How to Fix the Affordable Care Act, Without Repealing it
The ACA (ObamaCare) does a lot of good, but it isn’t perfect, here is “a fix” for the ACA that addresses its sticking points rather than focusing on repeal oriented rhetoric. This plan fixes all individual gripes while not hurting any industry (phrama, insurers, providers, IRS).
QUICK INTRODUCTION: This plan represents the view of its author only. With that said, I’ve read HIP 2.0, the House “Better Way” plan, the Price plan, and of course Trump’s plan… and the ACA… and Bernie Sander’s Plan… and have researched Rand Paul’s ideas… and read the JAMA articles so I have a pretty solid idea of the wishlist of the left and right, libertarian and progressive, Democrat and Republican. Our fix really seeks to synthesize all these plans, we even drew our public option idea from the Burr, Hatch, and Upton plan to ensure the plan can seek increased coverage while remaining Republican in spirit. My hope is that, although I know it is naive, we can come together and ensure a great healthcare plan for the people like Trump wants and avoid partisan interests. Or, if nothing else, at least replace the continuous coverage provision with a buy-in public option similar to the Hatch idea and at least keep something like HIP 2.0 as a model for state Medicaid (even if it is block-granted).
The Keep America as Awesome as it Already is For the Next Generation Plan
ObamaCare does a lot right (like controlling costs), but it has some sticking points too, they are: premium costs, high out-of-pocket costs, the rejection of Medicaid expansion, the inevitable uncovered (ACA is not predicted to bring us to 100% coverage, due to plan drops, free choice, and the rejection of Medicaid), the family glitch (low income employees are getting shafted by employers), and general bureaucracy (cancellations and claims are a nightmare for everyone, insurers and CMS included).
Instead of detailing my fix for ObamaCare, i’m going to do the one page PDF-style like the politicians do (for another alternative plan, yes i’ve written more than one, see here):
- Whenever possible, the federal government should provide guidelines to a state to coordinate care at the local level. In theory communities and people know what they need best. Empowering people and communities, and even offering quality over quantity to regions and states, emphasizes a team spirit and state rights.
- The healthcare industry should be ethics driven, like the Doctor’s Hippocratic Oath. It should not be run like a corporation, but more like the Supreme Court. Even to the extent of stating our intentions and having some sort of ethics-based oversight of all related industries. We can do things like this, we are America. This doesn’t imply that the incentive has to be legal or overly bureaucratic, it just sets the stage for correct behavior.
- Eliminate insurance premiums. Expand CHIP to all children under 18. Expand Medicaid to all adults without chronic illness. Expand Medicare to all adults with chronic illness. 100% coverage automatically every year. Preexisting conditions shouldn’t matter for coverage, but in retrospect the pre-existing conditions pool allowed us to better predict costs. In this respect people who need constant care are in one large pool, everyone else is in an other. So two pools, but we have compulsory coverage, which means 100% coverage for citizens (immigration is another issue for another day). The trick is, we keep all the money set aside in a fund and only use it to pay for catastrophic claims as needed. In a well regulated system this should turn a crazy profit (just ask the insurers of today). NOTE: We reinvest the profit back into the pool (eliminating the need for additional funding over time, never mind if we can earn interest on it). NOTE: I tweaked some of these ideas in another plan, figure more brainstorming the better.
- Instead of premiums, insurance companies will provide deductible insurance. This works like the insurance of today, but covers non-catastrophic conditions and medication in regards to cost sharing. The system should be copay driven, to help incentivize shopping around and being conservative with medication needs (something the ACA already does). This eliminates plan drops and cancellations of premium coverage. The major insurers should be able to retain profits, especially if they structure advantage-like plans for even a portion of America’s 320 million and growing. Think about the freedom of not needing to cover the very sick for catastrophic care insurers. This is at least better than a straight up single payer. No?
- Eliminate the Mandates. We have automatic premium coverage as a tax (or tax credit), we don’t have anyone to penalize. This is the most costly change as we lose the revenue from the mandates (see CBO report that discusses the affects of ACA repeal).
- The Government sets aside a specific set amount of money for the Medicaid pool per-enrollee and a set specific amount of money per-enrollee for the Medicare pool (again this is tax funded per-enrollee based on income). The price is based on catastrophic coverage costs from last year adjusted for inflation. This money is pooled and is used to pay all claims related to essential coverage. All unused money is rolled over. It might get sticky, but technically we could borrow from the FED, invest the money in at say 1% expected higher yield than our interest and pay back the FED with that money (and retain a profit for the fund). Totally get that one not working though, seems risky.
- Reduce litigation, this isn’t taking away a patients rights to sue, it is reinforcing the idea that healthcare providers shouldn’t have to practice in fear of litigation. Quality over quantity, and denied claims by insurance shouldn’t be fear-based, it should based on positive incentives.
- Everyone gets an HSA (like a 401k for health), that is funded either with a tax credit or as a tax (depending on income and family size). Those with lower incomes won’t typically be able to fund an HSA, thus we shouldn’t expect this and they should get a credit. By limiting what the government pays for directly, and empowering people to choose how they spend money, we reinforce the ideology behind America. Catastrophic care would always kick in if someone made poor choices, but actually a voucher system has its merits if it isn’t a standalone solution.
- Allow employers to offset employee healthcare costs. To get the full benefit, the employer should cover the total premium costs (instead of the government). The deductible coverage should still have a tax benefit, but it should scale (to avoid gold plated insurance tax incentives for big corporations). This money is paid to the IRS (CMS / HHS, or whatever) directly for premiums, and to the insurer indirectly for deductible coverage. It is tempting to lay lots of regulations on employers, but handing them an olive branch and a little less paperwork might improve spirits. Large cooperations, say 100 or more FTE with X amount of profits can easily play by a different rule-set than growing smaller companies who are driving our communities at a smaller profit margin.
- Medicaid / Medicare can debate prices with phrama, and with local healthcare providers. Establish 80 / 20-like rules across the board. Also, enough of the garbage patents that hold back innovation and jack up costs, and enough of the grey-area indirect incentivizing of doctors to push unnecessary drugs on people (I get it is only sales people, but this is healthcare… not some incidental widget). Pharma needs to get ahead of change before it comes to their doorstep. I get that it is tempting to do business as usual, but it is in the good of the nation. Plus, America is running out of places to point fingers. The finger pointing is coming, getting out ahead of the finger wag is a much better long term tactic.
- Reduce unnecessary regulations, regulation, subsidization, and taxation these are the tools of governance. That said, it would likely lift the spirits of phrama, insurers, providers, and business if some (perhaps partially unnecessary) regulation could be lifted in favor of ethics and oversight. It is a more friendly and less paper-work-y sort of tactic. An olive branch alternative to special industry backdoor lobbying shenanigans. NOTE: Yes we can regulate and reduce regulation at the same time. Life and governance are nuanced, eliminate bad regulations and implement good ones. An all or nothing mentality isn’t useful in problem solving.
- Tax credits should be given for participating in wellness programs, not just through the workplace, but through local healthcare providers and community centers. A larger focus on wellness and community means less healthcare bills. If people get a tax break for being healthy and participating in the community it gives those unable to work full-time a way to earn their assistance.
- A transparent tally of costs at a regional, state, and national level should be kept. If an industry is sticking out like a sore thumb, jacking up the costs of everything, they should pay a tax on profits that goes back in to fund premiums.
- American healthcare companies should be focused on America. We hear about companies finding loopholes to kick money down the road outside of the US or to claim profits at a lower tax rate. This behavior is a response to the overburdening tax rate, and that needs reform. With that said, If young men and women can put on a uniform and fight for the country, and pay their fair share of taxes on the money they make, you can pay taxes on the money you make from American healthcare. It doesn’t mean we shouldn’t do business with the world, it means that if you are an American company you should act like it. Once we have 100% coverage and aren’t going into debt, then we can talk about where to stash the extra money. I get the top tax rate isn’t even remotely fair, and loopholes need tightening, and we should do both these things. In the meantime, bite the bullet, have some pride in your country, and pay your fair share.
- Everything else essentially stays the same. Why throw out the other 900 pages of reforms that are working? We dealt with subsides, burdensome regulation, paperwork, and the mandate. That was really all anyone cared about anyway.
Aside form the above mentioned, the general focus should be on prevention, regulation, and eliminate billing in claims regard to catastrophic coverage with limiting taxpayer burden and incentivizing positive psychology and American values. I think things like letting insurers sell across state lines could work under this plan, it might even get republican support with the reduced litigation, ACA, vouchers, and not exactly single payer aspects.
This plan doesn’t necessarily save any money (at least in the short term, I dunno, i’m not the CBO), but it fixes a lot of the sticking points. Well, it has some good points at least. I’ll be adding to this over-time and curbing my exact ideas.