Take Another Run at It (Gwen Moritz Editor's Note)

by Gwen Moritz  on Monday, Aug. 7, 2017 12:00 am   3 min read

It is a truth universally acknowledged (as Jane Austen would say) that the thing congressional Republicans spent seven years promising to do just as soon as they had the chance still is not done. And the reason it isn’t done (acceptance of this truth being near-universal) is because they didn’t actually have a plan to address the problems that Obamacare failed to correct without making the situation worse for tens of millions of Americans.

There certainly was never a plan that would do what Candidate Trump promised, which was better health care for everyone at a fraction of the cost.

That’s why three Republican senators, including the one Trump doesn’t like because he got captured that time, joined all 48 Democratic senators in rejecting the so-called “skinny repeal” of the Affordable Care Act. It was a dramatic evening at the Capitol as John McCain turned his thumb down on a bill that had the support of 1 in 8 Americans.

So what comes next? The president’s preference is to blame Democrats and punish the American people by hastening the collapse of the insurance markets by withholding subsidies from the insurance companies that are already spooked by the sheer political chaos.

Senate Majority Leader Mitch McConnell blamed his own party for failing to enact a bill that even senators who voted for it insisted should never become law. He’s talking about taking another run at replacing Obamacare, but he mainly seems more interested in moving on to the fun stuff: cutting taxes.

But it seems there actually is some brainpower being applied to the problem of making health insurance affordable for all Americans without surrendering to single-payer. And it isn’t all coming from the people who were elected to address the issue. Consider an article by Ed Dolan, a senior fellow at the Libertarian think tank Niskanen Center, that was published last week on the website of The American Conservative.

The article is cleverly titled “How the GOP Can Win on Healthcare,” since getting a political win is clearly all that matters to President Trump. This winning formula, Dolan says, is actually an idea that Republicans have been kicking around since the 1970s called “universal catastrophic coverage.” It’s a more detailed, thought-through version of the general idea that I’ve mentioned in this space several times since 2009.

While Dolan is the author of the article in The American Conservative, the plan was actually outlined by a California venture capitalist, Kip Hagopian, and an expert in health care economics from the University of Southern California, Dana Goldman. Their detailed proposal appears in the Summer 2017 issue of National Affairs.

Dolan makes clear that UCC is not the same as stripped-down private “catastrophic” policies. It would be paid for by taxpayers, but it might be either government-run or sold by private insurers, “subject to clear standards for pricing and coverage.” It would not replace Medicaid for the poorest, but it “would offer protection from those relatively rare but ruinous healthcare expenses that are truly unaffordable.”

Not being any kind of expert on insurance or public policy, I had previously assumed that a universal catastrophic insurance plan would impose a uniform, and very high, deductible on everyone. That would obviously be more of a burden on some than on others and might benefit providers and the patients’ other creditors more than the patients themselves. But Hagopian and Goldman propose a scalable deductible depending on household income.

“The exact parameters would be subject to negotiation,” Dolan wrote, “but to use some simplified numbers, the deductible might be set equal to 10 percent of the amount by which a household’s income exceeds the Medicaid eligibility level, now about $40,000 for a family of four. Under that formula, a middle-class family earning $85,000 a year would face a deductible of $4,500 per family member, perhaps capped at twice that amount for households of more than two people. Following the same formula, the deductible for a household with $1 million of income would be $96,000.”

Families who can afford it would be able to buy supplemental private insurance to hedge against that deductible. “The premiums for such supplemental coverage would be far lower than policies now sold on the ACA exchanges, since the UCC policy would set a ceiling on claims for which the insurer would be responsible,” Dolan wrote. “If the supplemental policies included modest deductibles or co-pays of their own, they would be more affordable still.”

Conservative ideologues may object to a big-government solution. Liberal ideologues may still prefer a single-payer Medicare-for-all model. Not being ideological about much of anything, I’m just looking for something that works.

Gwen Moritz is editor of Arkansas Business. Email her at GMoritz@ABPG.com.



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