Sometimes life offers a second chance. For Obamacare, that second chance is now.
We'll soon find out if the Affordable Care Act is able to deliver near universal health coverage at an affordable price – the promise made in 2010. President Joe Biden has resumed listing and an immediate review of all Policies in place to prevent logins. It is resetting the work requirements Medicaid began under the previous administration and giving the 12 laggards new incentives to expand their programs.
The administration's aid package COVID-19 includes more generous subsidies for the purchase of individual plans. It eliminates premiums for those earning less than 150% of poverty and lowers the premiums for those earning up to 400%. In a new twist, they are capped at 8.79% of income for everyone. The legislation also provides for new subsidies to help people stick to their employer plans if they are laid off during the pandemic.
The success of these initiatives depends heavily on success. Healthcare and the business world want Obamacare to be successful. They see it as the best way to support the 30 million uninsured people in the country.
Their overall goal is to keep what we have now: a fragmented health insurance system with variable prices and three levels of coverage (one for the elderly, one for the poor, and one for the privately insured) and multiple options at each level. This unnecessarily complex and fragmented system provides different coverage for the same individual at different stages of life, while perversely similarly located individuals offer different coverage at each stage of life.
When pressed, Americans seem to prefer it. A poll by the Pew Research Center published last fall found that 26% of Americans support a mixed state and private insurance system. Add in the 30% who just want the government to deliver Medicare and Medicaid and the 6% who want no government involvement in health care at all, and the single-payer constituency outnumber those who support Medicare for All , by far.
The Congressional Budget Bureau says expanding Obamacare subsidies by 2023 will cost $ 54 billion in 10-year costs and add only 2.5 million more people to the ranks of those insured. This does not bring the US anywhere near universal coverage.
Nor will it address the public's main problem, which is the high cost of premiums and co-payments in their private insurance plans. These have increased by 4% to 5% each year, while wages and salaries are only increasing by an average of 2%. This is a recipe for constant disenchantment and supports more radical solutions.
The only way to make health insurance affordable is to reduce the overall cost of care. To do this, the prices of drugs, hospitals and doctors must be controlled and insurers' profits and overheads strictly limited.
Needless to say, Congress is unlikely to act decisively on either of these fronts in the near future. Hence, we can expect continued battles over Medicare for All, the public option, or, with a further turn in the political pendulum, conservative alternatives such as thin, highly deductible or short-term plans.
Unless. The only way to avoid these struggles and achieve near-universal enrollment is to make Obamacare plans – and all employer-based plans – truly affordable for individuals and families. How? Make the new subsidies in the auxiliary bill permanent and far more generous.
Congress must set a permanent limit on the amount each person must pay out of pocket in rewards and co-payments. It should be set at a fixed percentage of total income and fall to zero when people are unemployed or have low-wage jobs. Legislators should apply the same rule to employer-related plans.
Expensive? At the front end, yes. Congress will then have a strong incentive to end this nation's cost crisis by bringing all actors into one room to work out a new, value-based reimbursement system. Let's stop the patient paying for market failures.