House Republicans Release Alternative to Obamacare
This week, House Republicans released a healthcare reform plan to be considered if and when Congress and the next president repeal Obamacare. The proposed policies are market-driven reforms that incentivize competition and investment in the U.S. healthcare industry, as well as provide greater protections, choice and price transparency to patients.
Under this proposal, the individual and employer mandates in the Affordable Care Act (ACA) will be replaced with a $2,500 annual adult and $1,500 child tax credit, which will give individuals the power to purchase health insurance on the open-market. The annual tax credits will be advance-able and refundable, and will empower individual choice in the non-group market. If the prescriptive requirements of the Obamacare ‘metal’ plans are repealed and insurers are free to create portable, patient-centered plans, competition in the open market will bring greater choice – not penalties – into our healthcare system.
One of the more notable changes in the ‘Better Way’ proposal is the switch from majority support of reforming the Medicaid program through implementation of a Medicaid Block Grant, to enacting a per-capita allotment financing model for the program. With a per-capita allotment, states will have greater financial flexibility both in times of economic downturn and economic stability, while also prioritizing our most vulnerable populations the program was initially designed to protect: blind and/or disabled adults and children, as well as those receiving long term care services and support.
The House proposal would also do away with the antiquated Medicaid waiver process currently required by the Centers for Medicare and Medicaid Services (CMS). For states, greater authority over designing their Medicaid program will relieve them of the uncertainty of that long and costly process, as well as offer the opportunity to implement more modern approaches to caring for their most vulnerable populations.
In addition to incentivizing the private market and modernizing Medicaid, the House GOP plan proposes policies that will bring fiscal solvency to the Medicare program, which is currently forecasted to run out of money in 2028. Some of the proposed changes include repealing the Independent Payment Advisory Board (IPAB) and Centers for Medicare and Medicaid Innovation Center, both of which make decisions affecting care for seniors in this country by unelected and unaccountable federal officials.
Other reforms to Medicare include giving greater authority to providers who design Medicare Advantage plans, so they may offer high-quality and targeted benefits to seniors. Similar to the Obamacare insurance plans sold on the exchanges, Medicare Advantage plans currently have a one-size-fits-all benefit structure. Another reform proposal is to combine the deductibles for Medicare parts A (which covers hospital care) and B (which covers doctor’s visits) to create greater cost savings for the beneficiary. Combining the benefit structure of Medicare is more in line with how the U.S. health insurance industry is today, and less reflective of payment structures from decades past.
The majority of the reforms in the House GOP ‘Better Way’ plan have been introduced in separate pieces of legislation over the past six years and are being presented to the American public to begin the discussion about a ‘replacement’ to Obamacare ahead of the 2016 general election. Each of these free-market reforms is a critical component of solutions that will reverse the trend of increasing insurance premiums, deductibles and out-of-pocket costs largely caused by the one-size-fits-all, top-down regulatory requirements of Obamacare.