A day after House Republicans voted to pass legislation that repeals and replaces large parts of the Affordable Care Act (ACA), Avik Roy, Forbes
opinion editor and president of the Foundation for Research on Equal Opportunity, outlined what Republicans are trying to fix. After his presentation, he joined a panel discussion on what impact the American Health Care Act (AHCA) will have.
During his presentation, Roy made the argument that healthcare is actually simple, but over the last 50 years the United States has managed to “mess it up.”
The current “behemoth” grew out of changes that began in 1965 when the country decided it was “intolerable” that the elderly, poor, and disabled couldn’t afford health insurance and created Medicaid and Medicare. There was a system where the consumer was far removed from the actual purchase of healthcare. As a result, they became insensitive to costs. Meanwhile, the advent of Medicare meant doctors and hospitals could charge higher prices and Medicare had to pay the claims.
Roy does believe that the country should strive to provide everyone with affordable health insurance, but the way the United States has gone about doing it was “incoherent” and expensive. There are 2 ways that other countries have done it effectively: a single-payer system or a market-based approach.
“Our approach, uniquely, takes the worst of both,” Roy said. “We have all the cost inefficiencies of a highly public system without any of the actual coverage gains that you would expect from a truly government system.”
One main thing Republicans don’t like about the ACA is that they think the government should be smaller. Republicans like to call the ACA a “government takeover of the healthcare system,” but they’re missing something when they say that, according to Roy. Even before the ACA was enacted, the government was spending far more on healthcare through Medicare and Medicaid than it will pay on the ACA.
“If the goal of conservative health reform is to really make the healthcare system in America fiscally sustainable, it can’t be just about Obamacare,” Roy said. “It has to be about reforming Medicare and Medicaid, as well.”
He outlined 4 steps to address the issue:
- Reform the regulatory framework of the exchanges so there are no big spikes in premiums while keeping basic protections like guaranteed issue. Subsidize coverage in a means-tested way.
- Raise the eligibility age of Medicare once the markets stabilize.
- Privatize and restructure Medicaid. Take the able-bodied, acute care population in Medicaid and migrate them into the market. Give states more responsibility for the long-term care population.
- Finally address other necessary reforms, including addressing rising drug prices and hospital consolidation.
“This could be an approach where progressives and conservatives could both win,” Roy said. “We could have more people covered than in the ACA, but also have significant fiscal savings.”
Roy was then joined on stage by Cheryl Gardner, CEO of beWellnm, the health insurance exchange for New Mexico; Sally Pipes, president and CEO of the Pacific Research Institute; and Ninez Ponce, MPP, PhD, a professor at the University of California, Los Angeles.
Pipes had a unique viewpoint as someone who was born and raised in Canada and has experienced the rationing of care there that has resulted from a single-payer system. Something similar has been happening in the United States since the ACA was passed.
“What good is [exchange insurance or Medicaid coverage] if you can’t find a doctor or if the wait to see a doctor is so much longer than people with private insurance?” Pipes asked.
Gardner expressed a similar sentiment. There are 880,000 people enrolled in Medicaid in New Mexico—approximately 44% of the population—but they don’t have access to doctors. “We reduced uninsurance, but they can’t get care,” she said.
The situation was slightly different in California, where there have been modest improvements in coverage, affordability, and access, according to Ponce. The state has hit an all-time low of people who don’t have insurance, and most of that has been driven by Medicaid expansion, she said. The California Health Interview Survey has found that more people are seeing doctors for routine check ups (70% of the population in 2015 up from 65% in 2013) and fewer people were delaying care due to cost.
One way the ACA was “monumentally successful” is that it made healthcare and healthcare reform a “front burner issue,” Gardner said. “People are starting to think more critically about insurance.”
Roy is convinced that we can get to universal coverage in the United States so every American has the basic financial security that comes from having health insurance. He envisions a system similar to Switzerland, which has privately run health insurance and lower-income individuals can receive taxpayer subsidies to help pay for the cost.
“The government provides financial assistance—its role would be to provide financial assistance solely, everything else is provided by the private sector,” Roy said.
Ponce pointed out that such a free-market approach could work assuming there was symmetrical information provided to all consumers and that there were no barriers to entry for providers. While Roy is a big proponent of the free-market systems in Switzerland and Singapore, Ponce wondered if those systems would work in the United States and how many low-income people who need assistance are in those 2 countries.
“Will the Switzerland and Singapore context work here?” she asked. “I think that depends on the level of need in the population.”
The conversation also turned to the AHCA and what impact it might have if implemented as law. Coverage in California will likely be reduced in AHCA, particularly if there is no more funding for the Medicaid expansion population, Ponce said. She wasn’t able to speculate on what the AHCA would do for affordability, but she suspects the portion of the population going for routine would likely go down.
Gardner has concerns about the legislation, but there is a crisis going on in some states where people could face a situation where they have zero coverage options.
“I have some concerns about the measure, but I don’t frankly have a better answer for what we do in the short term to address the millions and millions who are facing the issues they are now,” she said.