The Secret Sauce For Health Care Reform

By Susan Rupe InsuranceNewsNet

Those who want to replace the Affordable Care Act have concocted a number of different recipes for cooking up an improved health care law.

But there’s a “secret sauce” to make any health care reform plan successful, according to Peter V. Lee, the executive director of Covered California, the first state-based exchange established under the Affordable Care Act.

Lee was one of the panelists who appeared at a public forum discussing the process and implications of repealing and replacing the ACA. The forum was sponsored by the Kaiser Family Foundation and the Committee for a Responsible Federal Budget.

That secret sauce is the financial health of the law, Lee said. Its two main ingredients: subsidies to help consumers afford coverage and marketing to encourage consumers to enroll in coverage. This recipe will lead to what Lee called “a good risk mix.”

Lee said maintaining the tax credits is crucial to the financial health of any replacement plan. He called for a system of tax credits that is both income-adjusted and regionally-adjusted.

President Donald Trump has promised that an ACA replacement would offer coverage to everyone, maintain coverage for those with pre-existing conditions, and cost less than the current law. But what would an ACA replacement look like?

“The idea that we require insurers to cover everyone and rate everyone the same is a worthy goal but it is expensive,” said Joseph Antos of the American Enterprise Institute. Antos predicted that health care reform would move away from guaranteed-issue coverage and keep the Medicaid expansion but with some changes.

One issue the ACA did not address, he said, was the question of how you slow down the growth of health care costs. “The answer? By spending less money. But under the ACA, health care spending increased,” he said.

Antos called for giving insurers greater leeway in devising the kinds of health plans consumers want. “Insurers are in a better position to market their plans than regulators are,” he said.

The cost of a replacement was top of mind for G. William Hoagland, senior vice president at the Bipartisan Policy Center. “The cost issue is what drives us crazy,” he said. “How do you cover everyone and not add to the deficit without addressing the cost?

The real challenge in devising an ACA replacement, according to Chris Jennings, is to cover everyone, make deductibles go down and allow consumers to have their choice of doctors. Jennings spent more than 30 years as a health policy advisor to the White House, Congress and the private sector.

“It all comes down to the issue of affordability,” he said. “We all want to see deductibles lower, we want the benefits to be greater and we want the premiums to be lower.”

“Consumers don’t care if the replacement plan is a Republican plan or a Democratic plan. If it’s not affordable, they won’t buy it.”

Susan Rupe is managing editor for InsuranceNewsNet. She formerly served as communications director for an insurance agents' association and was an award-winning newspaper reporter and editor. Contact her at [email protected].