One man's view of theology, sports, politics, and whatever else in life that happens to interest me. A little bit about me.

Saturday, May 17, 2014

Two Changes That Would Revolutionize Obamacare

As I wrote yesterday, I’m willing to be optimistic with regard to Obamacare, even though I am a conservative. I believe it has the potential to make our health care system better in a few years than had we stuck with the status quo. I’m not totally sold on it, for sure, but I’m also sure it’s not the linchpin that sends America over the cliff into a socialist nightmare.
All that being said, there are a couple of serious flaws that I think would be better served by more freedom-based solutions rather than government ones. The first would be reforming the exchanges. I would do this in two ways. Let me start off by saying the concept of the exchanges is actually quite the conservative idea. All the controls and limitations imposed by the ACA are not, but that's something that can be worked out. Don’t know why conservatives think consumer choice in a competitive market is somehow bad – I guess they do because it has the president’s name on it. But there are a couple of problems that need to be addressed.
The first problem is having the government involved at the front end of the process. I understand it was set up that way to help with the low-income subsidies. But that could be done simpler by the individual after they have found the plan they want. The problems with the web site would have been alleviated for the most part if people could find the coverage they need for themselves and then inform the government after the fact to obtain the subsidy. The government could have provided information to the various insurance companies beforehand so they could give prospective clients guidance as to how much of a subsidy they could expect.
The second aspect of the exchanges that needs to be addressed is the elimination of state insurance regulations. Here in Alabama, most people could only choose health care plans from one company, the same company that insures more than 90% of state residents. One of the problems was that Alabama chose not to set up its own exchange but to allow the federal government to do it for them. Not the most conservative-minded move by a GOP-controlled state. But the main problem is the state insurance board’s regulations are set up for the benefit of the one company, and the federal exchange had to abide by those regulations. I have heard several people blame Governor Bentley, a doctor by trade, for setting up the state to benefit one company, but the fact is those regulations have been in place for a long time.
The ironic fact is that had the ACA gone farther to remove the various states’ insurance regulations and established one broad set of regulations that applied equally to everyone, the exchanges would have been more successful and people would have had more choices. Think about the car insurance market. You can’t watch TV anywhere for 15 minutes without seeing a car insurance commercial. They offer all sorts of discounts, “vanishing deductibles,” cash back for no incidents, etc. How can they do that? Because there are practically no regulations in any state on car insurance, besides minimums for liability coverage. I know car insurance and health insurance aren’t exactly the same thing, but conservatives should be pushing for more consumer freedom within the framework of Obamacare instead of demanding its repeal and doing more damage to consumers. When consumers and providers are free to choose, they come up with creative solutions that provide benefits for both.
Alabama or any other state with a Republican governor and legislature could have decided they were going to customize their exchange with the best possible conservative ideas, and they would have become a shining example to the rest of the states as to how to implement Obamacare effectively. But no, they ironically decided to opt out of the process, allow the federal government to do it for them and then complain about the results. But at least they were able to go to those GOP fundraisers and proclaim they were fighting the president’s agenda. A more effective fight would have been to turn the tables on him and implement freedom-based ideas.
The second problem I have with the ACA is the expansion of Medicaid that went with it. This does nothing to streamline the medical system. It discourages the upper tier of the low-income population from participating in the exchanges. Medicaid is a cesspool of bloat and waste, and has been pretty much from the beginning. The expansion of Medicaid is actually counter-productive to the goals of the ACA, or at least its stated goals (I’m not convinced that the president’s goals are not to work toward a single-payer system).
A better solution would be to lower the top income threshold for Medicaid and allow those at the top of that income bracket to obtain heavily subsidized insurance plans from the exchanges. This would save taxpayers a lot of money. Whatever the government would underwrite for the premium subsidy would be much less and be spent more efficiently than if they were allowed to remain in Medicaid.
Beyond that, for the poorest of the population Medicaid should take more of an HSA format rather than the single-payer system that it is now. Poor people are not stupid. If given the incentive, they will opt for cheaper, more efficient health care solutions. For example, if we assigned them a certain amount per year based on family size, income and overall health and let them keep 25% of what they didn’t spend by the end of the year, there would be repercussions all over the place, most of them good. The taxpayers would still be footing the bill for these people’s care needs, and we would need to reassure them that everything they need would be there in the event of a catastrophe. People I have talked to in the health care industry will tell you that Medicaid patients are the worst for coming into doctor’s offices and emergency rooms for minor complaints. They do this because they can – Uncle Sam is going to foot the bill.
These two changes would do wonders to meet the stated goals of the ACA: to reduce the burden of health care on consumers and the health care system. We don’t need a bloated, inefficient single-payer system. They do seem to work in small, compact countries, but the US is a vast, diverse country. There are flaws in the case studies presented by liberals, all of which involve countries much smaller and with a more compact population than the US. A single-payer system would be as devastating for the entire country as the current single-payer system is for the poor and for veterans. That’s not the solution. The ACA is, perhaps unintentionally, a nudge in the right direction, but only if conservatives are willing to take advantage of it.

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