HomeHealth Care NewsHeartland Plan Offers Lifetime Health Accounts

Heartland Plan Offers Lifetime Health Accounts

The Heartland Institute, which co-publishes Health Care News, unveiled a plan that could fix universality and affordability in health care once and for all.

A central feature of the 26-page American Health Care Plan (AHCP) is “the health ownership account (HOA),” which would incentivize consumers to spend more wisely on health care and encourage providers to give more bang for the buck. The plan also radically reforms Medicaid so that able-bodied enrollees have more control over how health care funds are spent, enrollees have more of an on-ramp to get into better health care programs, and states have more control over how best to protect the disabled with their unique needs.

Although the United States is known for having the best health care in the world, the system is replete with problems, write authors Justin Haskins and S.T. Karnick.

“The American model is highly inefficient, bureaucratic, full of burdensome regulatory hurdles, and unnecessarily expensive,” Haskins and Karnick write.

The answer is not to give bureaucrats more power to do more of what has not been working. Rather, the solution is to encourage competition and individual responsibility for health care spending. The AHCP would not only do that, but it would save money.

“In fact, the plan would likely save billions of dollars compared to current health projections,” Haskins and Karnick write.

How the ACHP Works

The ACHP is comprised of several parts that would have to be incorporated as a whole for it to work. The plan would terminate the Obamacare exchanges, expand association health plans, promote and encourage all states to legalize direct primary care (DPC), make employer health insurance portable, transform Medicaid into a health savings account model, and give everyone access to an HOA—even those in Medicaid and those who are self-employed.

By eliminating the Obamacare exchanges, states could allow a wide variety of health insurance plans so that consumers can purchase the coverage they need. There would be a three-year grace period to allow those with pre-existing conditions to buy into an affordable plan. Beyond that, states could set up safety nets as part of the Medicaid transformation.

As had been the case at first with Obamacare, individuals would not have to pay a penalty if they chose to go without health insurance, but there are incentives in the plan that will encourage healthy individuals to seek coverage. Because there will be a variety of health insurance plans with a wide range of price points, healthy individuals will be less reluctant to stay out of the market, now a problem with expensive Obamacare plans.

Consumers Pay Direct

Consumers may no longer be willing to buy all-inclusive, “Cadillac” health insurance plans, so there will be a market for low-cost options to cover basic health care. DPC, a model used successfully in many states, is a central feature of AHCP. In a DPC plan, consumers pay a direct, flat, low-cost fee, generally under $100 a month, for a list of primary care services.

It is difficult to find DPC in all parts of the country because some states consider DPC insurance, subject to pricey health insurance regulations. Haskins and Karnick write that the federal government can create incentives for states to change their rules which would attract more DPC practices to open their doors.

Revolutionize Employer Insurance

Approximately 40 percent of the country receives health care through an employer, and it is one of the most prized benefits in the workplace. Under the ACHP, this arrangement would be completely revamped so that employees with pre-existing conditions aren’t stuck when they leave their employer and have to buy an expensive plan on the individual market.

Under the AHCP, instead of purchasing health insurance for employees, employers would put this money into an employee’s HOA, which would make coverage “portable.” The accounts stay with the employee and can be used to pay for health insurance premiums and health-related expenses for themselves and their family members. The funds in the accounts would be carried over year after year.

After three years, an individual can withdraw up to 10 percent of the funds for any purpose, as long as they continue to purchase a health insurance plan and enroll in a DPC.

Medicaid Freedom

Another major feature of the AHCP is the way it reforms Medicaid.

The plan calls for splitting enrollees into two groups, one for those with significant disabilities, the other for able-bodied individuals who are in financial need. Those with significant disabilities would receive health care assistance through high-risk pools that states would set up.

Each enrollee would get $6,000 each year from the government to place in an HOA.  Currently, Medicaid spends $8,800 per enrollee. Those in the temporary program would have to work, be in school or in a job training program. Like those not in a government-funded plan, enrollees can spend some of their money as they see fit, but with one big string attached: they must exit the program.

Winning Support

The big hurdle for the AHCP is gaining traction in a deeply divided Congress.

“Although free-market advocates have offered numerous good ideas for reforming the regulation of the nation’s health care system, it has been difficult to find legislative traction because many constituencies benefit from the current system though others are denied access to good health care, “ Karnick tells Health Care News. “The AHCP offers a comprehensive approach that spreads the benefits of choice and competition to all consumers and a much greater variety of providers, greatly increases access to health care and not just insurance, reduces costs, and creates beneficial incentives throughout the system.”

The AHCP is the policy solution the nation has been waiting for, says Haskins. “Medicare for All and Joe Biden’s ‘public option’ plan would certainly increase access to low-quality health coverage for some Americans, but it would do so at the expense of the rest of the health care system and the families it serves,” said Haskins. “Health care reform shouldn’t reward some by punishing others, and it certainly shouldn’t do so when those ‘rewards’ are lackluster, at best.

AnneMarie Schieber (amschieber@heartland.org) is the managing editor of Health Care News.

Internet info:

Justin Haskins, S.T. Karnick, The American Health Care Plan, The Heartland Institute, April  12, 2021.




AnneMarie Schieber
AnneMarie Schieber
AnneMarie Schieber is a research fellow at The Heartland Institute and managing editor of Health Care News, Heartland's monthly newspaper for health care reform.


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