Affordable Health Insurance Shouldn’t be an Oxymoron
When it comes to health care there are many challenges and chief among them is cost. In 2009, Congress and the nation engaged in a broad debate about the direction of federal health care reform. On our side of the aisle, we warned that not enough attention was being paid to affordability and too much focus went into expanding federal control. We all know how the story unfolded from there. Those warnings fell on deaf ears, and the president followed the partisan path to health reform.
Three years later, the president’s health care law is making life more expensive. Despite President Obama’s promise that premiums would decrease by $2,500, the average family premium has grown by over $3,000 since 2008. These increases have occurred before the law’s most costly requirements go into effect in 2014. To date, over 30 studies and analysis from the Congressional Budget Office, independent actuaries, health plans, benefit consultants, and others show the cost of health care premiums will rise even more once the law is fully implemented next year.
These premium increases, combined with three decades where health care costs have doubled as a percentage of income, mean less money for groceries, child care, gasoline, college tuition, and summer vacations in the family budget. At a time of weak economic growth and slow job creation, it is unfair for Washington to make coverage less affordable for American families.
To build a health care system that is truly affordable, the Affordable Care Act must go. We can do better. Americans should be given choice in health care, not dictates from politicians and Washington agencies. Real reform means encouraging more individual choices when it comes to health coverage.
Reform is necessary to reverse the damage of the President’s health care law and provide affordable coverage options to all Americans, including those with pre-existing conditions. Instead of an individual mandate that forces people to buy insurance they can’t afford, low-cost coverage options should be made available to save Americans from the inevitable premium increases coming as a result of the President’s health care law. These steps will also help build toward long term health insurance solutions, such as allowing Americans to purchase coverage across states lines and providing new pooling options for small businesses and individuals so they can negotiate better rates from insurance companies. Taken together these reforms will mean Americans would finally have more affordable, portable and customized health care options. This paper examines initial steps for health insurance reform that can lay a foundation for the future.
SOLUTIONS FOR PATIENTS: ESCAPING FROM RIGID FEDERAL MANDATES, PRIORITIZING AFFORDABILITY AND ACCESS
1. Create a premium increase safety valve.
While supporters of the Affordable Care Act believe their law will work, data and estimates issued to date project higher costs for most Americans buying coverage. If premiums rise more than 10 percent in a state, residents should be allowed to purchase coverage free of onerous Washington mandates. Under this scenario, states would be given flexibility to approve affordable, innovative health insurance options to shield Americans from any potential increase in health care costs. And individuals and families would be able to choose the health coverage that best fits their needs, rather than having to buy expensive insurance that includes things that they don’t want or need.
2. Allow state coverage compacts.
Collaborative state partnerships should be promoted through “coverage compacts.” These compacts would put two or more states in control of their insurance markets rather than the federal government imposing one-size fits all plans. There is no reason to impose burdensome federal rules when people can come to better solutions through their elected representatives working in conjunction with neighboring states.
3. Give Americans coverage options like Members of Congress have today.
Members of Congress and federal workers have access to an array of quality health coverage options under the Federal Employee Health Benefit Program (FEHBP). There is no reason every individual should not have access to these types of benefit packages moving forward. The laws creating FEHBP did not impose heavy benefit mandates on the plans available to Members of Congress and federal workers. This statutory framework can serve as the model for health care choices available to every American.
4. Ensure consumers who like their insurance can keep it.
Although the president regularly promised that if you liked your health insurance, you would be able to keep it, the law actually limits the number of pre-Obamacare plans that can continue to be offered without change. Consumer-driven options, like health plans coupled with Health Savings Accounts, continue to face challenges from Affordable Care Act Public Health Service Act requirements such as the medical loss ratio. These plans and others available prior to enactment of the Affordable Care Act in the individual and small group market should be an option to anyone wishing to purchase them. This reform would help Americans keep their plan if they like it and provide greater flexibility in coverage than otherwise available under the Affordable Care Act.
5. Prioritize coverage for Americans with pre-existing conditions over wasteful spending.
While Republicans and Democrats fundamentally disagree about the best ways to reform our health care system, there should be no question that solutions for those with pre-existing conditions should be prioritized over other wasteful Washington spending. Money should be immediately rerouted from other parts of the president’s health care law to help sick Americans unfairly hurt by the administration’s decision to suspend enrollment in the program designed to help those with pre-existing conditions access affordable coverage.
6. Replace price controls with market-based solutions and incentives.
The president’s health care law imposes new government price controls on premiums known as guaranteed issue and community rating. While the law’s proponents say these provisions are needed to guarantee access, the result is an incentive for patients to wait until they are sick to purchase coverage. Moreover, these provisions are cited by independent experts and actuaries as the major reason many Americans will see double-digit increases in their premiums. These price controls should be replaced with resources to help sick Americans find affordable coverage, such as state-based high-risk pools. We will also work to end discriminatory pricing on Americans who responsibly maintain continuous coverage by plugging loopholes in current law.