• Conservative adjustments to the Affordable Care Act, in order of feasibility

    I’d love reader feedback on this, in the comments, on Twitter, by email, whatever. Below is a list of potential changes to the ACA that might be appealing to conservatives, and maybe even some near-center liberals. I’ve listed them in approximate order of technical — not necessarily political — feasibility (lower number = more feasible; ties are possible). But I could be wrong in ordering. (These are rough guesses.) So, correct me! I am almost certainly wrong in completeness. What did I leave out? And, which ideas aren’t as appealing to conservatives as I might be implying?

    Even though I’m not considering politics here, you can. How would you reorder the list in terms of political feasibility?

    The possible “conservative-appealing (?)” adjustments are:

    1. Some type of malpractice reform
    2. Support for more competition among providers (including reform of scope-of-practice laws)
    3. Paring back essential health benefits
    4. Permitting more catastrophic plans on exchanges
    5. Eliminating the employer mandate
    6. Replacing the individual mandate with some other inducement (late enrollment penalty?)
    7. More support (in some fashion) for coverage for medical tourism
    8. Allowing inter-state competition among health plans
    9. Permitting all Medicaid eligibles to shop on exchanges (akin to Arkansas’s private option)
    10. Capping and/or more quickly phasing out of the employer-sponsored health insurance tax subsidy
    11. Equalizing tax treatment of all plans and medical savings vehicles, regardless of source or type
    12. Creating high risk pools for sicker individuals without continuous coverage, if only as a transitional measure
    13. Universal, zero- or low-premium catastrophic (akin to Singapore)
    14. Risk rating (or a lot more of it). Note, if only tweaking the age-based constraints on premiums, this is a lot more feasible — move it up to near the top of the list.

    To be clear, my notion of technical feasibility here is the extent of interference/disruption of the existing ACA structure and/or other insurance arrangements (like Medicaid or employer-sponsored coverage). I’ve deliberately ignored Medicare, but one could draw up a list for that program. My read of recent right-of-center thinkers is that structural reform of Medicare has fallen away or taken a back seat. The focus seems to be on how the ACA impacts group and non-group markets for the non-elderly, as well as Medicaid.

    Have at it!

    LATE ADDITIONS: I don’t want to further mess up the numbering, so here are some other ideas from comments: Price transparency (not sure what the specific policy is, but I’d give this a low number on the list because it’s not disruptive to the structure of the ACA at all.)

    @afrakt

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    • As a right-leaning libertarian, I have to say this is a pretty good list. I agree with basically everything. I can’t really speak to the ordering because I don’t really have a sense of how disruptive they’d be.

      My only comments would be on 8 and 9. For 8, I would probably want it to be revenue neutral, and for 9 I’m not sure what equalizing tax treatment would mean for HSAs. I’m not really sure what you mean for 9.

      As for completeness, I’d probably add repeal of the medical loss ratio requirement, but that’s all I can think of.

    • I’d probably put 9 somewhere closer to 4. W/o individual mandate, it’s probably easier to equalize treatment of employer/individual HI. (Is that what you mean in 9?)

      Also, there’s a burgeoning trend in private exchanges where employees get basically a voucher to shop in an HI exchange set up by a consultancy for the employer; unused portion is put into HSA or is lost, but is still tax free. Theoretically, you could allow employees to top-off employer contribution with the same tax advantages.

      • You know what’s missing (but completely not feasible)? Licensing reform.

        Certainly not only a conservative idea, but broadly speaking — fixing scope of practice laws, medical education, residency slots etc.

    • I’d add two items (with suggested ordering):

      #1 Lower the threshold for tax deductible medical expenses from either 10% to the original 7.5% or even 5%

      #2 Allow more health care sharing organizations to form, such as by allowing any c3 in existence since ’99 to start a new one.

      In addition, my own comment on allowing interstate sale of insurance plans – I certainly have no objection to it in principle, but in the age of networks I’m not sure how helpful this is going to be in most parts of the country. Rhode Island is just about the only state where a large number of people (relative to total population) can relatively easily access providers in other states (as I wrote in my paper for a Rhode Island think tank: http://www.rifreedom.org/2013/10/moving-forward-with-health-reform-in-rhode-island/), if they buy a plan based in Connecticut or Massachusetts, and there are some other areas of the country as well – people in northern Delaware may be able to easily get to providers in the Philadelphia area, for example. But for most Americans, I think the lack of access to a network is a substantial barrier to cross-state sales of insurance, and given the expense in setting up a network it’s hard to imagine an insurer in Idaho wanting to set up a viable network in Boston.

    • As much as I agree with the list, completely missing is the single most important reform measure: compulsory publishing of healthcare pricing. I can’t fathom how an economist could possibly countenance a system lacking price signalling.

      A good start would be for someone to publish the complete table of Medicare allowable pricing by CPT code, which I had to file an FOIA to get here in Texas.

      Another essential element missing from the list is releasing infor regarding screwjob that insurance in general, and medical insurance in particular, represents. We know that the return on the insurance premium dollar is way less than 80%, considering the constricted choice of doctors, hospitals and even countries where the insurance dollar could otherwise be spent in self-pay.

      Indeed, once our reamed-out young folks saw that information, they would no doubt opt out of Obamacare altogether and spend their medical care dollars in self-pay in nice places like Prague, Budapest, Rio, Thailand, Costa Rica and Mexico City rather than in Peoria, Illinois. Care in those foreign places is good and cheap, in many cases costing less than the Obamacare deductible and co-pays.

      The most common surgery, cataract, costs $4000 per eye in Austin, TX but only $1400 per eye in Nuevo Laredo or Monterrey, even less in India or Thailand, and only slightly more in Rio or Costa Rica.

      The only thing preventing a death spiral is the hiding of such information, as this list implicitly countenances.

      • I don’t have the data at my fingertips, but I’m confident in asserting that the most common surgery for young people, invincible or not, is NOT cataract surgery.

        If I had to guess, I’d say it would be Caesarean section. And I doubt that most American women want to go to Prague to have their babies.

      • This is a good point. Though you realize that those “cheap” places all believe that they’re paying too much. I think that the NHS and other socialized systems would be a lot more popular in their own countries if they could force their citizens to be insured in the States for a 3 months.

        Taiwan has this problem since their insurance is very, very, good and very, very cheap. Like 4.91% of monthly income by law. So if you make 40,000$ a year, you pay 1,964$ a year. (Less if you’re employed since it’s split with the employer) Since Taiwan citizenship is jus sanguinis, there are a lot of Taiwanese people living in the US who continue to pay their insurance premium in Taiwan and then fly back there every year for dental work and routine medical stuff, because it’s so much cheaper.

        India got into a fight with a drug company over a cancer drug because of this idea. The drug was selling for 5000$ in the States and India was saying that you can sell it in India but for a lot less ~1000$. The company was afraid because they knew that a round trip to India costs about 1500-2000$ and that a patient who spent 2000 dollars on a plane ticket 400 dollars for hotel and doctor visit 1000 dollar on the medicine would still pay less than they would in the US. And they might see the Taj Mahal in the process.

      • Perhaps Americans should have enough faith in foreign medical providers to go wherever the prices (including transportation) are lowest, but I don’t think they do.

        • Of course, you need to add in the costs of travel to those places. For a cataract, you need a second person to go along to stay with you after the procedure and take you back afterwards. You need to determine how long they need to stay there to watch for immediate complications. Finally, you need to include the costs of having people watch after pets at home, robberies while out of the house, etc. For cataracts, you probably end up saving little or no money. (People in their 80s who dont see well have trouble traveling and may need a younger person to go along as well or in place of a spouse, so factor in loss of wages. If they dont have a spouse, you need a plan.)

          Steve

    • 1. This is an issue the state’s need to resolve. Georgia already did. http://blogs.law.harvard.edu/billofhealth/2013/05/14/medical-malpractice-the-affordable-care-act-and-state-provider-shield-laws-more-myth-than-necessity/

      8. Takes place in 2016 when states can join in interstate compacts. Do you mean that you want this to speed up to 2014 or 2015?

      12. What would you like to see other than the high risk pools that were in effect from July 1, 2010 to December 31, 2013?

    • I’m in favor of quite a few of these. I don’t necessarily see them as right-leaning.

    • I can think of 1 more:
      Ending the 3 to 1 age pricing limit.

      • @Floccina: It seems to me that is like ending the prohibition on considering pre-existing conditions. Or ending social security. My assumption is that the young pay more than their actual costs but as those same people age they will pay less than their actual costs. The alternative is for the young to save more money to pay their health insurance costs when they are old. What are the chances of that?

    • Deregulation of the health professions – AKA repeal of scope of practice laws limiting the extent to which physician assistants and nurse practitioners can practice without the supervision of a physician. In a pure conservative free market view, if physicians are better trained and provide superior care, this should be reflected in their being able to command higher reimbursement, but the government should not artificially restrict markets by forcing PAs and NPs to work under physician supervision. For that matter, why require any professional training at all, why not just let practitioners invent their own credentials (as Sen. Rand Paul apparently did)? The structure of health professions licensing developed in response to the charlatans of the 19th century, but apparently some in the conservative movement would like to relive that experience.

    • I’d like to add pricing equity to pricing transparency. IMHO, it’s immoral to charge some people far more than others for the same service.

      Further, it complicates the murky finances of providers and, since no one willingly pays more for a good or service than they need to, suggests that providers take advantage of patients’ vulnerability.

    • Wouldn’t federal efforts at malpractice reform represent a transfer of power from states to the federal government? Malpractice cases take place in state courts. How is this a “conservative” idea?

      Also, haven’t many states already taken on tort reform through limits on payments? Have these reforms resulted in changes in medical practice?

    • Conservatives who favor market solutions would not likely support elimination of the individual mandate, at least not without a similarly coercive alternative, as it would undermine the market-oriented structure of the exchanges overall. No mandate, not enough young healthy people, higher premiums for the rest. That said, the mandate is unfortunately being framed more as a price tag to opt out than a penalty for not opting in. Getting health coverage must come to be seen as a societal norm in order to safeguard against adverse selection. The mandate should be conceived of as a punishment for breaking that norm. This is more messaging than technical, but it is nonetheless conservative to the extent it will bolster the exchange markets.

      • Ben, you’re right. Or, maybe more accurately, you would have been right a decade ago. The mandate, after all, was a Heritage Foundation idea, but it was labeled “personal responsibility.” Legislative efforts to impose a mandate all came from the right and were sponsored by Bob Dole and other Republican party leaders. But that was a different time.

        • True, Sheldon. I was referring more to ideological viewpoint than party affiliation. Today, any Republican who supported the individual mandate would be ostracized as a RINO for precisely the same reason Bob Dole and other Republicans supported it in the past: it is central to making the system function. The mandate releases the cost-reducing power of the exchange market; it is the keystone of the free-market solution. In that vein, it is an element of the law that conservatives – though not necessarily Republicans – should like.

    • One other reform I’d add that probably is towards the middle in terms of technical feasibility and towards the top in terms of political feasibility is an expansion of the limits on hospital ‘chargemaster’ billing practices contained in Section 9007 of Obamacare.

      For those of you that don’t follow the issue, hospitals typically gouge the uninsured with wildly inflated hospital bills because of the bizarre billing and pricing practices that have been created as a result of third-party payment for most hospital care. Obamacare helps to correct this, but still leaves a lot of gaps. I actually wrote this up today, see: http://theselfpaypatient.com/2013/11/22/obamacare-delivers-some-good-news-for-self-pay-patients/

      There are some limits to any fix in this area – I’m no fan of price controls. But there’s probably sufficient leverage and legal justification to having the federal government do something more in this area, perhaps requiring that non-profits not charge the uninsured or any out-of-network patient more than, say, 125% of their highest contracted rate, or double their average (weighted) negotiated rate. And states and localities should certainly get involved in a similar fashion with public hospitals.

    • Medical tourism is a great concept, and Sean’s push to limit chargemaster billing is great also.

      Both campaigns would require a straight on confrontation with the American hospital industry. Obama certainly had no desire to confront them, and I have not seen too many Republicans have a desire either.

      Some of this is a craven desire for contributions, of course, but there is also the fact that hospitals are the largest employer in a shocking number of cities.

    • 1. Texas enacted malpractice reform. Good for malpractice insurance. Minimal reduction in premiums.

      2. Let’s give the transparency rules on exchange a chance. We have to find a way for an entire nation to access healthcare. Really have to question how to do that when shareholders come first. Let’s look at the cost of our medicine first. Why does healthcare cost so much more in this country. Why can’t Medicare negotiate drug prices. All this “competition talk” is bogus.

      3. No. We’ve had enough of being under-insured.

      4. Catastrophic plans are for the healthy savvy enough to know how to leverage health for financial gain. Not for the general public.

      5. Bad idea. Risk pools.

      6. Why? because the Republicans loved the individual mandate and now they don’t. No. The mandate is fine.

      7. Why? Because our system is so inaccessible we have to find a way to get some of our people out of the country for care?

      8.With minimum standards? The healthcare law does that now. Otherwise one state could set a new national low standard.

      9. And pay MORE for care. Administrative costs extremely low with Medicaid. No. Not smart if we’re looking to be conservative with $

      10.Capping and/or more quickly phasing out of the employer-sponsored health insurance tax subsidy. OK. I’ll listen to this debate.

      11. I’ll listen.

      12. OMG….pick a wrist… Please…should we also have a special fenced-in area for them. You’re makin’ me crazy. Why don’t we just have one huge risk pool then. Keep it simple. SIngle-payer.

      13. And mandatory savings accounts in SIngapore. No? MANDATORY. Americans don’t have the stomach for it. Americans won’t be told they must fund an HSA — by law. We’ll all be running around with unfunded HSAs and end up where we were pre-ACA.