Since most of the restrictions were created by Democratic legislation, it is tempting to view the liberation of health care as a Republican project. Yet there is no reason that it couldn’t be bipartisan.
The reforms suggested below are not conservative or liberal, Democratic or Republican. They are commonsense solutions that will appeal to the vast majority of voters.
Give Cash, Not Medicaid
Many doctors won’t take Medicaid patients because Medicaid payments are so low and because Medicaid rejects more claims than either Medicare or commercial insurance. Many of our top medical centers won’t take them, either. A similar problem arises with various forms of convenient care— such as walk-in clinics and freestanding urgent-care facilities.
One consequence is that Medicaid patients frequently turn to community health centers or hospital emergency rooms (ERs) for their medical care. In fact, new enrollees in Medicaid visit emergency rooms 40 percent more frequently than others do. Wait times in ERs can be as long as six hours.
Why not let Medicaid enrollees buy medical care the way they buy food with food stamps? They could add out-of-pocket cash to pay any portion of the bill that the government subsidy doesn’t cover and acquire care at market prices. Patients could add this cash to any portion of the bill Medicaid does not cover.
One possibility is to put money into a health savings account (HSA), from which people could buy medical care and private insurance. Any remaining HSA funds could be withdrawn for nonmedical spending.
Let Employers Fund Direct Care
Not long ago, wealthy people paid thousands of dollars to “concierge doctors” who could talk to their patients by phone. Such arrangements were completely outside the normal third-party-payer system.
Today, this kind of service is called direct primary care (DPC), and it is increasingly affordable and popular. It is membership-based and can cost as little as $50 a month for an adult. DPC doctors can communicate with patients using phone, email, or video conferencing, 24-7, without government restrictions.
The government prohibits employers from putting money into an account from which employees can pay for DPC. This needs to change.
Let Employees Pick Health Plans
Most people with health insurance get a subsidy from the government or an employer, with lots of strings attached.
Before Obamacare, some employers funded personal and portable health insurance chosen by the employee and owned by the employee. Administrations can fine employers for doing this. Or they can order employer insurance to be Obamacare-compliant.
Employees should be allowed to choose whatever plan best suits them and be able to keep this insurance when they change jobs.
Give People More Insurance Options
Obamacare was originally sold to the public as a way of protecting people with preexisting conditions, but these plans sold in the individual market on the exchanges are lousy protection for the sick.
If you are sick, the annual out-of-pocket maximum exposure for a family this year is $18,900 in deductibles and coinsurance, over and above any premium payment. The average family premium last year was $13,824. People with above-average incomes do not qualify for a government subsidy. And because network provider choices are limited, Obamacare plans resemble Medicaid but with higher deductibles.
One alternative is short-term, limited-duration insurance. These plans are largely unregulated and will exclude people with chronic conditions, but because of that, premiums are about half the price of an Obamacare plan and the coverage networks are much broader.
President Joe Biden restricted these plans to three-month terms, which limits protection in case you get sick, whereas President Donald Trump allowed the plans to last 12 months and be renewable for up to three years. When Trump did this, demand for the plans jumped to three million from 600,000.
Incentivize Insurers to Cover the Sick
Unwise government regulations give insurers every reason not to want to cover the chronically sick. One exception is Medicare Advantage, in which Medicare pays insurers more money (a risk adjustment) to cover seniors with a specific health condition, such as cancer.
This setup incentivizes insurers to be on the lookout for changes in a patient’s health status. It also gives plans a reason to specialize in covering certain kinds of care. This sort of specialization is not allowed in the Obamacare exchanges, where plans are forced to be all things to all patients.
The market for individually purchased insurance would be radically transformed overnight if we allowed it to operate under the same rules that Medicare Advantage does.
Unleash Health Savings Accounts
We need to divorce HSAs from any deductible requirement and allow the market to make decisions about cost-sharing by patients. To be eligible for an HSA, patients must be enrolled in a high-deductible health care plan. Those deductibles may discourage people from taking steps to avoid high-cost medical problems, such as by taking insulin.
President Trump allowed employers to provide maintenance drugs freely to employees for 13 chronic conditions without jeopardizing the employees’ HSAs.
Establish Tax Fairness
Currently, people at the same income level are getting radically different tax subsidies, depending on where they get their health insurance.
In the Health Care Fairness for All Act, introduced by Rep. Pete Sessions (R -TX) and his colleagues, health insurance subsidies would resemble John McCain’s proposal in 2008 to ditch subsidies with a uniform, refundable tax credit.
John C. Goodman, Ph.D. (johngoodman@goodmaninstitute.org) is co-publisher of Health Care News and president and founder of the Goodman Institute for Public Policy Research. An earlier version of this article appeared in National Review on June 13, 2024. Reprinted with permission.
