In the past year, liberal health reformers have seen a backlash against their health reform policies. Single payer reforms failed in Vermont and Colorado. And tales of proposed 25% rate increases in the Affordable Care Act (AMA) Marketplaces may have helped usher in a new president and a Congress determined to repeal President Obama’s signature health law.
The landscape for health policy has certainly shifted in the past year. We offer a path forward that will offer improved coverage, better care, and financial protections to more Americans. The principles upon which our organization was founded, that our health care system should focus on continuity, affordability, and access to quality care for all Americans, begins with universal access to care.
Thus, as a matter of principle, any reforms the next president and Congress undertake must not increase the number of people uninsured.
There are, however, some tweaks which can improve our current healthcare system.
- Reform Employer Sponsored Insurance (ESI)
We continue to argue that changing the tax treatment of ESI would make it more progressive, reduce the economic distortions promoting over-utilization of health care, and bring significant revenue to the federal treasury. The Cadillac tax – an unpopular part of the ACA – attempted to do this, although imprecisely. Presuming future reformers wish to repeal the Cadillac tax, we would prefer to see it replaced with a tax on the value of ESI above a particular threshold (e.g. $6,435 for individuals and $18,184 for families) at the tax filers’ marginal tax rate. This change would increase federal revenues thereby providing funding to cover more people.
- Expand the Private Option for Medicaid
The ACA’s Medicaid expansion has demonstrated that care can be delivered equally well when part of the traditional program or when delivered as part of a private option. Yet, because of recalcitrant state participation 2.8 million people remain locked out of expansion. We propose letting the federal government provide subsidies for all Americans eligible for Medicaid to enroll directly in private plans in the ACA Marketplaces instead. Other federal health programs – Indian Health Service, TriCare, etc. – should have the option to follow suit.
- Allow Medicare Opt-Ins and Opt-Outs
Medicare beneficiaries currently have the option of either traditional Medicare or Medicare Advantage. We propose that insurers should put Medicare Advantage plans on the ACA Marketplaces allowing non-seniors to opt-in and thereby expanding coverage options for the ACA. Also, by allowing non-elderly Americans to opt into traditional Medicare (and the national provider network it offers) solutions to the ACA’s narrow network problem would be available – even if they prove more expensive for consumers. Seniors should also be able to opt-out of Medicare and purchase other ACA Marketplace plans.
- Automatically Enroll the Uninsured
Our plan will not insure everyone, but by requiring that anyone presenting for healthcare be automatically signed up in a default plan (e.g. traditional Medicare) we anticipate that over 7 million people already eligible for coverage will gain it and a proportion of higher income (i.e. subsidy ineligible) Americans will also get covered. People who attempted to free-ride on the system, but required health care and were above the subsidy threshold will be on the hook for the full actuarial price of traditional Medicare. Since that price is substantially higher than current ACA penalties – and reimbursements lower than private plans – it should offer incentive for both patients and providers to encourage adoption of private insurance.
Ultimately, our plan would provide at least 10 million more Americans with coverage and offer an average subsidy of $1,600 per person to go toward purchasing private insurance.