Affordability is key
Attention must be paid to law’s provisions that threaten to increase costs
With the legal questions regarding healthcare reform settled, job No. 1 must be tackling the very serious affordability issues ahead. Affordability is the issue that keeps millions of Americans awake at night. It is the issue that agonizes small-business owners struggling to keep their doors open. It is also a strategic challenge to large American employers facing global competitors from nations that devote a much lower share of their spending to healthcare. Affordability is what will ultimately determine whether or not healthcare reform works.
The facts are well known in policy circles. We spend more, far more, than our OECD competitors, and healthcare crowds out investments in other critical national priorities such as education and infrastructure. Rising healthcare costs are a contributor to stagnant wage growth.
What can be done? First and foremost, we need to focus on provisions of the law that raise costs. That starts with repealing the misguided premium tax that the Congressional Budget Office has said will result in dollar-for-dollar premium increases for individual market purchasers, small employers and those covered by private Medicare and Medicaid plans. Taxing healthcare coverage can only make that coverage more expensive, not more affordable.
The essential health benefits and actuarial value provisions are intended to ensure that all Americans have quality coverage. But in compelling millions of currently insured Americans to purchase much more coverage than they currently have, they will, by definition, result in higher costs. These provisions need to be implemented with affordability squarely in mind and need to be constantly monitored to assess whether more flexible approaches would provide relief to individuals and small employers.
A system-wide, all-stakeholder commitment to delivery and payment reform also is needed. Health plans and providers are partnering more actively than ever to promote prevention and wellness, help patients and physicians manage chronic disease, and reward quality care. The law includes promising pilots aimed at getting public programs to emulate private-market innovations. Both sectors need to continue building upon the progress being made to improve quality, ensure greater value for our nation’s health spending and promote affordability.