Finally after a six-year gestation period, Paul Ryan and the House Republicans have finally given birth to their answer to the Affordable Care Act (ACA). After going through the Bill we kept hearing Peggy Lee singing “Is that all there is?” The Bill has been derided by the Democrats as “Obama care Lite”, but it’s more Dave’s Plan Lite-very lite. The whole idea of any healthcare plan is to provide decent care at a reasonable price. The ACA’s rapidly increasing premiums and deductibles, disappearance of policy choices in wide swaths of the country and the diminishing number of providers taking Medicaid are well documented. Just how the Republican Bill does much to fix these problems escape us.
The main cost suppressants in the bill are the ability to buy basically catastrophic policies across state lines and expansion of Health Savings Accounts (HSA). Dave’s plan has always had this across state line provision. In fact we feel you should be able to buy coverage from any financially stable provider at home or abroad. Insurance , drugs or surgery, get the best deal you can nationally or internationally.The more competition the better. The problem is it doesn’t fully address the real insurance killers, pre-exiting conditions and failure to maintain coverage. It provides a “Patient and State Stability Fund” to subsidize states dealing with high risk patients but unlike Dave’s Plan, falls far short of covering all pre-existing conditions and ultimately eliminating the problem. For instance, people exceeding Medicaid income limits or have an employment change in the future may have become a high risk making the pools and costs are endless. The Republican Plan maintains the ACA’s prohibition of the pre-existing condition exclusion, but allows for up to a 30% penalty for lapsed coverage. As we have said before, when you force insurers insure sinking ships it just isn’t real insurance. Just a government & crony capitalist hook-up. With no mandate force the purchase of insurance and this as the only deterrent it is unlikely to lower premiums. You can avoid paying for 5 or 10 years and then pay only a 30% penalty for your knee replacement. This gives young and healthy even more incentive to stay out than under the ACA. Under Dave’s plan policies initially cover reasonably healthy people. Those that can been handled within their Personal Benefits Account (PBA). The rest go to subsidized high risk pools. Because the policies are universal, individually owned, no lifetime limits and non-cancelable, the pre-existing condition problem in time will cease to exist as they either go on medicare ore or sadly pass away.. As the PBA pays the premiums, there can be no lapse problem. People just don’t realize how expensive it is to insurers to sell a policy and put it on the books only to have it lapse shortly thereafter. In the insurance business these costs often equal or exceed the first year premium. As policies are purchased annually this loss doesn’t exist under Dave’s plan. Because of these differences, one can readily see policies under Dave’s plan would be much cheaper.
On the surface, the expansion of Health Savings Accounts seems like a good idea. People using their own savings are far more likely to seek lower cost options. Their popularity and growth in the business community has been advancing rapidly in the face of rising healthcare costs. Increasingly businesses would love to get out of providing healthcare but provide it for competitive reasons and/or under provisions of the ACA. Only big well established businesses favor providing it as it gives them a taxpayer subsidized edge over their smaller newer competitors. While HSAs do apply downward market pressure on costs , it will take years if not decades for them to achieve the critical mass to really have a major impact on costs. Further, why do you need another separate savings plan to go with 401ks, IRAs, SEP IRAs, Health Flexible spending accounts, etc. It simply makes more sense, cheaper and more manageable to combine all this menagerie into one plan as we have in the PBA. This achieves immediate critical mass, while it allows for the associated credit card. This would means the vast majority of healthcare transactions to be done on a cash basis. If you don’t think this would save money, ask providers what they charge for a CAT Scan or any other procedure and then ask the price if you pay cash. Does anyone really doubt there would be a significant difference? The Republican Plan takes baby steps towards saving some money whereas Dave’s plan goes full-bore to where the real savings reside. Further, the credit card opens the door to quality Care. No more “sorry we don’t take Medicaid.” You choose which providers gives the best care at the right price. Actual lower costs with greater patient satisfaction.
While the Republican change the subsidies, Medicaid and taxes in the ACA., Dave’s Plan leaves them in place while routing everything through the PBAs. Rather than start over, we use the Data gained under the ACA to arrive at what is credited to the PBAs. This is the age of “Big Data.”and we need to use it. As both parties agree on the principle of subsidy (Republicans call it tax credits), ultimately we can use the data to move to a simpler sliding scale of subsidy based on income and age. In any case, if we don’t actually get control of healthcare costs, whatever we do with taxes and subsidies won’t matter. The system will simply implode. Already entitlements are on a certain path to consume most the budget. How do plan to pay for anything if the price keeps going up. First get control of the costs.
Of course, there s another reason to leave these parts of the ACA in place. The more you retain of the ACA the better the chances of Democratic support. Major legislation works best with a large dose of bi-partisan support. Think of the 1964 Civil Right s Act. The ACA with zero Republican support it has been an orphan to half the country. By keeping the financing, taking care of pre-existing conditions, no lifetime limits and the kids staying on the family policy to 26, we keep the most popular elements of the ACA. Both the ACA and Dave’s Plan have a mandate while the Republican Bill doesn’t. We and the Democrats recognize we’ve had mandatory healthcare ever since it was ruled providers have to give care whether patients can pay or not. Both of us realize someone else no matter how inefficient and costly has to pay. Republicans by dumping the mandate fail to recognize this and thereby endorse high cost “emergency room medicine”. While it appears the Republican Plan narrows the number of people covered (without the CBO scoring yet,we don’t have any real numbers and costs), Dave’s plan is the Democratic dream, universal coverage. Remember the ACA presently still leaves millions uncovered. Under Dave’s Plan everyone is covered. The only way you can possibly have Universal Coverage without price controls and rationing (look at the 70’s to see how that turns out) is by letting the market work its magic. Democrats get Universal coverage on a Republican free market basis. A compromise both should be able to live with. More importantly,the people get healthcare and savings that are theirs that go with them wherever they choose to go. Providers conform to patients needs, not the other way around. Enhancing the prospects of every individual should be the goal of any Representative government.We knew this when we passed the Constitution & the Bill of Rights and made literacy available to all. PBAs enhance every individual and does it much better than the ACA and this new Republican Plan.