A Fix for the ACA (ObamaCare)

How to Fix ObamaCare (the Affordable Care Act)

We explain some ideas for how to fix ObamaCare (the Affordable Care Act). The goal is to seek universal coverage and fix the ACA’s sticking points.

A Quick Introduction

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. Trump wants a great healthcare plan for the people. If we avoid partisan interests, we can have one. We can fix all the individual gripes without hurting any industry (pharma, insurers, providers, or the IRS).

THE PLANS ON THE TABLE: I’ve read the new “TrumpCare 1.0 / the AHCA,” HIP 2.0, the House “Better Way” plan, the Price plan, and of course Trump’s plan on his site and the ACA and Bernie Sander’s Plan and have researched Rand Paul’s ideas and read the JAMA articles. I have a pretty solid idea of the wish list of aims of the left and right, libertarian freedom caucus and progressive Berniecrat, Democrat and Republican. We can make the ACA workable if we synthesize all these plans, draw a public option idea from the Burr, Hatch, and Upton plan and make sure the revised ACA plan can increase coverage while remaining Republican in spirit. If nothing else, we could replace version of the continuous coverage provision with a buy-in public option similar to Hatch’s idea and at end up with something like HIP 2.0 as a model for state Medicaid, whether block-granted or not.

The Keep America as Awesome as it Already is For the Next Generation Plan

The ACA, 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 existence of people without coverage, the family glitch, and general bureaucracy. Cancellations and claims are a nightmare for everyone, insurers, and CMS included. Low-income employees are still getting shafted by employers. These are problems we should address.

Here is a one-page, PDF-style plan. I’ve written more than one; see here for alternatives:

• Whenever possible, the federal government could provide guidelines to a state to coordinate care at the local level. In theory, communities and people know what they need best. We need to empower people and communities and offer quality over quantity to regions and states. This emphasizes a team spirit and state rights.
• The healthcare industry could be ethics driven, like the Doctor’s Hippocratic Oath. In my view, it should not be run like a corporation, but more like the Supreme Court. We need to clarify our intentions and have an ethics-based oversight of all related industries. We can do this; we are America. We don’t need another bureaucratic mess, but we do need to reign in unchecked profit-seeking in medical corporations.
• We could eliminate insurance premiums, expand CHIP to all children under 18, expand Medicaid to all adults without chronic illness, and expand Medicare to all adults with chronic illness. We could have 100% coverage every year. Preexisting conditions shouldn’t matter for coverage, but in retrospect, the pre-existing conditions pool allowed us to predict costs better.  It is worth exploring the possibility of putting people who need constant care are in one large pool, and everyone else is in another. However, it is important not to make care unaffordable for the chronically ill. We could have two pools, but have compulsory coverage, which means 100% coverage for citizens. Immigration is an issue for another day. It might work to keep all the money in a fund set aside to pay for catastrophic claims as needed. In a well-regulated system, this should turn a profit. Ask the insurance companies. NOTE: We could reinvest the profit back into the pool and possibly eliminate the need for additional funding over time as well as earn interest on it. NOTE: I tweaked some of these ideas in another plan.
• Instead of premiums, insurance companies could provide deductible insurance. This works the same way as insurance today but covers non-catastrophic conditions and medication with cost sharing. The system should be copay driven, to help incentivize shopping around and being conservative with medication needs. This is something the ACA already does. This might help eliminate 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 population. The WHO has found that up to half the people who have prescribed drugs do not take them.^[1] If people had more of a stake in their medications, they might be more compliant, and we would all waste less money.
• We could eliminate the Mandates. We could provide automatic premium coverage as a tax or tax credit; we don’t have anyone to penalize. This would be the most costly change as we lose the revenue from the mandates (see CBO report that discusses the affects of ACA repeal). However, it is one that Trump has already moved toward.
• The Government could set aside a specific set amount of money for the Medicaid pool per-enrollee and set specific amount of money per-enrollee for the Medicare pool. This would have to be tax funded per-enrollee based on income. The price would most likely be based on catastrophic coverage costs from last year adjusted for inflation. This money could be pooled and used to pay all claims related to essential coverage. All unused money could be rolled over. It might get complicated, 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. This may or may not be workable. I leave that to our representatives.
• We could reduce litigation. We need not take away a patients rights to sue, but healthcare providers shouldn’t have to practice in fear of opportunistic litigation. I would expect a push back from the large industry of personal injury lawyers. There are somewhere around 93,000 personal injury lawyers in America today.^[2] They earn an average of $76,322 per year.^[3] Nobody want to lose their job or suffer a pay cut.
• We could give everyone 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 credit. By limiting what the government pays for directly, and empowering people to choose how they spend money, we reinforce our American ideology of self-reliance. Catastrophic care would have to be available for those who made poor choices or had bad luck. However, a voucher system has its merits even if it isn’t a standalone solution.
• We could 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 could still have a tax benefit, but it should scale to avoid gold-plated insurance tax incentives for big corporations. This money would be paid to the IRS  or 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 and cooperation. Large corporations of 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 pharma, and with local healthcare providers. They might establish 80/20 rules across the board. I see us needing to stop holding back innovation and jacking up costs. I think we have had enough of the grey-area indirect incentivizing of doctors to push unnecessary drugs on people. Pharma needs to get ahead of change before it comes to their doorstep. America is running out of places to point fingers.
• We could reduce unnecessary regulations. Regulation, subsidization, and taxation are the tools of governance. However, it would probably improve the efficiency of pharma, insurers, providers, and business if some regulation could be lifted for ethics and oversight. It is an olive branch that could be held out as an alternative to special industry backdoor lobbying. NOTE: We could regulate and reduce regulation at the same time. Life and governance are nuanced; we could eliminate inefficient regulations and implement efficient ones. An all or nothing mentality isn’t useful in problem-solving.
• Tax credits could 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 fewer health care 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.
• We could keep a transparent tally of costs at a regional, state, and national level. If an industry sticks out like a sore thumb and jacks up the costs of everything, perhaps they should pay a tax on profits that goes back to fund premiums.
• American healthcare companies should be focused on America. We hear about companies finding loopholes to take advantage of tax breaks outside of the US or to claim profits at a lower tax rate. This behavior is a response to the overburdening tax rate. Whether unsustainably high tax rates are real or perceived, the tax system needs reform. It was one of the campaign points Trump made that resonated with the American people. If young men and women can put on a uniform and fight for the country and pay their fair share of taxes, C.E.O.s and other profit-makers can pay taxes on the money they make from American healthcare. We can still do business with the world but, 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 invest the extra money. I understand that the top tax rate isn’t even remotely fair, and loopholes need tightening; we should do both these things, but tax reform will not happen overnight. In the meantime, bite the bullet, have some pride in your country, and pay your fair share.
• Everything else could stay the same. Why throw out the other 900 pages of reforms that are working? We dealt with subsidies, burdensome regulation, paperwork, and the mandate. That was what people care about most.

We can redirect our focus from party politics to improving the ACA. We deal with prevention and regulation, reduce the complexity of billing claims, provide catastrophic coverage, limit taxpayer burdens, and incentivizing American values.

We may not save any money in the short term, but if we deal with the problems of the ACA, Trump could make sure that everyone has insurance as he promised.

1. Medication Adherence
2. How Many Personal Injury Lawyers are there in the United States?
3. PayScale Personal Injury Lawyer