There's a simple reason why (after more than a decade) Donald Trump and the Republicans have no plan to replace Obamacare. I'll explain in a few minutes.
But first, some background. When the Affordable Care Act (or Obamacare) was passed in 2010, it was an effort to expand health care coverage to a lot of people who needed it, while controlling their costs. It had certain key provisions, not the least of which were that people couldn't be denied coverage for pre-existing conditions, that all chronic diseases needed to be covered fairly, and lifetime coverage caps had to be lifted.
The problem was that if you left matters to insurers to set insurance premiums based on what this would cost, the price of insurance would rise dramatically.
So the government took a look at three different programs and ultimately put them together into one system. For people whose income was so low that they couldn't afford any real cost-sharing, the government expanded Medicaid. For elders and people with disabilities, the government added new Medicare benefits, including improved prescription drug prices, while keeping a lid on other costs. And for everyone else - who would get private insurance - the government either let them stay on employer-based group plans that already offered significant coverage or purchase small-business or individual plans for which the government provided huge tax credits, saving them thousands of dollars a year in premium costs.
Some states balked at the Medicaid expansion. Even though the federal government agreed to pay nearly 100 percent of the expansion cost, each state by law controls its own Medicaid program and could refuse the expansion. Florida, for example, refused it, leaving $51 billion on the table that could have been used for state tax relief. Their stated reasons generally centered around the role government should play in financing a low-income individual's health care needs. Shouldn't individuals be responsible for themselves? But they missed a bigger picture. Rural hospitals and health care providers often relied on Medicaid to keep their doors open. And when Medicaid didn't expand, some of these safety net providers closed their doors.
Meanwhile, health care costs continued to rise over the last fifteen years. That's no surprise - prices always go up over time, just like wages, the stock market, and everything else.
So the question became - how can you reduce the price of health care without taking away the health care services people need?
There are three answers. The first is that you can invest in prevention and early identification of disease. No matter who is paying, it is cheaper to prevent than to treat. And it's cheaper to treat early (at Stage 1) than it is to treat later (at Stage 4). The second is that you can invest more heavily in social services. Other developed nations have lower health care costs because they provide more housing, food, and other social services. The third is that you create a big enough insured group that it can negotiate directly with providers (of drugs and health care) to keep costs down.
The problem is that the Trump Administration doesn't really want to do any of these things right now. RFK, Jr., is gutting prevention programs. Expanding social services is anathema to many small government advocates. And creating bigger insured groups - like expanding Medicare - is considered Bernie Sanders socialism.
That gets us to the real answer as to why the Republicans have no plan. It's that the current system is the Republican plan. As policy, this hybrid model was first hatched by Mitt Romney, with roots in 1990s conservative think tanks. Preservation of the private insurance market was always aimed at avoiding a single-payer, Medicare-for-all, system - even though the government today, when you add up all the market subsidies, probably directly or indirectly funds more than three-fourths of our health care costs.
It's also why today, the best the Republicans can do is come up with admittedly lame ideas like more "bronze" plans (ACA bronze plans - the cheapest plans - barely cover 60 percent of the costs of an individual's annual health care costs), plans that don't cover pre-existing conditions, and expanded "health care savings accounts" which would require individuals to set aside thousands of dollars each year to cover their own health care costs.
Wouldn't the creation of one large group, with no profit motive and the power to negotiate prices directly with providers, solve the problem?
Comments
Post a Comment