It looks like the House debate on how to replace Obamacare is open again, with pressure mounting on conservative members to support the legislation proposed by House Speaker Paul Ryan.
Before members rush ahead, however, given the current pause in the bill’s passage, this appears an opportune moment to note a few of the major shortcomings in the legislation’s current iteration, and potential changes that would improve it dramatically.
- Get rid of the 30 percent premium hike for 12 months for those whose insurance lapses 63 days. The House-proposed legislation included this new mandate that looks too much like the individual mandate and will be used by the left and the right to hammer members for raising premium rates, particularly on the uninsured. When rates go up, Republicans will get blamed for the government-mandated penalty, and this provision will loom large. Moreover, it does nothing to incentivize uninsured to go out and buy insurance, since by definition insurance will always be more expensive if you’ve been uninsured for a sufficiently long time.
- Go across state lines. Instead, the way to incentivize more people to buy insurance is to cut consumer prices, by allowing purchase of insurance across state lines, creating a national market for insurance and much larger, likely regional risk pools. This was major campaign promise by Republicans in 2016 including President Donald Trump.
- Get rid of much of the insurance regulations. In a similar vein, and to inspire competition in the new, national insurance market, consumers should be allowed to purchase plans that cover less than other plans, if they choose, ranging from catastrophic-only plans at the bottom of the spectrum, for example to covering chiropractors at the high-end. Individuals will purchase what they think they and their families can afford, and what they need. By reducing via regulation what must be covered, cheaper options will become available via certain states that are less regulated, thanks to going across state lines, and consumers in more expensive states can buy plans in cheaper states if they want. This will, create real competition and prices will come down.
- Break up American Medical Association monopoly on medical schools and personnel. To help ease costs particularly on Medicaid (which an increasing number of seniors depend on for long-term care), more medical personnel are urgently needed. By 2027, there will be about 67.5 million seniors, according to U.S. Census Bureau projections. If they keep using long-term care at the same rate as 2012, then the number of patients will increase to 13.4 million, with about 7 million using Medicaid. By 2037, there will be 80 million seniors, with 16 million on long-term care, and about 8 million using Medicaid. So, in 10 years, the nation will need about 6.1 million senior long-term care workers. To keep up with demand, then, our nation’s universities will need to churn out an additional 2.3 million from what we have today. And in 20 years, 7.3 million senior care workers will be needed, 3.5 million more than we have today. By allowing more universities to teach medicine, we can fill that gap in rapidly, something that needs to happen over the next 10 years.
While by no means comprehensive, for example this memo does not address Medicaid expansion provisions in Obamacare or costly tax credits, these are a few market mechanisms that might help to bring costs down, the goal of this exercise. Because, if prices come down, there is no need for taxpayer-subsidized insurance.