A challenge on health reform

A challenge on health reform

March 8th, 2011 in Opinion Times

President Obama's proposal to let state governments begin opting out of the Patient Protection and Affordable Care Act under certain conditions in 2014, the year the health care reform act is to be fully implemented, may have surprised leaders of both parties, but it has obvious merit.

For starters, it would call Republicans' hands: They would finally be on the spot to meet the "replace" part of their professed desire to "repeal and replace" the reform act. They have talked endlessly about what they don't like about the Affordable Care Act and have harshly condemned it, but they've said nothing about what they would replace it with that would be as good. Adoption of legislation to accept this proposal - which would require support from their large majority in the House - would give Republicans the chance to show Americans a better way to make the reforms that they say they know are needed.

Democrats who wanted a more comprehensive reform act - specifically, a truly nonprofit "public option" plan, akin to a Medicare-for-all plan based on a voluntary premium fee or tax - would have a chance to devise such a plan in states, like Vermont, where there is strong support for a public option.

A state could take advantage of the president's early opt-out offer, however, only if the state option plan met basic criteria for providing comprehensive coverage to all citizens above Medicaid populations, with a standard benefit package, and affordability of premiums at least equal to those to be extended the federal Affordable Care Act, or ACA, when it is fully implement in 2014. That date is three years earlier than the 2017 date set under the ACA for state opt-out options to be considered.

This big "if" in the president's proposal would form the starting point for states to devise an opt-out plan if it were to be adopted.

There is considerable logic to the proposal. Republicans have been going around the country for a year saying that while there is a clear need for health care reform, the Democrats' plan, as spelled out under the ACA, isn't the best way to achieve reform. Most Republicans say they agree with the early benefits of the ACA, such as an end to exclusions for pre-existing conditions, extension of family coverage for young adults to age 26, a start on closing the "doughnut" hole in coverage for seniors prescription drugs, and bans on annual coverage limits and recision of insurance when a covered person becomes ill.

Yet many Republicans strongly oppose the mandate requiring eligible people to purchase coverage under the state-regulated insurance exchanges that are to be established by each state, never mind the generous federal income-adjusted ACA subsidies that would make quality insurance affordable for all working families. They also dispute the Congressional Budget Office's finding that the ACA would cost less over 10 years than the present status-quo system, which leaves 50 million Americans uninsured and uncovered, and many millions more under-insured.

Health care economists and most serious analysts correctly emphasize that in lieu of a national health care tax (similar to that for Medicare and Social Security), health care reform and near-universal coverage cannot be established without a mandate for individuals to purchase insurance. Otherwise, too many presently healthy people would avoid purchasing insurance until they became ill or needed medical care for an accident or a family member.

Near-universal care does, in fact, require a broad insurance pool to make it affordable. The private insurance industry makes that impossible because it cherry-picks the healthy, excludes people with chronic conditions and shifts too much over-priced premium income to profit rather than health care coverage. That leads health care providers to jack up their charges to cover the cost for uncompensated care, and government to pay for public-care costs.

If Republicans have a better idea for financing near-universal health care and sufficient benefits and coverage, the early opt-out provision would give them a chance to formulate a better plan to take effect by 2014. If they can produce a better plan, that's wonderful. If they can't, voters should know that, too. Voters would also get to know how a voluntary public-option plan would work.

Predictably, Republicans don't want to consider the president's offer, probably because it calls their bluff. That's too bad. If they have a better idea for reforming a health care system that has become unaffordable and leaves more than 50 million Americans without insurance, they should be happy to share it.