A Possible Solution   Leave a comment

Freedom is an amazing thing because people who are free are able to think for themselves and come up with innovative solutions to the problems as those circumstances affect them.

The answer to America’s medical care crisis is not direction from Washington – which has already screwed up the best medical care system in the world. It is also not European-style universal care.

When I developed appendicitis while on a medical exchange in France several years ago, I dosed myself with antibiotics and painkillers and got on a plane to the United States. I risked a ruptured appendix over the Atlantic rather than use the medical care system operated by colleagues I respected. That should tell you something about my experience with European-style universal coverage. I was not putting my life in their hands and I still wouldn’t even though I am not running a fever at the moment.

So, what is the answer? Well, how about choice and innovation? How about putting doctors and the patients in the driver’s seat? How about taking the exact opposite approach from what broke the system in the first place?

Thinks about this. There are plenty of industries where businesses compete against one another without undue government regulation. Choices and innovation increase while prices and other barriers to access decrease. Why do we assume that a similar approach to reforming our medical care system wouldn’t also result in similar outcomes? No, it wouldn’t happen overnight, but it might well push the momentum in the right direction.

Obamacare’s rigid and centralized federal regulation of the nongroup market has failed. Premiums rose at unsustainable levels, choices dried up and enrollment in the individual policies continues to decline. Seven states were granted waivers from Obamacare mandates giving them the freedom to try new approaches. Significantly, states are achieving these favorable outcomes without the expenditure of additional federal funds. Instead, under their 1332 waivers, they re-purpose federal money that would have been paid directly to insurance companies in the form of premium subsidies, using it instead to directly pay medical bills for residents in poor health. These findings suggest that the most effective means of undoing the detrimental effect of Obamacare’s federal regime of subsidies, penalties, and regulations while ensuring that everyone can access private coverage is to provide states with the resources and flexibility to achieve that goal, rather than lashing them to a failing Washington-dominated system.

How do we do that? Well, Lela is down with just ending Obamacare tomorrow, but I’m more in favor of graduated measures like the Heath Care Choices Proposal. Under the proposal, current federal entitlement spending on Obamacare’s rigid structure of insurance subsidies and Medicaid expansion would be reprogrammed into state block grants, with broad flexibility for states to develop more consumer-centered approaches to meeting the needs of the poor and the sick, while keeping coverage affordable for other enrollees.

June 2018, a group of state and national think tanks, grassroots organizations, and health policy experts developed a proposal to enable and encourage state innovation. The Health Care Choices Proposal would reverse the Obamacare polarity. In place of rigid federal constraints from which waivers could provide limited relief, the proposal would rely on states to devise ways to assist the sick and needy, without pricing coverage out of the reach of healthy and middle-income families. The proposal would repeal Obamacare’s federal entitlements to premium assistance and Medicaid expansion and replace them with grants to states to stand up consumer-centered programs. Instead of asking Washington’s permission for some limited flexibility, states would use federal resources to finance approaches that best serve the needs of their residents.

The proposal would put in place some conditions for the grants. First, every individual who receives subsidies from the federal government (including Medicaid and Children’s Health Insurance Program), would be given new freedom to spend that money on the coverage arrangement of their choice— vastly expanding their options. States, additionally, would have to use a portion of their federal allotment to establish risk-mitigation programs. The proposal would also require states to spend a specified portion of their federal grants on subsidizing private, commercially available insurance coverage for people with low incomes. States could not use the money to expand Medicaid or consign low-income people to state-contracted managed care plans.

The proposal would release states from Obamacare requirements on essential health benefits, single-risk pools, medical loss ratio, and the 3:1 limit on age rating. Nullifying these mandates and providing states with new flexibility would reduce premiums, allow premiums to more accurately reflect medical risk, and, in combination with risk mitigation, assure that the sick get the coverage they need without saddling the healthy with unfairly high premiums.

Most important, the proposal would replace the Washington-knows-best approach to health policy with one that invests states with the policy initiative, something the section 1332 waiver process cannot accomplish. The block grant approach provides certainty for state (and federal) governments by putting spending on a budget that can’t be increased, as is the case today, if a state or insurer decides to spend more money. The block grant also gives states greater certainty in projecting the amount of federal funding that will be available to them over time. And it helps consumers because it gives new freedom to people to control their federal subsidy and direct it to their choice of a wide range of private coverage arrangements. Regardless of the approach a state chooses to implement, an individual can claim the value of the benefits and use it on the private coverage arrangement of their choice.

States have shown they can take steps under Section 1332 to stabilize their markets without new federal money. It is utterly unnecessary to spend new federal money in the name of market stabilization.

Instead of providing new federal money or creating new federal programs, policymakers should revise the section 1332 waiver process. This would allow policymakers to make incremental progress toward the goal of transitioning from Obamacare’s Washington-centric approach to state-based health care reform. Obama Administration limits and statutory limits on the section 1332 process should be relaxed or removed during that transition. There already are a variety of proposals to do just that, including one from Senate HELP Committee Chairman Lamar Alexander. CMS should start by rescinding the December 2015 guidance, which imposes restrictions on state innovation that go beyond the already excessive statutory restrictions, creating burdens that are costly and time-consuming. In many cases, states have withdrawn their applications rather than see the process through to its conclusion. CMS should replace this process with a streamlined approach and develop model waivers organized around the principle of reducing premiums for private coverage in the broader non-group market, increasing choices for consumers. Such changes—while insufficient to the larger task of needed reform—would support states’ near-term efforts to address Obamacare’s damage to their broken private markets as part of a transition to the broader solution.

Posted January 4, 2019 by aurorawatcherak in Common sense

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