Robert Creamer's picture
Robert Creamer

A Real Plan to Make the Affordable Care Act Even Better

Republican fantasies about "repealing and replacing" the Affordable Care Act (ACA) are crashing on the rocks of two-to-one public opposition, and a tidal wave of ordinary people who are demanding their Members of Congress vote NO.

So what about a real plan to make the ACA even better? What about a plan to provide even more access to health care and make premiums more affordable – especially for working people — rather than the GOP plan to take health care away from millions?

The Affordable Care Act has massively increased coverage at much more affordable prices for many, many Americans. What’s more, it has prevented insurance companies from discriminating against people with pre-existing conditions, installed many consumer protections for consumers and helped lower the rate of health care inflation. Most importantly, it established that in a civilized society, health care is not a commodity to be bought and sold, but a right.

The ACA was a major step in the right direction. And in many respects, the United States has a spectacular health care delivery system. But in others we still have a great deal of room to improve.

Let’s start by remembering that health care costs per capita in the United States remain the highest of any industrial nation, even though our health care outcomes remain well below the best performing nations in the world.

The ACA has indeed improved outcomes for many, many Americans. And it has bent the cost curve. Health care cost inflation is much lower today than it was in the pre-ObamaCare era to which the GOP seeks to return.

The last way to "improve" the health care system is to repeal the ACA and return to the bad old days before health care was considered a human right in the United States. The same obviously goes for partial repeal proposals like the House or Senate TrumpCare repeal and replace bills.

In fact, to the extent the ACA could be improved it’s because it doesn’t provide enough of a good thing.

There are three major factors driving health care costs in the United States. First are payment systems that incentivize the numbers of procedures that are performed rather than the outcomes they produce. Second are the costs of prescription drugs – which are much higher than they are in the rest of the world. Finally are the excessive costs of administration, marketing and profit that are associated with private insurance companies. Remember, Medicare’s administrative cost is a fraction of the combined costs of profits, administration and marketing for private insurance companies.

The best way to improve the health insurance system in America and simultaneously cut costs would be to follow the lead of most other industrial countries and set up a single payer system for everyone like the Medicare system that covers senior citizens in the U.S. today.

Such a system would not only assure that everyone has health care, it would also allow the purchasing power of the single payer to negotiate with drug companies for much lower prices, eliminate massive amounts of insurance company bureaucracy and allow for new systems of provider payments that would incentivize results rather than the number of procedures that can be billed out to insurance.

A single payer system would without doubt be the best way to finance health care in the United States. Regardless of what is done with health insurance today, the odds are good that one day the U.S. will ultimately have a single payer system.

Short of a single payer system, there are, however, three specific policies that would greatly improve the availability and affordability of health insurance.

The current ACA system has three major shortcomings.

  • First, some especially hard to serve markets have only one – or in some cases potentially fewer – insurance plans offered on their ACA Exchange. That leaves consumers captive and defeats to purpose of the Exchanges. Of course a big part of this problem results from intentional policies of the Trump Administration that are intended to sabotage the ACA. Many of the companies who have exited these markets have done so because of uncertainty whether Trump would fund the subsidies provided by the ACA.

  • Second, the ACA left in place policies that allow the pharmaceutical industry to charge U.S. consumers much more than they charge consumers abroad.
  • Third, subsidies for insurance plans stop at income levels that still make individual or family policies purchased on the Exchanges unaffordable to many working families.

These two problems could be effectively addressed by three progressive policies that are all very politically popular:

1) Increase substantially the income levels at which working people can receive subsidies on the Exchanges. The dollars needed to finance these subsidies should come from additional taxes on the wealthy, health insurance companies and especially the giant pharmaceutical companies.

Remember that the pharmaceutical companies have made record profits by gouging U.S. consumers substantially more than they can charge consumers in other countries. That is especially due to the limits on re-importation of pharmaceuticals and the fact that Medicare is prevented by law from negotiating with pharmaceutical companies for cheaper drug prices. So a pharmaceutical company tax is a fair source of revenue for increased subsidies for working people.

Recall, by the way, that when the Medicare Part D plan was passed that outrageous provision banning negotiation was itself negotiated by Republican Energy and Commerce Committee Chair Bill Tauzin who then promptly left Congress to make millions of dollars as head of the Pharmaceutical Research and Manufacturers of America.

2) Repeal the prohibition against Medicare negotiating with the drug companies for lower prices and require that they provide pharmaceuticals to consumers on the Exchanges at the Medicare negotiated rate. In addition, allow re-importation of pharmaceuticals from suppliers in other countries who can obtain drugs at prices below which these companies sell to U.S. consumers.

3) Set up a public insurance option offered nationwide that can compete in every market in America. A public option, like Medicare, would have low administrative and marketing costs and major market clout, and would provide an affordable insurance option whenever private carriers abandoned insurance markets. In addition, competition from a public insurance option would force down private insurance costs.

A public insurance option is pretty much a no-brainer. It was passed by the House of Representatives when the ACA was on the way to becoming law, but ultimately dropped by the Senate as a result of a massive insurance industry lobbying and the work of the former "Senator from Health Insurance" Joe Lieberman.

Together, increased subsidies for working people, a public insurance option and lower pharmaceutical prices would solve most of the shortcomings of the current Affordable Care Act.

They work as policy – unlike GOP proposals like health savings accounts that mainly benefit the wealthy. And they are also very popular politically. They represent the high political ground.

Once ordinary people have administered the coup de grace to GOP proposals to "repeal and replace" ObamaCare, Democrats should forcefully advocate these three policies to make ObamaCare even better.

And they should dare the Republicans to pass these proposals that would actually address the issues people care about – increasing the availability and affordability of health insurance coverage – rather than taking health care away from millions of their fellow Americans.

Robert Creamer is a long-time political organizer and strategist, and author of the book: Stand Up Straight: How Progressives Can Win, available on Amazon.com http://amazon.com/. He is a partner in Democracy Partners. Follow him on Twitter @rbcreamer.

Robert Creamer
[email protected]
847-910-0363 <(847)%20910-0363>

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