Let’s explore two remaining presidential candidates' positions
on and visions for health care reform.
By Tom Torre | July 06, 2020 at 10:23 AM
The U.S. health care system is broken. Over
the years, the system has become very expensive and difficult for individuals
to navigate; in fact, more than 27 million people in the U.S. are without
any type of health insurance. For these individuals, the cost of care alone can
exceed their financial resources – putting many at risk if they should become
ill.
The basic employer driven health care benefit
system that we live in today is a legacy of World War II–and for the first 60
years, it worked well. The majority of health care costs were covered by the
health plans, premiums were largely paid by employers, and low copays and
deductibles were manageable for most. However, over the past 20 years, the cost
of health care has gone up significantly with increasing premiums, deductibles
and out-of-pocket costs.
There are a few reasons for this increase, the
first being the consolidation of health care providers–which
has had a dramatic impact on communities across the country (especially those
in less populated areas). With limited or no health care options, providers can
drive up health care costs on the supply side.
The second reason for increased health care
costs is the fact that the pharmaceutical industry is essentially not cost
regulated in the U.S. Therefore, prescription costs are high and continue to
grow year over year.
The third reason is that, for individuals who
obtain health insurance through their employer, the higher health care costs
are increasingly being moved from the employer to the individual through high deductibles, out-of-pocket expenses, shifting
of premiums and surprise billing from non-covered health care
events. This is particularly impactful because the system is not built for
individuals to effectively manage the resulting financial burden.
Just as there are different reasons for the
increasing cost of health care, there are also a range of approaches to address
and fix our health care system. There is reasonable, bipartisan consensus that
changes should be made to ensure that individuals have access to affordable
health care. With the passage of Obamacare in 2010, Donald Trump’s “Trumpcare”
Executive order in 2017, and Bernie Sanders’ call for “Medicare for All” during
the 2019 democratic primary – the nation’s health care system has become the
cornerstone of political debates and legislation. In fact, a recent Kaiser Family Foundation poll found that health care
is among the top issues for undecided voters in the 2020 presidential election.
Each candidate has a different approach to
addressing voters’ concerns in regard to health care, so let’s explore the
position of the two remaining presidential candidates.
Democratic nominee:
Joe Biden
Joe Biden was Vice President when the
Affordable Care Act (ACA) was enacted and remains a strong supporter. So
overall, I predict that we will not see a directional change in his approach to
health care now that he is the democratic nominee.
However, from what we’ve seen during his
primary campaign he may differentiate his approach in certain areas. Here are
the key changes that Biden’s campaign has focused on:
·
In addition to the
current private health plan options, offer a public health plan option similar
to Medicare.
·
Expand coverage to
low-income Americans, increase the value of tax credits to lower premiums, and
extend coverage to more working Americans.
·
Take steps to
eliminate surprise bills.
·
Address the market
concentration that has occurred across the health care practices and work with
the industry to improve health outcomes and lower costs.
·
Work to control
increases in drug prices by making the pharmaceutical industry negotiate with
Medicare on prices, control pricing for new drugs with no competition, allow
people to purchase drugs from other countries, implement price increase limits,
and increase the supply of quality generic drugs.
The general theme to Biden’s plan for health
care is to increase access, drop costs and make health care more affordable
within its current framework. Biden’s plan specifically focuses on addressing
supply-side challenges by controlling prescription drug costs and taking steps
to negate the cost impact that has come from industry consolidation. He also
touches on a very hot topic–surprise medical bills–which is an increasing
challenge to consumers as a high number of in-network medical facilities
provide out-of-network services, resulting in large bills to consumers.
Republican nominee:
President Donald Trump
As of this writing, a specific health care
reform plan has not been put forth by the current administration. However, the
recently published 2021 fiscal budget does provide guidance on the
general direction that the administration would like to push health care. Some
key points that this document speak to are lowering drug costs, ending surprise
medical bills, protecting individuals with pre-existing conditions, reducing
regulations, improving the transparency of health care costs, and increasing
competition.
To better understand the direction of the
administration and the Republican Party, it is instructive to look at the work
done by the Republican
Study Committee – a caucus of conservative members in the
U.S. House of Representatives – on health care reform. Their work covers a
broad range of items, including:
·
Not allowing insurance
carriers to rescind, increase rates, or refuse to renew a person’s health
insurance if they should develop an illness after enrollment.
·
Eliminating the ACA’s
essential health benefits, annual lifetime limits, preventive care with no
cost-sharing, dependent coverage, and metal actuarial tiers (bronze, silver
etc.) and allowing states to prescribe these principles.
·
Restructuring the
ACA’s premium subsidies and Medicaid expansion federal matching programs to
fund state-administered grants to subsidize health insurance.
·
Changing the tax code
to provide for equal treatment of employer and individual health insurance
markets.
·
Expanding the use of
pre-tax Health Savings Accounts (HSA), including using them to pay for
insurance premiums. Increasing allowable yearly contributions from $3,500 to
$9,000 for individuals and from $7,000 to $18,000 for families.
·
Extending portability
protections (contained in the 1996 Health Insurance Portability and
Accountability Act for employer-sponsored health insurance) to the individual
market.
·
Promoting the use of
innovative health care solutions such as telemedicine, direct primary care,
association health plans, and health sharing ministries.
Overall, this approach can be loosely
summarized as a plan to make changes to the tax code that impact the
affordability of health care, handing more control of Medicare spending to the
states, reducing regulation, and promoting innovative approaches to delivering
health care–all which leaves the current system largely intact. While the above
is not Donald Trump’s plan, it is reasonable to believe that some of these
components will be reflected in his approach to health care reform as we head
into the election season.
With November approaching, I anticipate the
conversation around health care and health care reform to be widely discussed
by both presidential candidates. Our health care system was broken prior to
March 2020, and the current COVID-19 pandemic has put an enormous amount of
strain on an already shaky system. It is imperative for our leaders to look at
every possible solution to help ensure the wellness of every American – not
just health-wise, but financially as well.
Tom Torre is CEO of Bend, which
specializes in providing health savings accounts for individuals, employers and
partners.
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