Nine ways to re­ally fix Oba­macare

The Washington Post Sunday - - SUNDAY OPINION - BY STEVEN BRILL Steven Brill is the author of “Amer­ica’s Bit­ter Pill: Money, Pol­i­tics, Back­room Deals, And The Fight to Fix Our Bro­ken Health­care Sys­tem.” He has re­ceived con­sult­ing fees for work on a con­sumer in­for­ma­tion and om­buds­man pro­gram for New Yor

If Se­nate Ma­jor­ity Leader Mitch Mc­Connell can­not sal­vage his party’s ef­fort to re­peal and re­place the Af­ford­able Care Act, there is still a way for­ward if he and his Demo­cratic col­leagues truly want to fix Oba­macare. All they have to do is be will­ing to com­pro­mise — and to ac­knowl­edge some his­tory.

The fail­ure of the Repub­li­cans to agree, so far, on an al­ter­na­tive to Oba­macare should not be sur­pris­ing — be­cause Oba­macare was, in fact, the long-stand­ing Repub­li­can al­ter­na­tive to the more rad­i­cal health­care re­forms, such as a sin­gle-payer sys­tem, that Democrats have pro­posed since the Tru­man era. What Pres­i­dent Barack Obama and his party pushed through Congress in 2010 was more con­ser­va­tive — and more pro-pri­vate sec­tor — than what Richard M. Nixon pro­posed in the 1970s, or what Repub­li­can Gov. Mitt Rom­ney im­ple­mented in Mas­sachusetts in 2006. Put sim­ply, Obama dared Repub­li­cans to take yes for an an­swer. In a po­lar­ized Amer­ica, they still said no.

Oba­macare did lit­tle to deal with the prob­lem of health-care costs. There would be no cost-con­trol in­ter­fer­ence with the only-in-Amer­ica prof­its of drug com­pa­nies, med­i­cal de­vice mak­ers or hos­pi­tals. In­stead, the law sub­si­dized Amer­i­cans who could not oth­er­wise af­ford health in­sur­ance, al­low­ing them to be­come pay­ing cus­tomers in the same over­priced pri­vate-sec­tor sys­tem.

True, there would be a pro­vi­sion aimed at mak­ing the in­sur­ance pool big enough to keep costs lower than they would be if peo­ple could just buy in­sur­ance when they got sick. Ev­ery­one would have to buy in­sur­ance (with sub­si­dies where nec­es­sary) or pay a penalty. But that big-gov­ern­ment man­date was first sug­gested by the con­ser­va­tive Her­itage Foun­da­tion in 1989 un­der the ban­ner of a clas­sic con­ser­va­tive prin­ci­ple: “in­di­vid­ual re­spon­si­bil­ity.” Rom­n­ey­care in­cluded the same man­date.

Oba­macare per­formed a great public ser­vice by giv­ing more Amer­i­cans ac­cess to health care. But by not ad­dress­ing costs, it pre­or­dained the prob­lem that Mc­Connell and the Repub­li­cans have said they are try­ing to fix this year: ris­ing in­sur­ance pre­mi­ums and some in­sur­ers flee­ing the mar­ket be­cause their costs are too high.

How­ever, the Repub­li­cans’ an­swer would fix noth­ing re­lated to health-care costs, while elim­i­nat­ing ac­cess to care for mil­lions of poor peo­ple in or­der to cut taxes for the wealthy. They have pro­posed low­er­ing pre­mi­ums not by rein­ing in costs, but by al­low­ing in­sur­ers to sell shoddy in­sur­ance that pays for less health care. That will not work in any event, be­cause the health­i­est peo­ple would buy the cheaper prod­ucts, leav­ing those who need full pro­tec­tion in a less healthy in­sur­ance pool fac­ing sky-high prices. (“Con­sumer choice” may sound like an unas­sail­able virtue, but in in­sur­ance it can be self-de­feat­ing.)

So, here are nine ways that Democrats and Repub­li­cans could come to­gether — if they re­ally wanted to — to fix Oba­macare by truly tack­ling the prob­lem of high pre­mi­ums caused by high costs.

1. The Repub­li­cans were right that a 3-to-1 ra­tio — heav­ily lob­bied for by the Democrats’ friends at AARP — be­tween the rates charged for older peo­ple and those for the youngest adults does not match the rel­a­tive ac­tu­ar­ial costs of in­sur­ing the two groups and dis­cour­ages the young from en­rolling. The ra­tio should be moved to 5 to 1, as was orig­i­nally con­tem­plated by those draft­ing Oba­macare un­til AARP got to them.

2. How­ever, much more gen­er­ous sub­si­dies should then be given to older Amer­i­cans to make in­sur­ance more af­ford­able to them.

3. Those in­creased sub­si­dies could be paid for by new con­trols on the price of pre­scrip­tion drugs, ei­ther by al­low­ing Medi­care to ne­go­ti­ate prices or by other mech­a­nisms used by ev­ery other de­vel­oped coun­try, where prices are 30 to 60 per­cent lower than here. Tak­ing just 15 per­cent off the price of pre­scrip­tion drugs would pro­duce more than $600 bil­lion in health-care sav­ings over the next decade, which would lower pri­vate pre­mi­ums while sav­ing tax­pay­ers bil­lions on Medi­care costs.

4. As an ad­di­tional lure to get younger, health­ier peo­ple into the in­sur­ance pool, in­sur­ance com­pa­nies should be al­lowed to of­fer them an in­tro­duc­tory 50 per­cent off for their first year of cov­er­age.

5. Five per­cent of Oba­macare’s 2.3 per­cent ex­cise tax on med­i­cal de­vices (which was sus­pended in 2015 and should be re­in­stated) should be used for a mas­sive mar­ket­ing pro­gram aimed at en­tic­ing younger peo­ple into the pool. The ad cam­paign should also tout the man­date to buy in­sur­ance (which must be kept) as, in the Her­itage Foun­da­tion’s words, a mat­ter of “in­di­vid­ual re­spon­si­bil­ity.” The more young peo­ple who en­roll, the lower the pre­mi­ums will be for ev­ery­one.

6. Medi­care should fi­nally be al­lowed to fully im­ple­ment com­pet­i­tive bid­ding for med­i­cal equip­ment and de­vices. Be­lieve it or not, Congress has re­stricted Medi­care’s abil­ity even to ne­go­ti­ate the price of di­a­betes test strips to se­lected “pi­lot project” re­gions. Com­pet­i­tive bid­ding could save the gov­ern­ment at least $50 bil­lion over the next decade, which could be used to in­crease premium sup­port for older Oba­macare en­rollees.

7. An­titrust re­form needs to be part of the new pack­age, too. Hos­pi­tals are merg­ing with abandon. Ev­ery study says that al­though they say they are do­ing it to save money by con­sol­i­dat­ing ser­vices, prices al­ways go up in­stead. How are in­sur­ers sup­posed to keep pre­mi­ums un­der con­trol if they can ne­go­ti­ate with only one hos­pi­tal sys­tem that con­trols all the area’s hos­pi­tal beds and most of the doc­tors and clin­ics?

8. The ex­per­i­ments in bun­dled pay­ments (as op­posed to pay­ing for ev­ery episode of care) for knee and hip re­place­ments or car­diac surgery, which Health and Hu­man Ser­vices Sec­re­tary Tom Price has sharply cur­tailed, need to be re­stored and in­ten­si­fied.

9. Fi­nally, tort re­form should be in­cluded. Abuse of mal­prac­tice suits is not as costly as Repub­li­cans claim, but it is a real is­sue be­cause it pro­vides a rea­son — and an ex­cuse — for hos­pi­tals to over-treat and over-test. If tort re­form shaved just half of one per­cent off of health-care costs, that would yield close to $200 bil­lion over a decade. Democrats need to stand up to their trial lawyer pa­trons on this one.

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