Here is a health care proposal that could actually work

Here is a health care proposal that could actually work
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Congress has an opportunity to declare a ceasefire on health care and shift its policy focus to other pressing issues. Even better, the solution is one where almost everyone can claim victory with a straight face.

The fundamental discord in enacted policy is how do we, as a society, pay for the health care of people who have persistent, high-cost needs? Democrats prefer a combination of federal funding and cross-subsidization by healthy individuals in the individual market to pay for the care of the sick. The Republican preference is to increase federal subsidies for the ill and expensive while simultaneously decreasing how much the healthy subsidize the remainder of the individual market.

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There is a solution that could work to help states provide individuals with affordable and accessible health insurance while turning down the heat on health policy.  

 

Congress should allow any family to receive federal help so that they do not pay more than 10 percent of their income for qualified ACA health insurance. This will make sure that all families will have access to affordable coverage without regard to their health status.

The coming repeal of the individual mandate penalty in 2019 and the loosening of rules for short term, underwritten policies most attractive to low-risk individuals will make the ACA risk pools sicker on average.  

Healthier people will leave the ACA market for the newly-available options. In a recent report, the Urban Institute estimates that the federal government will spend $33 billion more on subsidies than under the ACA individual mandate and prohibition on short-term plans, while covering millions fewer individuals.

One group of Americans will be hit very hard: middle class families that earn more than 400 percent Federal Poverty Level ($100,400 for a family of four) make too much to qualify for a subsidy and who also have high-cost medical conditions.

Senator Bill CassidyWilliam (Bill) Morgan CassidyThis bipartisan plan is the most progressive approach to paid parental leave Obstacles remain for deal on surprise medical bills Key House and Senate health leaders reach deal to stop surprise medical bills MORE (R-La.) has frequently referred to the example of a family where the parents are in their mid-50s with two children, one a teenager and the other a young adult. Their older child has a significant seizure disorder. The family earns too much to qualify for ACA premium subsidies, so they pay the full price for their insurance. This year, the family will spend more than $50,000 on health care.

This family needs help and it is not getting it from the set of policies proposed by either party. Under Republican policies, this family will face even higher premiums because the ACA risk pool will get sicker and more expensive, which means higher premiums.

Their older child will not qualify for an underwritten plan that can consider her health history. Their choice is to pay the equivalent of their mortgage every two weeks to buy health insurance, or to go uncovered. It is not a tenable choice.

Removing the cap on ACA subsidies so every family can access the ACA Silver plan for no more than 10 percent of its family income would provide immediate relief for Senator Cassidy’s constituents and others in similar situations. At the same time, the proliferation of underwritten plans will offer less expensive options for families without health challenges.

Patients and families will be able to choose the plans that will work for them. The ACA market will mostly cover the working poor who receive high subsidies and low deductibles, as well as the very sick who need to have comprehensive benefits and broad provider networks.

The underwritten market, which Republicans support and are seeking to expand, will consist of healthier individuals whose premiums no longer subsidize the care of the chronically ill in the individual market.

Those costs do not disappear, as the size of the federal commitment to premium subsidies for the ACA plans will increase significantly. However, everyone will have access to health insurance with a premium ceiling and lower risk consumers will be better off.

David Anderson is a research associate at the Margolis Center for Health Policy at Duke University.