Republicans in Congress have worked hard to sabotage the Affordable Care Act. In so doing, they are creating an opening for the kind of health care system they will detest.
The U.S. healthcare market is a mess. Insurance is unaffordable for people who don’t get government help or have employer coverage, thanks in large part to Republican policies that undermine Obamacare.
The tax bill enacted in December eliminated the requirement to buy insurance. As a result, healthy people are less likely to be insured, while those with serious medical bills stay in. This means the average cost per person will be much higher, and rates will rise dramatically.
Last month, the Trump administration proposed the sale of “short-term” insurance that provides little protection for pre-existing conditions and does not cover many expensive healthcare services. These policies appeal to those without health problems because premiums are much lower, but they further damage the market for comprehensive individual coverage.
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In previous years, Republicans stopped funding for risk corridors and cost-sharing subsidies, two features of Obamacare that make coverage more affordable by providing payments to insurers with a greater share of high-cost and low-income patients. Meanwhile, they refuse to let the government bargain with pharmaceutical companies over drug prices, despite President Donald Trump’s avowed support for the concept.
As a result, a recent Urban Institute study projects that premium increases in the individual market will average 18 percent next year and 5-9 million more people will lose their insurance. And thanks to the haphazard manner in which the policies were adopted, the federal government will spend $33 billion more to insure fewer Americans.
For now, the Obamacare’s Medicaid expansion and individual market subsidies are ensuring that most low-income people can still obtain affordable health care. But middle class individuals who earn too much to qualify for government help are being priced out of the market. They must pay the full cost of the rapidly rising premiums, which are now $5,000 per person with a $6,000 deductible, and likely to rise dramatically in the next few years.
This inequity between poor and middle-income Americans is political dynamite that Congress will be forced to address. Momentum for a radical overhaul of the healthcare system already is growing as more middle class people are unable to afford coverage. As it is, many Democrats support a government-run single-payer system, including most of the likely contenders for president in 2020, when health policy could be a defining issue.
The political viability of single payer is questionable in the near future. Here in California, where progressives have pushed hard for universal health care, a legislative report found last week that it would take years to enact such an overhaul, just at the state level.
But a significant majority of Americans will demand radical change if the system continues to deteriorate. Recent polls show health care is the top concern of voters in the 2018 election.
A recent plan from the Center for American Progress could become the health reformers’ best hope for a quick victory. It proposes that Medicaid and the individual market be transitioned into a “Medicare-Extra” system while maintaining employer coverage that many Americans value.
The proposal includes payment incentives to encourage quality and reduce administrative costs. It would authorize the government to negotiate lower prices with drug and medical device companies.
Businesses that purchase coverage would share in the cost-containment benefits of Medicare Extra or could help pay for their employees to enroll in the public program. It allows health plans that offer reduced rates through managed care to participate in Medicare Extra as they do today in the Medicare Advantage program.
But while the plan carefully preserves a role for private insurers, if Medicare Extra is popular, it could ultimately transition into a “Medicare for All” system as envisioned by progressives. Republicans for whom single-payer is the worst possible outcome would have only themselves to blame.
Tom Epstein worked on health policy for The White House, the California Department of Insurance, and Blue Shield of California. Reach him at email@example.com.