| Today's Managing Health Care Costs Number is 4 |
The new revised Republican Senate health care bill is worse than the last iteration of the Better Care Reconciliation Act.
- It will still cause devastating cuts in Medicaid - an incredibly valuable program that finances delivery for 45% of deliveries, 60% of nursing home stays and a substantial portion of the costs of substance abuse treatment.
- It is worse in that it allows insurance plans to sell non-compliant health plans - and allows the healthy to use health savings accounts or federal subsidies to purchase these skimpy plans. That will lead to even more of the young and healthy skipping out of comprehensive health plans -and price more of the old and sick out of the market
- It adds a little to subsidies for the near-poor - but not enough for most of them to be able to purchase health insurance that has affordable premiums and out of pocket costs that are income-appropriate
- It puts an inadequate amount into high risk pool funding - and distributes this to the states, which historically have failed at setting up effective high cost pools
- It puts some dollars into opioid programs, but decimating the Medicaid program will offset the good that comes from this.
- It would allow many Americans to be in health plans that would not cover essential benefits - so that the funding for those benefits would be threatened for those who need them.
- Separate Republican bills would prohibit the IRS from enforcing the individual mandate, which would further erode the health of those in the exchange and lead to higher prices and potential "death spiral."
A group of Democratic House members have put forward their plan to "fix" Obamacare. This bill is thoughtful and would represent a real step forward. It includes
- Commitment to paying the cost sharing reductions going forward
- Higher amount of subsidies to attract the healthy to the exchange markets, with aggressive marketing and potentially changing the open enrollment cycle to tax refund season
- Enforcement and potential increase in the individual mandate penalties
- Permanent reinsurance fund to protect health plans from the costs of enrolling the highest risk members
- An ill-defined mechanism to allow older pre-65 Americans to "buy into" Medicare, which would also help take some of the most expensive patients off the individual exchange markets.
What's striking about these two efforts is that there is essentially no overlap. The Republicans seek to decrease taxes (on the rich) and decrease the role of the government in both financing and regulating health care, even though the US health care system is a failed experiment in leaving the system to only a very lightly regulated market in the eyes of many economists. The Democrats want to insure affordable access to health care for all - and are willing to do this by increasing the role of government - even though all those with current levers of power adamantly oppose this and are ideologically and politically committed to moving in the opposite direction.
It's really hard to compromise when there is no overlap in what each party is looking for!
I've been thinking hard about where there could be room for compromise, and frankly, I don't see much. A few preliminary thoughts:
| Concept | Party Positions | Challenge |
| Decrease regulations that prevent less expensive practitioners from providing services | Republicans are often against regulations - and these are regulations that genuinely could increase market effectiveness | The doctor, dentist, and even nurse lobbies are adamantly opposed and claim that these regulations protect consumers. Further, these are largely state regulations, and federal preemption of state regulation is fraught with problems |
| Increase enforcement of antitrust laws, as provider consolidation is a major reason for unit cost increases | Democrats in general are more supportive of antitrust enforcement; Republicans are more likely to worry about government interference | Providers have a huge amount of political influence, and oppose such enforcement |
| Offer national reinsurance at a low attachment point, so that the care beyond $50 or $75,000 annually would be the responsibility of the federal government | Republicans are putting tens of billions into high risk pools -although they would likely be loathe to use these funds for a federal program. Democrats have proposed this before (Kerry 2004 health care plan). This could also help decrease risk selection in health plans, and would be a relief to employers who struggle with high cost cases. | Insurance companies (and reinsurers) would not necessarily like losing this portion of their current business. Ideally the federal government would have the states administer this through their existing Medicaid non-managed care contracts, and could fund this 100% to avoid state rejection |
| Increase funding for anti-fraud efforts | These pay for themselves, and no one is in favor of fraud and abuse! | Some will again worry of government overreach, and the Trump Administration is in the process of disassembling regulatory apparatus. Some of the more extravagant claims of fraud include simple coding errors (like a woman being miscoded as a male and then a delivery being considered "fraud"). There is a ceiling of potential savings - though we are nowhere close to that yet. |
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That's all I've got. Just four rows. It's not much to work off of - and none of these are slam-dunks. This highlights just how hard it will be to develop a compromise in these polarized times.
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