Column: Yes, Obamacare is in dire need of fixing. Here’s a guide to the best options.
You can set your watch by it, or at least your calendar. If it’s a day of the week ending in “Y,” the House congressional majority is preparing to vote to repeal the Affordable Care Act. These days are no exception: A repeal vote in the House is scheduled for this week, linked to a provision to cut funding for Planned Parenthood. Both will be DOA at the president’s desk.
What’s lost in this openly partisan waltzing around is that many aspects of the ACA are in dire need of fixing. Some are the result of hasty or poor drafting; others reflect practical problems that emerged once Obamacare went into operation.
Some of [Obamacare’s] approaches have turned out to be ineffective, poorly targeted, or not ambitious enough to address deeply rooted problems.
Healthcare experts Timothy Jost and Harold Pollack
These are inevitable occurrences with any major legislation, though they don’t have much to do with the real issue conservatives have with the ACA. In the view of John E. McDonough of Harvard’s School of Public Health, it’s that Obamacare raises taxes on the wealthy while giving them “bupkis” in direct benefits.
A lot can be done to correct the real flaws in the ACA, and Timothy S. Jost, emeritus professor at Washington and Lee law school, and Harold Pollack of the University of Chicago have provided an extensive guide, published a couple of weeks ago by the Century Foundation.
Jost and Pollack approach their task as admirers of the ACA, which they note has brought the percentage of Americans under 65 without health insurance to its lowest point in five decades. Yet they acknowledge that “some of its approaches have turned out to be ineffective, poorly targeted, or not ambitious enough to address deeply rooted problems.”
Here are a few of their main recommendations.
--Fix the “family glitch.” Jost and Pollack properly call this “the most glaring defect” in the ACA’s subsidy structure. Under the ACA, a worker is ineligible for ACA subsidies if he or she is offered affordable health coverage by an employer. Whether because of a drafting error or inattentive rulemaking by the IRS, that ineligibility extends to all members of the worker’s family even if affordable family coverage isn’t obtainable from the employer.
The Rand Corp. has estimated that the change would add as many as 4.7 million Americans to the rolls of the subsidized insured at a cost of up to $8.9 billion, or about two-tenths of one percent of the federal budget.
--Improve subsidies and otherwise reduce the burden of cost-sharing. Sticker shock in the individual health insurance market has shifted from premiums to deductibles, co-pays and out-of-pocket limit. These still leave too many working-class families with heavy medical bills, and discourage some from signing up for insurance at all, even given the existing subsidies. That’s especially true of families earning over the eligibility ceiling for tax subsidies, which is 400% of the federal poverty line ($97,000 for a family of four).
Jost and Pollack endorse increasing subsidies for families below 400% of the FPL, and providing those over that line with subsidies that would bring down coverage costs to a given percentage of household income -- say 8.5%. One option is to give those families the option of fixed-dollar tax credits that would improve insurance affordability while still leaving them responsible for most of the costs.
--On Medicaid, give states an option they can’t refuse. The Supreme Court in 2012 saved Obamacare generally but threw a monkey wrench into a key provision mandating that states expand Medicaid to cover the poorest households. The court made Medicaid expansion voluntary, and 20 states, all with GOP control of the legislature or governorship or both, are still holding out.
One common rationale of the holdouts is that the federal share of the expansion, which is 100% through this year, will gradually ratchet down to a permanent 90% through 2020. Jost and Pollack call this “one of the most generous federal-state financing arrangements in the history of health policy,” and observe that expansion has been a boon to state governments and economies that have accepted the change.
But in some states it remains at least an ostensible argument against expansion, which has left more than 3 million Americans uncovered in the holdout states. So they propose making permanent a federal share at 100%. This will cost about $5.2 billion in 2020, when 11.9 million adults would be covered.
--Eliminate estate recoveries from the new Medicaid patients. The ACA drafters overlooked that traditional Medicaid rules allow states to recover the cost of care from the estates of patients who received expensive care on the public’s dime despite owning homes or other assets that could be sold to repay the program.
That provision remained in place for patients gaining coverage from Medicaid expansion, even though they’re a discrete population and uniquely charged for coverage among ACA beneficiaries. (The tax subsidies enjoyed by wealthier insurance enrollees don’t have to be paid back.) Several states say they may try to recover Medicaid expenditures from enrollees over 55; others such as California say they won’t do so, but have the right to change their minds.
The provision is unfair at best and counterproductive at worst, since it may discourage some households eligible for Medicaid from signing up, fearing that their meager assets eventually will be seized. The rule is a recordkeeping nightmare and the return is insignificant. Jost and Pollack rightly say that Congress should kill it.
--Restore the “public option” by offering Medicare to the 60+ population. The original public option, which resembled Medicare for all, was killed during the ACA’s legislative phase by opposition from the drug industry, hospitals and physician groups, and medical device makers who feared having to negotiate prices with Medicare.
Jost and Pollack propose a demonstration program offering Medicare to Americans in the near-retirement cohort -- say ages 60 to 65, after which they’re eligible for Medicare anyway. This group tends to have high medical needs, pay the highest insurance rates under the ACA’s limited age-based cost ratings and often earn too much to be eligible for subsidies. But they might benefit the most from early admission to Medicare.
These are, on the whole, responsible, well-targeted fixes to flaws that become manifest. Some, including a fix to the family glitch, can be managed by administrative order. Others require action by Congress. Obamacare’s critics in Washington have continually claimed that they’re in favor of better health and healthcare for all Americans, but don’t like the way the ACA delivered it. Here’s their chance to take a few steps showing a genuine commitment.
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