It is obvious that Repeal and Replace shouldn’t and won’t happen.
After bussing republican House members to the White House Rose Garden several weeks ago to celebrate House passage of the American Health Care Act, President Trump now “… bluntly derided a House attempt to repeal the Affordable Care Act as “mean,” “ and said “that he expected the Senate to come up with something more generous…” (A)
President Trump tweeted “”2 million more people just dropped out of ObamaCare,” “It is in a death spiral. Obstructionist Democrats gave up, have no answer = resist!” (B)
We know that the Obama administration planned to look at the following changes: Expand The Medicaid Expansion; Simplify Health Insurance Plans; Fix Surprise Medical Bills; Extend Coverage For Kids; Buff Up The Cadillac Tax; Improve Insurance Provider Networks; Rein In Prescription Drug Costs (C)
Any big new program like Obamacare has a “million” moving parts and some assumptions in the initial algorithms need to be recalibrated. Fortunately there has been plenty of evaluation and recommendations to do a mid-course correction to maintain access and address affordability.
Here is a list of approaches that must be considered:
Some initial corrections: (D)
1. Patch things up: Since affordability is a big issue, the federal government could spend more money to bring down the costs that individuals and families face. This could be done directly by raising the level of subsidies available for plans purchased on the exchanges, or raising the income thresholds at which the subsidies phase out—or both. Alternatively, the government could offer more generous subsidies to insurance companies, particularly those serving high-risk populations, in which case they wouldn’t have to raise prices as much, or impose such large deductibles.
2. Apply some force: One of the big problems that insurers are facing is that too few healthy people, and too many sick people, are signing up for the plans sold through the exchanges. For insurers, that changes everything. Faced with higher claims per enrollee than they expected, they seek to raise their prices, which makes healthy people, especially young healthy people, even less likely to sign up the following year. If unchecked, this process could lead to a spiral of rising prices and falling enrollment.
3. An obvious way to address this problem would be to drastically raise the fines that people face if they don’t purchase insurance. Under the terms of the Affordable Care Act, getting enrolled wasn’t meant to be a choice—it was a legal obligation. For political reasons, however, the penalty for flouting this “individual mandate” was set at a very low initial level, which is supposed to grow gradually. In 2015, the fines started at three hundred and twenty-five dollars per adult
4. Generally speaking, private insurance markets only work well when there is a large and diversified risk pool. If we are going to rely on them to provide universal, or near-universal coverage, the individual mandate will have to be enforced. That means raising the penalties for non-compliance and enforcing them effectively.
5. The Public Option: The rising cost of health care is an issue all over the world. The way most countries have dealt with it is by enrolling the entire population, or almost all of it, in a single-payer system, and using the bargaining leverage that creates (usually coupled with administrative fiat) to keep down costs. So far, the American political system, which is highly vulnerable to capture by powerful interest groups, such as doctors, hospitals, and pharmaceutical companies, has resisted going down this route. But this may be changing.
Stabilize the marketplace: (E)
6. “Marketplaces will only succeed if enough insurers participate, and many are running away from what they perceive as a high-risk, low-reward market opportunity,” …..All of this — insurer withdrawals and sharply escalating premiums — was avoidable and is fixable. We know how to draw insurers into markets, keep them there, and limit premium growth. We can do so by subsidizing plans more and by limiting their risk of loss. We’ve done both before.”
7. The Medicare Modernization Act also established Medicare’s prescription drug program, Part D, which offers another lesson. It’s also run entirely through private plans. They’re cushioned against large losses by a risk corridor program. This helps plans stay in the market if they miscalculated the mix of patients they’d attract, and it allows them to keep premiums lower than they might need to if they had to hedge against the full brunt of potential losses.
8. The Affordable Care Act included a risk corridor program for marketplace plans, too, but it expires at the end of this year. So does a reinsurance program that compensates insurers for unusually high-cost enrollees. Following the model of Part D and making the risk corridor program permanent, as well as the reinsurance program, could help stabilize the marketplaces.
Policy fixes that could plausibly improve Obamacare and attract bipartisan support. (F)
9. Defuse the Crisis. The leading enemy of stability is uncertainty, and for insurers who must decide what to do about the exchanges by June, the leading source of uncertainty before last Friday was the Republican repeal push itself. That threat has apparently subsided, but the House lawsuit over cost-sharing subsidies could still blow up the exchanges. The House put the suit on hold after Trump’s election, anticipating Obamacare’s repeal, but if the Republicans want to avoid a major mess, they need to make the suit go away and make sure the subsidies keep flowing.
10. Insure the Insurers: The Democratic push for health reform in 2010 relied on what The Washington Post described as “the near-daily demonization of the insurance industry.” Obama routinely attacked “insurance company bureaucrats who raise premiums and deny care.” Pelosi called them “villains.” And Obamacare included tough new rules that prohibited them from discriminating against customers with pre-existing conditions or capping how much they could spend on any customer.
11. Relax the Rules: The best evidence so far that the Trump administration hopes to prevent the kind of implosion the president keeps predicting is a new set of rules his Department of Health and Human Services recently proposed for the exchanges. The rules involve fairly modest adjustments for the 2018 enrollment, giving insurers more flexibility to offer slightly more generous plans while closing loopholes the insurers thought consumers were using to game the system. But they amount to an insurer wish list, which suggests a desire to keep insurers happy on the exchanges.
12. A Drug Deal: Obamacare has helped reduce the overall growth of health care costs to the lowest rate in half a century, but prescription drug prices have continued to soar. The cost of six brand-name diabetes medications rose more than 150 percent over the past six years. Multiple sclerosis drugs now cost more than $5,000 a month, increasing more than fivefold since 2001. Connolly says the nonprofit plans she represents now spend more on drugs than hospitalization. “That’s mind-boggling,” she says. “There’s no rhyme or reason to it, and it’s driving up premiums.”
Changes that would help bring down premiums on the exchanges. (G)
13. Require all insurers who want to sell in the individual insurance market to offer their plans through the exchange, so they couldn’t cherry-pick individuals outside the exchange (this is an idea championed by Henry Aaron of the Brookings Institution).
14. Reduce the waiting period for those on disability insurance to get Medicare coverage from two years to six months to move some of the very high-cost enrollees out of the individual-market pool.
15. Require any insurer that wants to offer a Medicare Advantage plan in an area also to offer a plan in the marketplace for under-65 enrollees.
16. Have the federal exchange adopt the procedures used by California in actively bargaining with plans instead of acting as a passive clearinghouses.
17. Create a public option for those aged 55-64 clearly identified as an early buy-in to Medicare.Create a second federally run public option for enrollees from 18 to 54.
18. Restore the risk corridor and reinsurance provisions that have expired that were intended to protect exchange plans against adverse selection.
A good summary – (H)
“First, despite some genuine problems, the Affordable Care Act is mostly working quite well.
Second, far from solving the problems of Obamacare, the Republicans’ AHCA would have made them worse.
Third, real leaders don’t run away from problems; they fix them. Fourth and most important, a compromise plan could have appealed to — and could still appeal to — enough members of both parties to pass.”
(A) Trump, in Zigzag, Calls House Republicans’ Health Bill ‘Mean’, by Thomas Kaplan, et al, https://www.nytimes.com/2017/06/13/us/politics/trump-in-zigzag-calls-house-republicans-health-bill-mean.html?smprod=nytcore-ipad&smid=nytcore-ipad-share&_r=0
(B) Trump: Dems ‘gave up’ on fixing ObamaCare, by Rebecca Savransky, https://www.nytimes.com/2016/11/15/upshot/politics-aside-we-know-how-to-fix-obamacare.html?_r=0
(C) How Obama Would Fix Obamacare If Congress Would Let Him, by Jeffrey Young http://www.huffingtonpost.com/entry/how-obama-would-fix-obamacare_us_56bcd8d6e4b0c3c550506e19
(D) Three Ways to Fix Obamacare, by John Cassidy, http://www.newyorker.com/news/john-cassidy/three-ways-to-fix-obamacare
(E) Politics Aside, We Know How to Fix Obamacare, Austin Frakt, https://www.nytimes.com/2016/11/15/upshot/politics-aside-we-know-how-to-fix-obamacare.html?_r=0
(F) Four Things Trump Could Do Right Now To Fix Obamacare, by Michael Grunwald, http://www.politico.com/magazine/story/2017/03/four-things-trump-could-do-right-now-to-fix-obamacare-214962
(G) Obamacare has some problems. Here’s how we can fix them, by Paul Waldman, https://www.washingtonpost.com/blogs/plum-line/wp/2016/10/25/obamacare-has-some-problems-heres-how-we-can-fix-them/?utm_term=.4f04717a4c90
(H) Want to fix Obamacare? Here’s how by Henry Aaron, http://www.nydailynews.com/opinion/fix-obamacare-article-1.3013226