House Speaker Paul Ryan is talking out of both sides of his mouth on health care reform. He claims that his proposed “American Health Care Act” (AHCA) will increase choice and lower costs. Yet the actual bill preserves many of the provisions in Obamacare that do the opposite. (I wrote about the bill at Bombthrowers on Saturday.)
Ryan criticizes Obamacare because it “was based on a one-size-fits-all approach that put bureaucrats in Washington in charge of your health care. The law led to higher costs, fewer choices, and less access to the care people need.” By contrast, Ryan claims, what Republicans are proposing “will decrease premiums and expand and enhance health care options so Americans can find a plan that’s right for them. We also make sure Americans can save and spend their health care dollars the way they want and need—not the way Washington prescribes.”
The GOP plan, he adds, “returns control of health care from Washington back to the states and restores the free market so Americans can access the quality, affordable health care options that are tailored to their needs.”
I, for one, look forward to that plan being released in the near future. It would be a huge improvement over the AHCA.
The AHCA keeps in place the Obamacare provision that requires all plans to cover 10 “essential benefits.” This means that if you want to use the tax credits the AHCA offers for the purchase of insurance, the insurance you buy must include all of those benefits. Yet forcing insurers to cover benefits increases the cost of insurance.
If Ryan were serious about lowering costs, he’d eliminate this provision and let the customers decide which benefits are “essential.”
The essential benefits include the maternity care benefit. So, what if you are a young man or even a young woman who has no immediate plans to start a family, and you would like to forego the maternity benefit in favor of a lower premium? Well, in this case Speaker Ryan has decided that paying a higher premium so that you get a benefit you don’t want best fits your needs.
Suppose you would like to buy a policy that has an annual and/or a lifetime dollar limit since it would be cheaper than policies without those limits? Well, the GOP leadership on Capitol Hill has decided that such a plan would not fit your needs either and it has therefore retained Obamacare’s ban on annual and lifetime limits.
And, the AHCA maintains the Obamacare requirement that policies cover preventative services without cost-sharing. This provision is based on one of the biggest myths in health care, namely, that preventive services save the health care system money. A 2008 article in the New England Journal of Medicine dispelled that myth. It found that only 20 percent of preventive care saves money, while the remaining 80 percent increases health care costs. Having a policy without preventive benefits or at least one that requires cost-sharing would seem to be another way to lower the cost of health insurance. Apparently, Washington thinks that such a policy won’t fit your needs either.
To be fair, if the AHCA or any other health care legislation is going to offer tax credits for the purchase of health insurance, then that legislation must define health insurance. Obviously, we don’t want people using that tax credit to buy things that are not health insurance or health care related. That said, it isn’t that hard to define health insurance in such a way that it gives individual and families a great deal of freedom in deciding what kind of health insurance they want to buy.
Health care reform legislation should define health insurance in such a way that the sole requirement for using the tax credit would be that the health insurance purchased provided at least a minimal level of coverage. Legislation could be written in which an individual or family would qualify for a tax credit under the GOP plan as long as they purchased insurance that covered at least, say, $100,000 worth of medical expenses annually.
This isn’t set in stone, of course. The GOP could set the minimum at $250,000 if that would make it more politically popular. Either way such coverage would be very affordable. The point, though, is that would be the only restriction on the tax credit. If a consumer only wants to purchase insurance that covers one of the 10 essential benefits, he is free to do so. If a consumer wants to purchase a policy that provides more than $250,000 coverage, he is free to do so. If a family wants a policy that covers benefits other than the 10 benefits deemed essential, it would be free to buy one.
This would require Speaker Ryan to push legislation that permits insurers to offer policies that have annual and lifetime limits. But it seems that Ryan has taken the traditional GOP legislative path that involves keeping features that are popular with Democrats while throwing a few bones to conservative Republicans.
This seldom works and isn’t working now.
Democrats are already attacking the AHCA despite its retention of the 10 mandated benefits, protections for pre-existing conditions, and bans on annual and lifetime limits. Conservative Republicans are right to be unhappy that the legislation doesn’t include enough free-market reforms.
Ryan recently said in an interview that all legislation is a compromise.
This is a tired old truism. If he were serious about bringing patient choice to health care, he would open negotiations with a proposal that didn’t retain the freedom-limiting mandates of Obamacare.
Unfortunately, his AHCA bill does exactly that.