Care costs too much, and many people are simply priced out of the market for health insurance. Many who are not eligible for subsidies say the premiums are unaffordable, especially for exchange policies with their high deductibles and ultra-narrow provider networks.
Millions remain uninsured, and even those with insurance can face thousands of dollars in “surprise billings.” Patients without generous cost-sharing subsidies can face out-of-pocket costs so high they say they might as well be uninsured.
Too Much Government
The high cost of health care in the United States compared to other developed countries and the number of Americans who remain uninsured are real and serious concerns that deserve attention.
The United States does not have a properly functioning market in the health sector. It does not respond to the needs of consumers and their demands for lower costs and more choices which they experience in other sectors of the economy.
But I would argue that the growing presence of government is a significant contributor to these problems. In the health sector, government officials, not consumers, increasingly determine what services can or must be covered, how much will be paid, and who is eligible to deliver and receive these services. Third-party payment systems and the resulting lack of price and benefit transparency lead to significant disruptions in the market. Consumers are at the bottom of the health care totem pole.
Today, people in the individual and small group markets have few choices—they can either buy an expensive ACA-compliant plan or go uninsured. The Affordable Care Act rewrote the rules for health insurance policies, including mandating a rich benefits package. California spent $100 million last fall trying to boost enrollment in its exchange, yet it saw the number of new enrollees shrink by nearly 24 percent.
The problem is cost. The costs of premiums and deductibles can be prohibitive, especially for those who don’t get subsidies. But rather than dramatically expanding the role of government in the health sector, I believe we need to look more carefully at these problems and target appropriate solutions that empower consumers and build on what works.
Medicare Model
Many policymakers see Medicare as a model for reform, at least partly because it allows seniors in traditional fee-for-service Medicare to get care from the doctors of their choice by buying additional coverage in the private market.
Proponents of a single-payer health care system argue if all the money flowing through the health care sector today were put into one program, the United States could more than afford the new program. However, unrestricted access to benefits in these programs is virtually unprecedented, and thus it is difficult to anticipate the cost impact of this new system.
Employer Health Insurance a Pillar
In our multi-payer health sector, employer-sponsored health insurance (ESI) is the single-largest conveyer of health coverage in America. In 2016, an estimated 173 million Americans received health coverage through the workplace, as an employee, retiree, or dependent. The great majority highly value their coverage, which would be eliminated under Medicare for All.
Instead of supplanting ESI with a government-run system, Congress should build on ESI. The Trump administration is offering several options through its regulatory authority to help employers and employees get and keep more affordable coverage.
The administration has created new options for smaller and medium-sized firms through its new Association Health Plans rule. There have been some criticisms that these plans might not be offering the same protections as ACA-compliant plans, but a new study shows that they are offering benefits comparable to most workplace plans and (not discriminating against those with preexisting conditions.)
The administration is also finalizing a rule to enhance employer and employee options in Health Reimbursement Arrangements (HRAs), originally created by the Bush administration to give employers more options in their benefit offerings. The proposed rule would allow workers to use their HRA accounts to fund premiums and out-of-pocket costs associated with individual health insurance coverage.
Contrasting Approaches
A group of policy experts, the Health Policy Consensus Group has developed a plan to help the millions of people who are struggling to afford health insurance, particularly in the small group and individual markets, to have access to more choices of more affordable insurance while protecting the poor and the sick, including those with pre-existing conditions.
Unlike the ACA, (this) Health Care Choices plan would dedicate money for the creation of guaranteed protection programs. Instead of forcing those participating in the ACA insurance pools to pay extra to support people with high medical expenses, we would stipulate dedicated resources be devoted to providing the necessary financial support for their care.
An analysis by the Center for Health and Economy has shown the Health Care Choices Plan would reduce premiums by one third while keeping coverage numbers level.38 By encouraging healthy people to remain covered, insurance pools are healthier, and resources can be directed to help those with greater health needs.
If a Medicare for All program is implemented, government officials will be making even more decisions about what services will be covered, how much providers will be paid, and how much citizens must pay in mandatory federal taxes. Consumers will have even fewer choices and less control than they do today.
Grace-Marie Turner ([email protected]) is president of the Galen Institute.This edited excerpt is from testimony before the House Rules Committee, April 30,2019 and is reprinted with permission.
