The Great Recession Enabled ObamaCare. Now the Law’s Failure Makes Reform PossiblePosted: November 30, 2016 | |
The Four Legs of a New Health-Care System
The new system should be fully consumer driven, empowering individuals to be the surveyors and purchasers of their care. Past reforms in this direction became stilted and ultimately incomplete, but the current moment offers a chance to truly rebuild from the ground up. If Messrs. Trump and Price want to make the most of this short window, they should keep four central reforms in mind.
1. Provide a path to catastrophic health insurance for all Americans. There’s ample evidence that enrollment in insurance doesn’t always lead to improvements in health—but access to health insurance is important nonetheless. A 2012 study from the National Bureau of Economic Research found higher insurance enrollment from reforms in Massachusetts led to better results in several measures of physical and mental health.
Health insurance is also important for financial security. The ObamaCare replacement should make it possible for all people to get health insurance that provides coverage for basic prevention, like vaccines, and expensive medical care that exceeds, perhaps, $5,000 for individuals.
Those Americans who don’t get health insurance through employers, or Medicare and Medicaid, should be eligible for a refundable tax credit that can be used to enroll in a health-insurance plan. The credit would be set at a level comparable to the tax benefits available to individuals with employer-sponsored insurance plans. The subsidy would be enough to make a basic level of catastrophic coverage easily affordable for all Americans.
2. Accommodate people with pre-existing health conditions. The price of insurance naturally reflects added risk. That’s why beach houses cost more to insure than a typical suburban home. Yet there is a reasonable social consensus that people should not be penalized financially for health problems that are largely outside of their control.
So as long as someone remains insured, he should be allowed to move from employer coverage to the individual market without facing exclusions or higher premiums based on his health status. If someone chooses voluntarily not to get coverage, state regulation could allow for an assessment of the risk when the person returns to the market.
This would prevent healthy people from waiting until they get sick to buy insurance, which is one reason ObamaCare’s insurance markets are unstable. The refundable tax credit ensures that everyone, including the unemployed, can get access to at least catastrophic insurance and maintain continuous coverage. Well-run and properly funded high-risk pools can help address the inevitable cases of expensive claims for the remaining uninsured.
3. Allow broad access to health-savings accounts. ObamaCare pushed millions of Americans into high-deductible insurance without giving them the opportunity to save and pay for care before insurance kicks in. There should be a one-time federal tax credit to encourage all Americans to open an HSA and begin using it to pay for routine medical bills. And HSAs combined with high-deductible insurance should be incorporated directly into the Medicare and Medicaid programs….(read more)
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