump promised his supporters.
We can do better, but it will take a level of honesty and bipartisan cooperation that seem like a distant memory. First, Republican leadership must admit that cutting subsides as proposed will hurt millions who have coverage thanks to the ACA. And Democrats must admit that some were hurt by the ACA. The following five steps should help.
Define shared goals. Politics polarizes when leaders pretend they share no goals with the “other side.” But most of us are willing to tax the wealthiest to enable all Americans to get the care they need, as long as taxes remain reasonable and beneficiaries demonstrate personal responsibility with respect to their own health and public dollars. These shared goals could become a guidepost for all future reforms.
Stabilize the ACA Marketplaces. While most were stabilizing in early 2017, some ACA markets have suffered from a less healthy risk pool than expected and from broken government promises originally intended to compensate for higher risk. Simply put, these markets need more healthy customers.
The solution is a three-legged stool. No. 1: More generous subsidies, so that more healthy people like the “deal” offered. No. 2: Increase the penalty for being uninsured, so the consequences of not paying one’s fair share in expectation of getting free care in an emergency, drive more to purchase. No. 3: Restore the risk reducing features of the ACA (reinsurance, risk corridors and risk adjustment) which enable insurers to compete on price and customer service, not by avoiding those with pre-existing conditions. The increased subsidies could be financed by a cap on the $300 billion exclusion from income and payroll taxes of employer premium payments for workers, which Speaker Paul Ryan’s Better Way plan — and every living economist — embraces.
End the ACA’s employer mandate. This costs far more than it’s worth. Firms that can offer good benefits to compete for workers. Firms that can’t should raise wages and send workers to the marketplaces, where they can get more choice and better subsidies than small employers can offer.
Give the states flexibility to align and streamline programs. Medicaid costs more than anyone likes, but the solution is more a scalpel than a sledge hammer, and to acknowledge that smarter spending on social determinants of health may reduce total government spending and taxes while improving health outcomes and well-being for the most vulnerable among us.
Foster paying for value and patient engagement. Some ACA experiments, which pay for improved health outcomes rather than volume, have proven successful, others not so much. In designing payment reform 2.0, we need to acknowledge that most wisdom about incentive realignment — the true key to affordable healthcare for all in the long run — resides outside Washington, DC. Multi-payer reform initiatives, and a strengthened information infrastructure to reduce providers’ burden and help patients manage their own care better, are sure pathways to higher value.
So let’s drop the charade of repeal and the mirage of single payer in the United States. Embrace the sustainable bipartisan work that can improve peoples’ lives, now. Open the process so stakeholders can debate and improve the outcome. Legislate for the public good we all want, access to care that lets us thrive, at a price we can all afford.
Len M. Nichols directs the Center for Health Policy Research and Ethics at George Mason University in Fairfax, Virginia. Bob O’Brien is a recently retired EVP, Health Plan Division, Group Health Cooperative of Seattle.