Risk Insider: Jason Beans
ACA’s Solution – Treat Health Insurance like Other Insurance
The current administration was elected with the promise it would repeal and replace the Affordable Care Act (ACA). But bipartisan opposition killed the GOP’s proposed replacement, the American Health Care Act (AHCA). There are no plans to draft another alternative; yet, we still need one.
Under the ACA, insurance premiums rose as existing policyholders paid for the very ill and newly insured. Medicaid expansion, which encompassed two-thirds of the newly covered, increased the taxpayer burden to subsidize a program long plagued by excessive wait times and limited coverage. Reimbursement incentives prompted provider consolidation; insurance carriers unable to profit on the exchanges dropped out and many patients couldn’t keep their doctors. For many, the ACA hardly proved affordable or stabilizing.
So what should be done? With the objective of lowering costs, keeping our health care and health insurance markets viable, and reducing harm to people who suffer serious health issues, here’s how I’d restructure the ACA.
Treat Health Insurance like Car & Life Insurance
People often confuse health care with health insurance. Insurance is financial backing to protect us against rare, uncontrollable events. Think of car insurance. Car insurance does not cover oil changes, tire rotations, alignments, etc. Car owners budget for these foreseeable maintenance costs. Likewise, people purchase aspirin and cold medications when they need them. Why day-to-day medications are insured never made sense to me. People can use a Health Savings Account (HSA) to handle these costs.
It is also silly to mandate coverage for unnecessary treatments. I will never need maternity care. My mother will never need prostate cancer treatment. By eliminating unnecessary coverage and using a HSA model to handle day-to-day healthcare expenses, we’d cut costs.
It is silly to mandate coverage for unnecessary treatments. I will never need maternity care. My mother will never need prostate cancer treatment.
Health insurance should be bought like life insurance. Enrollees choose whole life or a 10-year-plan. The younger and healthier a person is when they enroll, the less expensive their rate will be.
Carriers would see years of high profitability during a policy’s infancy, and invest those profits to cover costlier times later on. This arrangement incentivizes people to buy insurance early; securing lower rates and eliminating policy cancellations when they become ill.
In many states, large health plans are a virtual monopoly. National licensing for health insurance would create better penetration and more competition. Competition always reduces cost and increases service.
Reduce Treatment Regulations
Providers face copious regulations, often driven by special interest lobbying. When I visit other countries, I speak directly with a pharmacist to get prescriptions. Pharmacists know more about drugs and drug interactions than medical doctors. Yet here we waste time and money on office visits in order for physicians to write prescriptions. This adds unnecessary cost to the system, wastes our doctors’ time, and turns our highly trained pharmacists into pill counters.
We cannot look at prescription data and think this required process is adding value (e.g. the US has the highest rate of physician-prescribed opioids in the world). Common sense deregulation would cut costs and improve user experience.
By lowering the costs of health care, all citizens will have the opportunity to improve their health care and health insurance situations. Medicaid and Medicare will still be available to provide for the elderly and those in the worst financial situations. High risk pools can also be established to cover the few people who fall outside any of these solutions.
While the Republican plan lacked support as a viable solution, the ACA’s deficiencies will continue. I do not expect Congress to address this topic again in the next two years, but it will have to be addressed. Hopefully, next time, legislators will study what works and create a sustainable solution.