Experience Must Shape the Next Affordable Care Act

To jumpstart the process of repealing and replacing the Affordable Care Act (ACA), Republicans recycled Restoring Americans’ Healthcare Freedom Reconciliation Act of 2015 (aka H.R. 3762) a bill that they had approved earlier.  This “partial repeal bill does not get rid of Obamacare’s tens of thousands of pages of insurance regulations, the regulations that are responsible for the law’s drastic premium hikes.”  Many observers have written about the next Affordable Care Act in terms of current provisions that can be jettisoned or that should be retained in any replacement.

The Urban League estimates that 22.5 million people are likely to lose insurance through any repeal of ACA’s Medicaid expansion. As well, there are 15 million who enrolled directly for health coverage in ACA’s insurance markets, and another 150 million who rely on job-related insurance arrangements.  The number of uninsured was between 13.4% and 15% or about 46 million people in 2014.

Many with job-related health insurance faced disruptions in doctor-patient relationships in order to achieve “compliance” with ACA ultra-broad coverage demands.  The ACA itself covers just 15 million directly, but it has blunt force impacts on the other 300 million people in the USA.

The following ACA provisions are popular, unpopular, or their cost may lead them to being jettisoned:

  • Popular features likely to be in any replacement healthcare bill include; coverage irrespective of pre-existing conditions, inclusion of 26-yar old children on parents’ policies, and no cap on coverage.
  • ACA provisions likely to be ditched are those that undermine an existing doctor-patient relationship, use of familiar hospitals and providers, and those which force a choice of being covered or facing tax penalties.

The ACA’s extra-broad mandatory coverage is an issue.  You can always find a handful who like niche coverages, but much of the population finds that treatment for drug addiction, maternity care, sex changes, free contraception and injuries from daredevil sports are unnecessary and expensive.  They want neither those coverages nor their coverages’ cost in the premiums they pay.  These overbroad coverages contribute to out-of-control premiums damaging ACA consumers who are unsubsidized and often can afford neither the premiums nor the out of pocket costs.  Some think that health care is civil right.  It is not.

The refusal to allow competition from out-of-state health insurers is another self-inflicted ACA flaw that undermines competition.  Consumers cannot afford the pretense that one state’s medical regulators are smarter than another’s.  This inter-state xenophobia should be dumped.

The ACA’s insistence that youngest customers are charged at least one-third what the oldest are charged repels young consumers in good health. Likewise, setting a high minimum actuarial value will attract less competition and less innovation.  Rates should be set based on costs and competition, not some opinion of what constitutes stylish social justice.

Part of the thinking in the repeal and replacement of ACA was to cut “some or all of the funding to states that have expanded Medicaid coverage under Obamacare.”  Some hope to reduce those federal subsidies by sending a federal block grant for each state.  That will force states to handle a funding gap, but since most do not have spare funds, it would lead states to either “slash Medicaid eligibility, cut reimbursements to providers or cover fewer health services, unless they raised taxes.”  States could institute managed care, where a per capita amount was paid to health providers to cover all health services for that patient.  The combination of block grants and managed care capitation would shrink provider incomes and create discontent.  Furthermore, those tactics will enlarge the inflow of uninsured patients who arrive for costly emergency room treatment.  Hospitals would bear the brunt of reduced Medicaid funding, but all patients will feel the effects.

One sometime suggested health care initiative is to require that Medicaid, Medicare and Veterans Affairs negotiate competitive prices for drugs that the government pays.  Some have suggested that those negotiated prices should not exceed what US drug makers charge to any foreign buyer.

Emma Court in Marketwatch Feb 3, 2017 listed eight provisions in ACA that might surprise some.  To the extent they require federal funding, or they impose cost on consumers, they may be omitted in a replacement bill.  ACA requires calorie labelling in menus of chains with 20 or more restaurants. Few of us will find this helpful and it reeks of other nanny-state coercions such as using menus for alerting us to sodium, sugary drinks and trans-fat.  Although electronic health records implementation are coerced by ACA they are frequently incompatible and are often used inefficiently.  Employees nursing their children must be given suitable space and break time for that purpose, a reasonable demand.  ACA funds community health workers to educate underserved consumer populations on the health care system (so complex, it requires tutors!).  The Biologics Price Competition and Innovation Act of 2009” could provide faster approvals to competing lower cost biologic medications.  The savings could amount to $250 billion.  ACA also tries to reduce out-of-pocket costs that fall into the Medicare drug donut hole.

On the other hand, ACA limits what tax-exempt health care savings accounts can be spent on.

Some ACA provisions are useful and some are just bureaucratic tinkering.  There is no evidence that the authors had faith in American consumers’ ability to spend healthcare dollars wisely.  In any replacement for ACA, more consumer options, fewer consumer mandates and an obsession with cost aversion is needed.

 

 

FacebooktwitterredditlinkedinFacebooktwitterredditlinkedin