MHPC Opposes House Plan to Reform the Affordable Care Act

March 9, 2017 Posted by Matthew Gagnon - No Comments

After years of rapid growth in premiums and deductibles, unstable insurance markets, and skyrocketing costs caused by the Affordable Care Act’s burdensome mandates, lawmakers should be advocating for true free-market reforms to federal healthcare policy–reforms that encourage competition, give patients more choices, and empower states to enact creative solutions to healthcare problems.

Washington politicians and bureaucrats are viewing healthcare reform from the wrong perspective. Instead of looking at the system as it currently exists and attempting to tinker at the margins, they should be going back to the drawing board.

Lawmakers must first ask themselves what outcomes they wish to achieve in the healthcare market, and then design a system that seeks to attain those outcomes. The American people have been telling them for years what they want — lower costs and more choice — and that is what their representatives in government should be giving them.

Unfortunately, the recently released Republican proposal to reform the Affordable Care Act falls far short of these goals. Not only does the House republican plan fail to address the worst parts of the Affordable Care Act, it actually reinforces and strengthens most if its core elements.

Instead of restoring patient-centered, market-driven principles to our healthcare system, it gives permanent life to the expansion of Medicaid, it fails to repeal most of the costly mandates and insurance regulations driving up premiums and deductibles, and it replaces the Affordable Care Act’s subsidy scheme with a new costly federal entitlement in the form of a refundable tax credit. Worse, it does not repeal most of the regulations that have helped drive up the cost of insurance nationwide.

Additionally, it does nothing to address exploding costs to the federal budget. At a time when the United States faces an unprecedented debt crisis, policymakers should be reducing federal spending. Instead, the plan proposed by congressional republicans and supported by the White House would:

  • Authorize massive new entitlement spending through refundable tax credits
  • Allow states that have expanded Medicaid to retain the higher federal match, driving up federal spending
  • Provide for an additional $10 billion to be distributed among states that have not expanded Medicaid.
  • Create a program to give billions of dollars to insurance companies.
  • Maintain the premium subsidies created by the Affordable Care Act.
  • Fail to repeal age-rating regulations that limit states’ flexibility.

 

Under current law, Medicaid spending is expected to reach $835 billion in 2023, compared to $529 billion in 2015. To avoid such unsustainable cost growth, the Affordable Care Act’s Medicaid expansion should be completely repealed and Medicaid priorities should be refocused on America’s most vulnerable citizens, not able-bodied adults.

Despite these concerns, the plan contains several promising initiatives which should be built on as the draft is revised and modified. The expansion of Health Savings Accounts (HSAs) to allow patients to set aside more tax-free for health care expenses, the elimination of federally-imposed Essential Health Benefits requirements, and the repeal of more than a dozen Obamacare taxes would have beneficial effects on insurance markets and health care costs.

But make no mistake, despite those positive steps, this remains an unacceptable path forward. If passed, it would preserve the same flawed system that has needlessly complicated and driven up the costs American healthcare for years.

The Maine Heritage Policy Center has consistently advocated for free-market policies in Maine, and we believe that any attempt by the federal government to reform healthcare must address out of control costs and declining quality. The healthcare system as it exists today is built on a lack of transparency and an opaque healthcare market. Increased mandates, regulations, taxes, fees and meddling by a heavy handed government only makes these problems worse.

We believe in patient focused solutions that cut out the drivers of high cost, such as the promotion and expansion of what is known as direct primary care, which will shatter the insurance bureaucracy. We believe in enacting right-to-shop, both in Maine and nationally, to reward price-conscious consumers. And we believe in repealing the harmful Certificate of Need program, which does nothing but drive up prices and harm patients’ ability to make better health care decisions.

We urge lawmakers in Congress to approach health reform with a similar focus on competition, patient empowerment, and free enterprise.