Seven years ago, Obamacare became the law of the land. Later today, the US House is scheduled to vote on a controversial repeal and replace bill. While the outcome in Washington is unclear, anyone can see the status quo isn't working for patients, taxpayers or health care providers.
The real problem is that health care is too expensive. Unfortunately, Governor Wolf continues to advocate for Obamacare's solution of handing out more insurance cards through Medicaid expansion or piling on premium subsidies, which only increases costs. Here are seven ways to put patients, not bureaucrats, in charge.
1. Eliminate Harmful Insurance Regulations: From the guaranteed issue mandate, which allows patients to seek insurance after they are sick, to the community rating mandate that imposes price controls, to restrictions on what benefits a plan must include, many regulations limit consumer choice and control. The result is skyrocketing premiums and out-of-pocket costs for all. Federal officials should eliminate these regulations and Pennsylvania should roll back its 50-some benefit mandates.
2. Enhance HSAs: Third-party insurance is a major cause of rising costs. This form of insurance shields consumers from the true cost of care and encourages over-utilization. A better solution is to encourage out-of-pocket spending on routine medical care by expanding the flexibility of Health Savings Accounts, while preserving insurance for catastrophic events.
3. Separate Insurance from Employment: Federal officials should equalize the tax treatment of health insurance received through employers and the individual market. Currently, only employer-paid premiums and most employee-paid premiums are exempt from federal income and payroll taxes. Tax deductions, credits, or list billing would promote fairness for those who don’t receive employer-provided health insurance, and end the danger of losing your coverage when you change jobs.
4. Embrace Innovation: Alternatives to insurance reduce the cost of care. Direct primary care and cost-sharing ministries provide affordable health care services outside of the traditional insurance model. Insurance regulations should not apply to these and future innovations. Likewise, legislation to give terminal patients the ability to try experimental drugs or giving pharmacists the freedom to discuss off-label uses of prescriptions prioritizes patients' needs over bureaucrats' roles.
5. Expand the Supply of Care: Mid-level providers, such as nurse practitioners and dental therapists, are prevented from practicing in underserved rural areas because of stringent state licensing regulations. There is no evidence these regulations produce better health outcomes. Similarly, permitting shopping in neighboring states with nearby networks could expand consumer choices and drive down costs.
6. Refocus Medicaid on the Neediest: Obamacare expanded Medicaid—taxpayer funded insurance for low-income families and the disabled—to cover able-bodied adults. Nationwide, government spending on Medicaid expansion enrollees is nearly 50% higher than originally projected. In other words, it took resources away from the neediest and there is no evidence it helped adults become healthier. Federal officials should freeze enrollment—a reform with broad public support.
7. Improve the Quality of Medicaid Coverage: Providing quality care to the most vulnerable requires Medicaid to be sustainable and responsive to patients. Currently, Medicaid enrollees obtain only 20 to 40 cents of value for each dollar the government spends on their behalf. Accepting a federal per-capita block grant would cap Medicaid spending in exchange for the flexibility to give patients a larger role in their own care. There are many reforms Pennsylvania can pursue to improve the quality of care and help the able-bodied transition to affordable private insurance. These reforms include choice counseling, work requirements, and health care savings accounts.
Affordability will come when federal and state leaders put patients first.
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