Opinion

Opinion | Jon Kingsdale

Democrats can fix the Affordable Care Act

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Federal District Judge Reed O’Connor’s determination last Friday overturning the entire Affordable Care Act won’t actually affect much — unless it is upheld at the Supreme Court, probably not until 2020 — but it ought to spark a substantive legislative response from House Democrats.

President Trump was quick to gloat and to invite Democrats to negotiate a replacement. With more and more Democrats dreaming of “Medicare-for-all” and the remaining Republicans in Congress after 2018 representing the far right, the prospects for “negotiating” a replacement are nil. This is simply an opportunity to blame Democrats for failing to “step up” and negotiate their own defeat.

Which is one reason that newly empowered House Democrats should use O’Connor’s radical decision as a call to action — specifically, to pass a bill they can put on the table now and campaign on in 2020.

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That’s smart politics. There’s a substantive reason to act as well. Unfortunately, ACA enrollment has peaked, leaving 28 million Americans uninsured, and marketplace enrollment in private plans now falling. Premiums are too high and consumer choice too limited in many parts of the country.

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It is time to put a real fix on the table, recognizing that this probably cannot become law until Democrats regain control of the Senate and White House. Simply proposing Medicare-for-all may galvanize the Democratic base, but it might not even pass the House and could well cost Democrats dearly in the 2020 election. But Medicare is popular, and the ACA can be improved by borrowing from it.

First, let’s be clear about objectives: The ACA needs to cover more people and bring down premiums. Both goals require addressing the root cause of runaway health care spending: prices.

The United States spends twice the average per person of our peer countries, not because we use more medical services, but because of higher prices for the medical services we do use. In fact, we see the doctor far less often, use half the hospital days, and swallow roughly the same number of pills as Europeans and Canadians. We pay on average twice what other advanced economies do for each visit, day, operation, scan, or pill.

Medicare-for-all would change that, but it is still a bridge too far for many voters, even moderate Democrats. Having come so close with the ACA — 91 percent of Americans are covered — a wholesale switch would be very disruptive. Rather, a reinvigorated ACA should build on tested elements of existing federal programs, just as the ACA built on tested elements of Massachusetts’ reform, to achieve the twin goals of coverage and cost.

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Here are three relatively simple fixes that would materially improve the ACA, building on some of the best policies in other programs:

First, concede the individual mandate. Get rid of this unpopular “stick” and increase the ACA’s carrots. For 12 years now, Massachusetts has offered higher subsidies than the ACA’s national schedule of tax credits. As a result, nearly everyone (97 percent) in the Commonwealth is covered. So let’s replace the mandate with more generous premium subsidies under the ACA and, if some sort of stick is still required, then the ACA should allow insurers to surcharge premiums for those who wait until they get sick to buy coverage, just as Medicare drug plans do now.

Second, to ensure competition and choice in marketplaces across the country, bring back the “public option” that was originally considered for the ACA. This doesn’t have to be government-run insurance; rather, we could deploy private Medicare Advantage plans on the ACA marketplace. These private plans now enroll half of all newly eligible Medicare beneficiaries. They combine competition and relatively low (Medicare) pricing levels for hospitals, doctors, and other care providers. (Remember, it’s high pricing that accounts for our high total medical spending.) So let’s have these same Medicare replacement plans compete for younger individuals in the ACA marketplace.

Third, let the government negotiate drug prices, as the Veterans Affairs department and so many of our peer countries do, both for Medicare and private Medicare replacement plans. The VA pays far less than commercial insurers for the same drugs. Let’s share those savings with current Medicare enrollees and the individuals who chose Medicare replacement plans in the ACA marketplace.

These are three easy-to-understand, workable fixes for the ACA. Are they controversial? Of course. Lowering the costs of coverage means taking money away from powerful interests, including people who save lives for a living. We revere them — when we’re not cursing them for overcharging.

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But America now faces the choice of making coverage affordable or halting recent coverage gains — likely to slide backwards in the next recession. Or we can build on the ACA, using some proven health policies from the federal tool chest.

Jon Kingsdale is senior strategy adviser at Wakely Consulting and associate professor of the practice at Boston University School of Public Health. He was the founding executive director of the Commonwealth Health Insurance Connector Authority.