By backing a flimsy, state-initiated lawsuit to throw out the entirety of the Affordable Care Act, President Donald Trump has made himself and Republican candidates in 2020 vulnerable to attacks that they want to take health insurance away from millions of people.
The president compounded the problem by saying Republicans are going to become the party of health care without having any plan, let alone a coherent proposal that would produce better results and could get through Congress. Republicans are now deeply divided on what should be done, and the president is no help in setting a course for the party.
Yet not all is lost on the issue for Republicans. Many Democrats, by rushing toward a single-payer “Medicare for All” plan, are being pulled along by ideological yearnings instead of practical realities. Medicare for All would upend all current public and private insurance arrangements, including employer coverage for about 180 million people. Further, even the sponsors admit these plans would require significant middle-class tax increases.
What that means is that the door is open for a responsible Republican plan to improve the nation’s mixed public-private health system. If the party’s leaders were so inclined, they could take advantage of the Democratic overreach by embracing reforms that would build upon what exists and make it work better. Such a conservative reform plan would look something like this:
A Medicaid compromise
Democrats want universal coverage, but actually most of the roughly 28 million uninsured Americans are already eligible for public coverage or an employer plan. That’s not true of 2.5 million people who live in states that have not yet expanded Medicaid and have incomes below the federal poverty line. They are ineligible for the ACA’s subsidies and can’t afford to buy coverage on their own. Republicans should embrace a compromise that allows the nonexpansion states to expand Medicaid eligibility to 100 percent of the federal poverty line instead of 138 percent as required by the ACA. The expansion states could stay at 138 percent if they wanted to. States should also be given more flexibility to run the program with less federal interference in return for accepting limits on overall spending.
About 19 million uninsured Americans are already eligible for either Medicaid, subsidized coverage through the ACA or an employer plan. Instead of creating a new insurance program, Congress should make it easier for people to enroll automatically. Employers already use automatic enrollment to expand participation in retirement plans, and a similar process could be used to ensure that workers are signed up for health insurance. In addition, states could use tax data to identify individuals who are eligible for insurance subsidies but may not know it. Eligible individuals could be enrolled in a no-cost plan with the option of paying a premium for more generous coverage.
Insurers in the individual market often have a small pool of customers with higher annual health expenses than typical ones from group plans. That drives up premiums for everyone, including enrollees with modest health care needs. Some states have lowered premiums in the individual insurance market by providing reinsurance to insurers or organizing high-risk pools that protect against losses stemming from the very high-expense cases. By lowering the risk of large losses, insurers are able to reduce premiums for all of their customers. That also lowers the cost of premium subsidies provided by the federal government. To facilitate nationwide adoption of reinsurance or high-risk pools, some of those federal savings could be offered to states that establish such mechanisms.
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The most difficult and pressing issue in health care is high and rising costs. Republicans say the answer is stronger market incentives, but they need to back up the rhetoric with concrete reforms. To begin, Congress needs to place an upper limit on the tax break for employer-provided health care to promote more efficient health insurance. The Federal Trade Commission should more aggressively examine business deals that create de facto monopoly providers in local health care markets. Both parties want Medicare to emphasize value instead of volume in the provision of care. To achieve that goal, beneficiaries need clear information on the cost of their care, and they should share in the savings when they choose high-quality, low-cost providers. More broadly, consumers should be able to see the all-in prices they will pay for high-volume procedures. Finally, Republicans should encourage more competition among drug manufacturers and limit abuses that extend monopolistic pricing for years beyond what patent law is supposed to provide. All of these reforms are controversial but crucial to moving the health care system away from the wasteful approaches that drive up costs for everyone.
Republicans keep searching for a politically safe silver bullet that slays Obamacare and yet leaves everyone happy. That plan doesn’t exist.
But voters aren’t looking for a miracle. They would settle for solid progress. It’s time for Republicans to become the party of responsible health care.