A Better Way to Healthcare Reform

Posted: Jul 19, 2017 11:38 AM

This is no time to give up on repealing and replacing the Affordable Care Act (ACA), better known as Obamacare, but it is a time to dramatically alter the approach and try again.

On July 11th, I sent a letter to Speaker of the House Paul Ryan and Senate Majority Leader Mitch McConnell suggesting that Republicans revisit our approach to the ACA and break the effort into three separate initiatives. The first, under the budget reconciliation process, would limit changes to Medicaid to only the ACA-created Medicaid Expansion program and apply any savings as an offset for the taxes and penalties that impact working and middle class families. The second bill, also under budget reconciliation, would move all other ACA-related taxes out of the healthcare debate and into the pending tax reform bill. Finally, the third would address the failing health insurance exchanges where individuals not eligible for Medicaid and who do not have employer provided health insurance now go for coverage. This part should be negotiated in a bipartisan manner outside of the filibuster-proof budget reconciliation process.

Medicaid expansion: As noted above, the traditional Medicaid program is a shared responsibility with costs divided about evenly between the federal government and the states. Under the ACA, the Medicaid expansion program has the federal government’s share starting at 100% and phasing down to 90% by 2020. It makes no sense to me that the federal government would favor able-bodied adults over all other Medicaid recipients, such as disabled children, whose costs are reimbursed at 50% by the federal government.

The ACA’s Medicaid expansion needs to revert to the standard Medicaid cost share that the states receive for all other Medicaid enrollees. This could be done by phasing it into effect by allowing all Medicaid expansion enrollees up to January 2020 to remain at the 90/10 split indefinitely while all new enrollees from January 2020 are at the standard reimbursement rate for each respective state (50% in Colorado).  The abled-bodied Medicaid Expansion enrollees are ideal candidates for Republican reform efforts such as capitated reimbursement rates and block grants to move the program away from being an archaic fee for service model to achieve better outcomes at lower cost.

Tax reform: There are 21 taxes and penalties in the ACA, many of which have nothing to do with healthcare. The ACA taxes on higher income Americans, such as the 3.8% surtax on net investment income, are better addressed in the impending tax reform bill, not during the healthcare debate.

A Cabinency of Dunces
Victor Davis Hanson

Health insurance reform: The ACA promised lower health insurance rates but we all know that never materialized. Now the healthcare exchanges, created under the ACA, are failing as health insurance carriers are losing money on the plans offered through the exchanges — with more and more of them dropping out of the program. When there are no carriers willing to provide policies for a certain state or region serviced by an exchange, the program collapses and consumers lose the ability to buy income-adjusted subsidized policies. I believe this is an area where Republicans and Democrats can come together to find a bipartisan solution that works to lower health insurance costs while maintaining consumer protections such as preexisting conditions.

Right now we in Congress have a bipartisan opportunity to “fix” the many problems Americans have in obtaining access to affordable healthcare and to responsibly address the unsustainable cost of the ACA’s Medicaid Expansion.