How ought we modify the ACA to improve it?

I think it would be instructive to launch a discussion about how best to repair the ACA (aka Obamacare).  I suggest the following would be useful changes that would be broadly accepted:

1) Permanently remove the employer mandate:  I think most economists think this is bad policy, and probably has a significant influence on restricting job growth and increasing the incentives to shift to part-time workers

2) Permanently remove the individual mandate:  The notion that the individual mandate is ‘required’ is, I think overblown.  If the law were changed to implement eligibility rules that require advance purchase (e.g., must buy insurance by 12/1 of the prior year to get coverage, or be continuously insured the change insurers), that would mitigate the tendency of folks not buying insurance until they are sick

3) Keep the exchanges and community rating, BUT:  relax the 3:1 rate variance (old to young ratio) and allow true rating by age and geography.  Also, erase the requirements that minimum insurance is 60% actuarial value.  Let insurers offer as high a deductible as they would like, as long as it is still community rated.

4) Repeal the IPAB:  I don’t think this will have any discernible impact on cost, and is likely to cause more administrative burden in an already overburdened system

5) Remove the limitations on admin costs (i.e., the  mandatory Medical Loss Ratios):  I don’t think anyone believes this reduces premiums; it just decreases the admin functions that may improve utilization control.  Let the payers compete on premiums.

Let me know what y’all think.

TSB

5 Responses to How ought we modify the ACA to improve it?

  1. Al Lewis says:

    Allow the 30% differential to apply to smokers vs. non-smokers only. Obesity is much too textured a condition to be subject to that penalty. Smokers cost companies a lot, mostly in smoking breaks.

  2. David Beauregard says:

    I would begin modifying the ACA by eliminating Chronic Disease from the general medical risk pool. Chronic Disease would be a rider to an existing individual/employer Health policy. A national Chronic Disease Panel would be appointed. The Panel would be made up of Physicians, hospital providers, members of the Public Health service and insurers (include Medicare). The Panel would be charged with establishing Chronic Disease designations, oversight of individual disease statistical analysis, costs of care and patient outcomes, assist with moving Pharmaceutical and technology advances ( as related to designated Chronic Disease )through the regulatory process and for creating an annual national budget for Chronic Disease care funded as a %age of individual/employer Health premiums, Federal and State income taxes and price focused joint ventures with Pharmaceutical, Technology and other vendors focused on lowering costs of treating and eradicating a designated Chronic disease. Next in line I would remove employer mandates and allow the use of HSAs. Finally, I would roll back coverage for pre-existing conditions. I would seek to establish an insurance mechanism that would grand-father in those individuals currently insured with qualifying pre-existing conditions. I would seek to set a case by case date for pre-existing condition coverage. This would be predicated on the insured’s enrollment date for general health coverage under the “basic coverage” portion of a revised ACA. Finally, persons who elect to forego the basic Health coverage offered under any new law; would be assessed a 5% penalty annually based on gross annual earned income. The penalty would be “deposited” in an HSA in the taxpayers name to offset uninsured healthcare costs during any period the individual fails to obtain a Health policy under any revision of the ACAs basic Healthcare insurance, provisions.

    • timsbreaux says:

      If you were going to undo guaranteed issue, wouldn’t it be easier to have a separate high-risk pool than to go to the (arduous and slow) process of establishing federal chronic disease definitions?
      TSB

  3. David Beauregard says:

    I am interested in breaking the problem of cost into more managable bites.

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