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A Health Wonk Divided

“Everyone can agree on the goal of health care reform: ensuring affordable access to high-quality care for all Americans. The question is how.”

Can you guess which Presidential candidate made this statement? You might be surprised to find out that it came from the Republican nominee Mitt Romney.

Despite the fact that health care reform has been one of President Barack Obama’s signature domestic policy achievements, it seems as if the Republican party, or at least Governor Romney himself, has finally latched onto the moral assertion that universal health care should be the goal of health reform. But with all things, the devil is in the details.

Four years ago, we clearly stated that Barack Obama had a better plan for health reform than his opponent John McCain. After the 2008 election, President Obama delivered on many of his promises to reform the health care system.  He has brought encouraging changes to a health insurance system which to this point had been largely a voluntary endeavor. The individual mandate, which passed muster with the Supreme Court this past summer, stands to push America towards universal coverage.

The Obama administration has championed the digital transformation of medicine through the HITECH act. Hospitals and physicians have subsequently increased their uptake of health information technology as a result of the incentives contained within that law.

However, two important campaign promises have not yet been realized. The President did not deliver pharmaceutical price negotiation to Medicare Part D. This could still deliver significant cost savings to taxpayers as well as Medicare beneficiaries. The Veterans Affairs medical centers, on average, save 40 percent off drug prices relative to Medicare Part D precisely because of negotiation and formulary restrictions.

Secondly, the President failed to include a Federal Employees Health Benefits Plan (FEHBP)-like public option in the Affordable Care Act’s health insurance exchanges. Not for lack of effort, Obama’s attempts to include a public option floundered due to many conservative Democrats shunning such plan.

The 2012 presidential election, now just about a week away, offers a stark choice with regards to health policy. Americans can choose a president that will continue to implement intelligent reforms to the health system for which we have previously advocated.

Alternatively, Americans can choose a president that would disrupt policies which would correct current market failures in health insurance. After nearly 20 years of waiting for health reform, we should not dismantle what has been so difficult to achieve.

Thus, President Obama, who will champion the implementation of the Affordable Care Act, deserves re-election.

Although the private private health insurance marketplace has been dramatically reformed due to the Affordable Care Act, Medicare and Medicaid remain in need of urgent changes.

Medicare covers 13 percent of Americans but accounts for 21 percent of health expenditures. As could be expected from a predominantly elderly population, those on Medicare disproportionately affect our nation’s health expenditures. According to the Urban Institute, “single beneficiaries and dual-earner couples who had earned the average wage throughout their working careers can expect to receive about $3 in Medicare benefits for every $1 paid in Medicare payroll taxes.” Looking at these facts, it is clear that the current way of financing and delivering Medicare is unsustainable. In this respect, only Mitt Romney (rather his running mate, Paul Ryan) offers a viable solution out of this problem. While research and theory both suggest that a premium support model for Medicare will cost senior citizens more money out-of-pocket over time, President Obama has not offered an alternative.

It seems reasonable to conclude that premium support for Medicare could become an extension of the Affordable Care Act’s health insurance exchanges. Such a compromise, however, seems unlikely in today’s hyper-partisan political environment.

Lastly, we must account for Medicaid, which covers 16 percent of the population but only accounts for 15 percent of total health expenditures ($389 billion out of $2.6 trillion in 2010). President Obama would utilize the Affordable Care Act’s expansion of Medicaid to promote greater health care coverage. In contrast, Governor Romney would seek to shrink Medicaid by converting it into block grants and removing minimum requirements placed upon the states. Analysis of a similar block grant proposal would have required Medicaid to be defunded by nearly one-third, threatening coverage for millions of Americans.

Governor Romney cannot be serious about a block grant proposal for Medicaid if he truly believes that all Americans should have access to care. It is clear that Medicaid can serve as a cost-efficient model for health coverage expansion.

Optimally, a refundable premium support model for Medicaid would allow families to purchase their own private coverage using the same health insurance exchanges set up by the Affordable Care Act. Such a model would permit low-income Americans to receive mainstream health insurance instead of receiving a separate but unequal “government assistance” health program.

Together, these three moves – implementing the Affordable Care Act for those currently with private coverage, pursuing Medicare premium support for the elderly, and embracing Medicaid premium support for low-income Americans – would fulfill the concept of managed competition conceived by Alain Enthoven over thirty years ago.

by

Cedric Dark, MD, MPH 

About Cedric Dark, MD, MPH

Cedric Dark is Founder and Executive Editor of Policy Prescriptions®. A summa cum laude graduate of Morehouse College, where he received a B.S. in biology, Dr. Dark earned his medical degree from New York University School of Medicine. He holds a master’s degree from the Mailman School of Public Health at Columbia University. He completed his residency training at George Washington University while serving as Chief Resident in the 2009-2010 academic year. Currently, Dr. Dark is Assistant Professor in the Section of Emergency Medicine at the Baylor College of Medicine. He serves as a member of the American College of Emergency Physicians’ State Legislative and Regulatory Committee and the chair of the Texas College of Emergency Physicians' Communications Committee. Contact: Website | Facebook | Twitter | YouTube | More Posts

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