For millions of Americans, health insurance has become increasingly unaffordable and useless in meeting real health care needs:
- If you combine the average premium with the average deductible faced in 2019 by people in the Obamacare exchanges, a family of four (not getting a subsidy) had to pay $25,000 before getting any benefit at all from their health plan.
- All across the country, people with insurance purchased in the exchanges are denied access to the best doctors and the best hospitals, even though these providers accept private insurance and Medicare.
- Parents of a child with special needs may comb through the published information to find a plan with the right doctors, only to discover that while they are locked into their choice for the next 12 months, while the health plan can change the doctors in its network.
Some employer plans — especially in low-wage industries — are almost as bad, which explains why millions of employees turn down their employer ’s offer of health insurance. Employees who do sign up often cannot afford to enroll their families.
More than 80 research organizations have studied these problems and produced detailed recommendations in Health Care Choices, a project initiated by the Galen Institute with input from the Goodman Institute and the Heritage Foundation.
End Obamacare’s narrow networks, which deny patients access to the best doctors and the best care.
According to its supporters, a primary benefit of Obamacare is protecting people who enter the individual market with a pre-existing condition. Yet the Affordable Care Act triggered a race to the bottom by giving health plans perverse incentives to attract the healthy and avoid the sick. The most successful Obamacare insurers are Medicaid contractors. The plans that have survived in the exchanges look like Medicaid managed care with a high deductible.
As a result, in Dallas, Texas, no individual insurance plan includes UT Southwestern Medical Center and cancer patients don’t have access to MD Anderson Cancer Center in Houston. This pattern is repeated all over the country.
How could the individual market be different? In an ideal health care system, health plans would compete to attract patients with medical problems, because risk-adjusted premium subsidies would make it profitable to compete to enroll the chronically ill, which is already being successfully done in the Medicare Advantage program.
Let families have access to insurance that meets their medical and financial needs without Obamacare high deductibles and premiums.
The most important reform is reinsurance — setting aside funds for the care of the sickest, most costly enrollees. Absent these catastrophic risks, insurers can afford to charge lower premiums.
This reform has already led to lower costs in seven states that got a waiver to try it. The Center for Health and Economy estimates that a more liberal version of the concept would lower health-care premiums by as much as a third, and would insure about the same number of people as Obamacare.
A second reform is “limited benefit insurance.” Young families, with moderate incomes and routine health needs, will almost never willingly choose a plan with very high deductibles. They want to know that they can take a sick child to the doctor’s office or to the emergency room without having to worry about whether they can afford it. That’s why they will almost always choose first-dollar coverage over last-dollar coverage.
So why not allow people to have the kind of insurance that meets their needs? Let families have a partial tax credit for the kind of insurance they want and send the remainder of the credit to a safety net fund that will cover those rare and unusual circumstances of high medical bills.
Workers need portable health insurance.
People should own their own health insurance and take it with them as they travel from job to job and in and out of the labor market. Because of a Trump administration executive order, employers can now give tax-free funds to employees to buy health insurance that they will own. This is a major change from the Obama regulations, which threatened to fine employers $100 per employee per day for giving their employees the opportunity to own their own insurance. Congress needs to codify this change.
Give families access to 24/7 care.
Atlas MD in Wichita offers round-the-clock care by means of phone, email, Skype, Zoom and Facebook if needed. The cost: $50 a month for mother and $10 for a child. This model, called “direct primary care,” not only offers patients the entire range of primary care services, it helps patients make appointments with specialists and helps them get discount prices on MRI scans and other medical tests.
This type of care needs to be an option throughout the health care system — in individual plans, in the Obamacare exchanges, in employer plans, and in Medicare.
Let patients manage their health care dollars.
There is mounting evidence that patients suffering from diabetes, heart disease and other chronic illnesses can (with training) manage a lot of their own care as well as — or better than — traditional doctor therapy. If they are going to manage their own care, they should also have the opportunity to manage the money that pays for that care.
Unfortunately, the Health Savings Account law does not allow employers and insurers to pay for drugs and other services that should be made available to chronic patients or allow patients to put additional funds into their HSA account.
Guidance issued by the Trump administration was a major step in the right direction. People who use HSAs are now exempt from the high-deductible requirement for the purchase of drugs for 13 chronic conditions. This means that the employer or insurer can now provide first-dollar coverage for drug therapy without running afoul of HSA regulations. These changes need to be codified and expanded.
Let seniors use HSAs.
Once seniors become eligible for Medicare, they are no longer able to make deposits to HSAs. This restriction should be replaced with the opportunity to have a Roth-style savings account, with after-tax deposits and tax-free withdrawals.
Price of care should be transparent.
In medical markets where patients pay out of pocket, buyers always know the price in advance of purchase, and competition based on price and quality. Cosmetic surgery and LASIK surgery are examples. In addition, when Canadians come to the United States for knee and hip replacements (to avoid long waits in their own country) they are almost always given package prices, covering all elements of their procedure — by American hospitals! In the third-party payer sphere, by contrast, providers rarely compete for patients based on price. When they don’t compete on price, they don’t compete on quality either.
Pursuant to Trump’s executive order, hospitals are now required to post their prices for common procedures in a consumer-friendly manner. Congress should codify this rule.
Give patients with chronic diseases access to specialized health plans.
Outside of Medicare, insurance plans are not allowed to specialize but required to offer a full range of services to all enrollees. Yet if health plans are not allowed to focus and get good at meeting some patient needs, they are likely to be mediocre when they try to meet all patient needs.
Medicare Advantage Chronic Condition Special Needs Plans can specialize in 15 chronic conditions. These plans can exclude applicants who don’t have the condition. Congress needs to apply the same concepts to reforming the Obamacare exchanges.
Empower patients — not special interests and bureaucrats.
Obamacare was created through secret meetings, cynical emails, and hidden contributions to political action funds. Industry was too willing to accept additional regulations in exchange for bigger government subsidies. Real reform starts by setting aside the special interests and transforming our health care system to meet the needs of patients and their doctors.