How to build on the ACA success story
This Appendix, originally posted February 27, 2017, contains additional information on constructive proposals that build on the success of the ACA.
The national public option
“[The public option would make] a government-operated health-care plan available on public markets. Allowing good public insurance to compete would both ensure that decent, affordable insurance is available in all 50 states, and prevent power plays like Aetna’s by making public insurance available as a backstop. If private companies can provide insurance that people want to buy at rates competitive with the public option, good. If they can’t, this would also be fine, because the public sector would absorb a bigger share of the health insurance market, a positive development in itself.
“What makes the public option desirable will also make it very hard to pass. . . . Insurance companies know full well how a robust public option would eat into their customer bases and profits, and will fight it with everything they’ve got.”
“One [option that has been proposed would] be to lower the eligibility age for Medicare to 55, down from 65. . . . Expanding Medicare makes sense regardless, because it would make good public insurance available to more people. Importantly, it would also indirectly strengthen the exchanges by creating insurance pools that, on average, are younger and healthier.”
And Paul Starr, in The Next Progressive Health Agenda, proposes, with thoughtful analysis, a “Midlife Medicare” proposal:
. . . create a new part of Medicare for the older population below age 65—the older population who have also earned Medicare coverage by paying taxes and who are directly threatened by current Republican legislation. My name for this new program is “Midlife Medicare,” which would be open to people age 50 to 64 not otherwise insured (for example, by an employer). . . .
Midlife Medicare would have advantages for both its beneficiaries and those age 49 and below remaining in the individual insurance market. The enrollees in Midlife Medicare would benefit from the countervailing power that Medicare exercises. Medicare pays provider rates that are substantially below those paid by private insurers in the non-Medicare market, yet providers accept Medicare patients, who consequently do not face the “narrow networks” in most plans in the individual and small-group markets. Americans who continue to have employer coverage will have the assurance that if they need to retire early, they will have health insurance as good as they would now get at age 65. Midlife Medicare is also a response to the rising death rates and declining health that economists Anne Case and Angus Deaton have demonstrated among non-Hispanic whites in midlife.
Moreover, by pulling the 50- to 64-year-olds out of the individual insurance pool covering people 49 years of age and under, Midlife Medicare would make coverage for the younger population substantially cheaper. The younger enrollees in the individual market would, in effect, no longer be shouldering part of the cost of the more expensive 50- and 60-year-olds. This is a much better way to reduce rates for 20-year-olds than the Republicans’ proposal to let insurers charge 60-year-olds five times as much as young adults.
Proposals from Paul Krugman
Paul Krugman, in How to Build on Obamacare, has weighed in with a variety of proposals to build on the ACA’s success.
On the issue of too-high deductibles:
One important answer would be to spend a bit more money. Obamacare has turned out to be remarkably cheap; the Congressional Budget Office now projects its cost to be about a third lower than it originally expected, around 0.7 percent of G.D.P. In fact, it’s probably too cheap. A report from the nonpartisan Urban Institute argues that the A.C.A. is “essentially underfunded,” and would work much better — in particular, it could offer policies with much lower deductibles — if it provided somewhat more generous subsidies. The report’s recommendations would cost around 0.2 percent of G.D.P.; or to put it another way, would be around half as expensive as the tax cuts for the wealthy Republicans just tried and failed to ram through as part of Trumpcare.
On the issue of inadequate insurance company participation:
Better subsidies would help enrollments, which in turn would probably bring in more insurers. But just in case, why not revive the idea of a public option — insurance sold directly by the government, for those who choose it? At the very least, there ought to be public plans available in areas no private insurer wants to serve.
On other technical issues:
There are other more technical things we should do too, like extending reinsurance: compensation for insurers whose risk pool turned out worse than expected. Some analysts also argue that there would be big gains from moving “off-exchange” plans onto the government-administered marketplaces.
Proposals from David Leonhardt
In his opinion piece, Republicans for Single-Payer Health Care (the title of which is tongue in cheek), Leonhardt writes:
So if voters like government-provided health care and Republicans are going to undermine private markets, what should Democrats do? When they are next in charge, they should expand government health care.
They should expand Medicaid further into the working class. They should open Medicare to people in their early 60s. They should add a so-called public option to the private markets. They should push the United States closer to single-payer health insurance. It will take time and involve setbacks, but they are likely to succeed in the long run.
Proposals from Harold Pollack and Timothy Jost, at the Century Foundation
Pollack and Timothy Jost, in Key Proposals to Strengthen the Affordable Care Act, offer 42 pages of proposals, and conclude:
Even as the successes of the ACA become increasingly apparent and it becomes more deeply embedded in our health care system, political calls to repeal it continue. The House of Representatives has voted nearly sixty times to repeal the ACA. Yet a majority of Americans would rather keep or expand the law than repeal it. Millions of Americans are now insured through ACA. Millions more benefit from its regulatory protections, such as bans on insurer discrimination against the sick and injured. Billions of dollars are now flowing to state governments, insurers, and medical providers. In short, ACA is now embedded in the fabric of American life.
This report offers a number of proposals for building on the ACA, to make health coverage and health care even more affordable, accessible, and understandable for Americans. We understand that in the current political climate, improvements to the ACA that require
congressional action are unlikely. Yet an administration committed to improving access could take some of the actions we recommend without new legislation, while other proposals could be implemented by the states, marketplace, or simply by insurers.
The ACA was the beginning, not the end, of a process that holds out the promise of transforming health insurance and health care for the better. It has covered millions of people who otherwise would be uninsured. It has set in place mechanisms to help control the growth of spending. It will enhance the quality of health care by improving information and promoting competition. But, like most major laws, it contains flaws and left many problems unaddressed. It was the first, not the last, word in health reform. “Repair and improve,” not “repeal and replace,” is the current political and policy challenge. We hope our report advances this goal.
Carol Peckham’s excellent blog, “Keeping An Eye on Affordable Care,” contains numerous posts that discuss models of coverage for consideration.
To read more about some of the Democratic proposals that build on the successes of the ACA, a nice starting point is the book we used to identify those listed in the text: Stronger Together: A Blueprint for America’s Future, pp. 89-107.
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