July 31, 2018

Taking Action to Improve Health Care


KEY TAKEAWAYS

  • This week, a new study found federal spending would have to increase by 50 percent to fund the Democratic “Medicare for All” single-payer health care system.
  • Insurers continue to leave the Obamacare exchanges, with 8 states down to only one insurer this year and big premium increases expected again in 2019.
  • The Trump administration has taken recent actions to provide relief from Obamacare, including efforts to bring down drug prices, promote short-term and association health plans and increase competition.  

Financing a single-payer health care system would increase federal spending by 50 percent, according to a new study by the Mercatus Center. As Obamacare has shown, increased government control of health care drives up cost and reduces access. In 2019, Americans reliant on the Obamacare exchanges will see their premiums rise again by an average of 15 percent. While Democrats push for a dramatic expansion of government, Republicans are taking action to provide affordable alternatives and loosen the grip Washington has on Americans’ health care.

Premiums Soared Over Obamacare’s First Three Years (2014-2016)

Premiums Up

Since Obamacare went into effect in 2014, it has priced many Americans out of coverage and greatly reduced their access to care. Across the country, insurers continue to leave the broken individual market. In Mississippi, the number of insurers offering coverage on the state exchange dropped from five in 2013 to one in 2018. This year, eight states have just one insurer on their exchanges: Alaska; Delaware; Iowa; Mississippi; Nebraska, Oklahoma, South Carolina; and Wyoming.

medicare for all driving up costs, reducing access

A national single-payer health care system would increase spending even more. Federal spending is projected to be at $65.6 trillion from 2022 to 2031. To pay for the Democrats’ program over those 10 years, federal spending would have to increase by an additional $32.6 trillion

The program would have severe economic consequences. According to the Mercatus Center, doubling both the corporate and individual tax rates would still not cover the total cost the program. Americans’ access to care will undoubtedly decline as well, with doctors seeing steep payment cuts.  

Steep Cost for Medicare for All

Medicare for All

executive actions to improve health care

While Democrats move to double down on the broken promises of government-run health care, the Trump administration is acting to curtail Washington’s reach. Most recently, the administration has issued rules that will provide alternatives to the unaffordable coverage on the Obamacare exchanges.   

  • Association Health Plans: On June 19, the administration released a final rule allowing small businesses to band together to form larger insurance pools so they can get better rates and more options.
  • Short-Term Limited Duration Plans: The administration is expected to issue final rules on short-term limited duration plans in early August. The plans will be extended to 12 months of coverage, up from the three-month restriction the Obama administration imposed. Because these plans do not have to comply with the essential health benefits requirement of Obamacare-compliant plans, they will offer Americans an affordable alternative.
  • Health Reimbursement Accounts: Later this year, the administration will issue new rules for health reimbursement arrangements. Employers use these plans to reimburse employees for out-of-pocket medical expenses. HRAs are tax-free, and they can be tailored to meet the unique needs of each employer.
  • Choice and Competition Study: Also expected by the end of the year is a report on federal and state laws and regulations that impede competition and choice in health care. It will be a joint project of the Departments of Health and Human Services, Treasury, and Labor, along with the Federal Trade Commission.

Beyond reforms to the individual market, the administration is looking at government-sponsored health care programs. It has proposed significant new rules in the past month to reduce costs and improve patient care in Medicare. 

  • Hospital Outpatient: CMS issued a proposed rule last week to reduce the payment differences among Medicare service sites – including payments for outpatient drugs to certain 340B entities and clinic visits – and increase cost transparency for patients.
  • Home Health: The administration issued a proposed rule to reduce the administrative burden Obamacare inflicted on home health care providers, ensuring they have more time to spend on patient care. The rule updates payment policies, rates, and quality programs.

empowering consumers

Republicans remain focused on protecting Americans by increasing choice in the market. The Senate HELP Committee has been holding a series of hearings on ways to address health costs and spur innovation in the health care system.

The House has passed legislation to expand access to health savings accounts. Under this law, Americans who rely on the Obamacare exchanges and working seniors enrolled in Medicare Part A will be able to contribute to an HSA. The House also passed legislation allowing HSAs to be used to pay for over-the-counter medical products, as well as provider fees in direct primary care arrangements.

Issue Tag: Health Care