11 Conservative Healthcare Plans And their Problems

I’ve taken 10 of the most talked about Conservative Healthcare plans and present the idea behind the plan and the problems with the plan.  

Because these ideas have been around for a while there is a lot of information on what they are and what affect they will have.

From the 6th Districts perspective, the goal of our Health Care Ecosystem is “to cover more people than Obamacare at a lower cost with fewer regulations and no mandates.”

Huffington Post did a great review – Click here to go to the original post.

Here are the 11 points they raised in that post:

 

1. Get rid of the lines!

The idea: Let health insurance companies sell plans to consumers “across state lines” to increase competition and choice.

The problem: This policy has always been a Trojan horse. The notion is to deregulate health insurance by allowing companies to avoid states where rules require them to cover things like diabetes and autism — and then set up shop in states without those mandates.

And while allowing health insurers to go back to selling plans with meager benefits might be good for healthy people who won’t use their coverage, it’s bad for sick people and for states with more rules. If a healthy person from state A buys a skimpy plan from state B, insurers in state A lose a healthy customer, which is bad for business and could cause rates there to rise.

Insurers aren’t clamoring for this. One big reason is they’d have to assemble networks of medical providers in any state where they had even one customer, which is a lot of bother. Also, it’s actually been tried in Georgia and a few other states — and literally no insurance company has participated.

2. High-risk pools for the sick

The idea: Take care of people with the greatest health care costs by enrolling them in so-called high-risk pool insurance that’s government-subsidized. That way, they’re covered and everyone else’s premiums go down because regular insurance no longer pays for the costliest patients.

The problem: This could actually work, if it were adequately funded (think of Medicare, which is sort of a high-risk pool for the elderly, people with disabilities, and kidney-failure patients). Except in the five decades since the first high-risk pools came to be, they’ve never been adequately financed, and it’s hard to see Republicans setting aside a lot of money for government-funded health care any time soon.

3. Make the sick pay more

The idea: Allow insurers to vary premiums, charging more to people with medical problems or at high risk of developing them. That way, healthy people wouldn’t have to pay as much for their coverage.

The problem: For a start, the whole purpose of all kinds of insurance is for many people to pay in so that few people can get benefits when they need them. Getting rid of what’s called underwriting — basing a person’s health insurance premiums of their health status and medical history — is one of the most popular things to come out of the Affordable Care Act, and for good reason.

To a lot of people, jacking up premiums on someone because they just got sick or used to be sick or might someday become sick seems unfair or even cruel. Plus, most of us — if we’re lucky — will live long enough to go from being the healthy person to the sick person, meaning we’d all become that customer paying more at the time we need it most.

4. Tax health insurance more

The idea: Alter the tax code to reduce or eliminate an existing preference for employer health insurance.

The problem: Starting around the time of World War II, the federal government decided that if your employer provides health insurance, then the premiums won’t count as part of your income. One goal of this decision was to boost job-based coverage — and it did.

But most economists believe the tax break creates an artificial financial incentive to provide employees with generous coverage, causing them to consume more health care and eventually drive up prices for everybody. It also disproportionately benefits middle- and upper-class people, who have the kinds of jobs that provide benefits, over the poor.

The solution, economists say, is to limit the tax break or, better still, eliminate it entirely. The Affordable Care Act actually includes a provision that would accomplish this, although Congress last year voted to postpone its implementation and the change may never take effect.

The risk of messing with this part of the tax code is that it could make insurance more expensive by taxing its cost, which could weaken the foundation of the employer coverage system. This would force people to look elsewhere for insurance.

That’s not such a big deal with Obamacare in place, since the law’s exchanges theoretically make private plans and Medicaid available to everybody, regardless of pre-existing conditions or ability to pay. But without the exchanges or some other similar mechanism for universal coverage, some people who lose employer insurance would end up without any coverage at all.

5. Lower prices for younger people (and higher prices for older people)

The idea: The ACA limits how much more health insurance companies can charge older customers to compared to younger ones to 3:1. This tends to make coverage relatively more expensive for young adults than before Obamacare, so some Republicans have proposed raising the ratio to 5:1.

The problem: It’s sort of self-evident: Older people, who typically have higher medical costs and greater need for insurance, would see rate increases. It’s roughly the opposite of what the ACA did.

6. Health savings accounts!

The idea: Letting people sock away money and spend it on out-of-pocket medical costs tax-free encourages saving and makes patients more like consumers who shop around for the best prices. A popular Republican proposal is to expand the use of these products and to let people pay health insurance premiums pre-tax, too.

The problem: These are great as a tax shelter and a way to buy the cheaper, high-deductible insurance that comes with it — if you can afford to save money, which most Americans demonstrably can’t. What’s more, the evidence suggests that patients make terrible shoppers. It’s very hard, if not impossible, to get reliable information about what medical procedures costs. Lay people often aren’t in a position to know even what questions to ask. And no one comparison shops during an emergency.

7. Make Medicaid better by shrinking it

The idea: Reduce funding for Medicaid, then give the states way more leeway to run the program as they see fit.

The problem: Medicaid is the largest single provider of health coverage in the U.S. It covers even more people than Medicare does, and the program as a whole is very expensive. States, which administer the program and kick in a bunch of the money, struggle to find adequate funding and usually must seek federal approval to alter benefits and eligibility.

To conservatives, the solution is obvious: Slash spending and let states make big changes, like dropping entire categories of enrollees, on their own.

But if you significantly reduce the amount of money devoted to Medicaid, you significantly reduce the number of people you can cover and the kinds of benefits you provide.

Medicaid is already underfunded. It’s expensive because there are so many beneficiaries on it — including a lot of pregnant women, people with disabilities, and frail elderly in nursing homes, who are costly —  not because it’s buying lavish care or full of waste. And it’s not like these people could get insurance some other way. By definition, the people on the program are either very poor, have disabilities, or both.

8. Smaller subsidies for fewer people

The idea: Health insurance is expensive, so giving people money — usually in the form of a tax credit — can help them afford it.

The problem: This actually is one of the most consequential parts of the Affordable Care Act. But the questions are: Who gets the money, and how much do they get? GOP plans that feature tax credits offer substantially less assistance to a lot fewer people, and some of them target that assistance based on age, not income. That would leave a portion of the neediest with little to no help and offer subsidies to higher-income households that may not need them.

9. Coverage for (some) people with pre-existing conditions

The idea: The pre-Obamacare market allowed insurers to reject customers based on their medical histories, and now they must accept anyone. Republicans don’t want to keep that, but they want to look like they are by proposing a guarantee that people who already have insurance won’t lose it if they get sick.

The problem: For one thing, federal law already offered a version of this guarantee even before the Affordable Care Act. More importantly, this could lock out anyone who doesn’t have coverage — because they can’t afford it, because they don’t think they need it — forever, leaving them uninsured when the time comes they actually need medical care.

10. Turn Medicare into a voucher program

The idea: Give seniors vouchers — a.k.a. “premium support” —  and let them shop around for an insurance plan they like.

The problem: Today Medicare is a single government program that guarantees a fixed level of benefits; private insurers can offer alternative plans, but those policies are subject to strict rules that result in coverage that’s no less generous than what the existing program offers.

Conservatives would prefer a system with more free-wheeling competition among plans. The idea has been kicking around for a long time and, in some versions, traditional Medicare remains an option for seniors who want it. But the theory for the change is always the same: Competition would hold down costs better than the existing program does.

Or so the thinking goes. The problem with the theory is that Medicare is actually doing a pretty good job of holding down costs now.

Critics worry, plausibly, that voucher schemes are simply a roundabout way of giving seniors less health care. That’s particularly true when the sponsors of such plans have traditionally envisioned their plans yielding big savings that likely wouldn’t be possible unless the insurance seniors had provided much less coverage than it does now. Critics also worry — again, with reason — that traditional Medicare would not survive long in such a scheme, forcing all seniors to take private insurance.

11. Curb malpractice lawsuits

The idea: Limit jury awards in medical malpractice lawsuits

The problem: The medical malpractice system gets a lot of bad press, and deservedly so. Many well-meaning physicians operate under clouds of suspicion, particularly in high-risk fields like anesthesia and obstetrics.

Meanwhile, research suggests the system doesn’t serve patients particularly well, because only a relative handful of people harmed by medical negligence actually bring cases to court and win.

That’s why even some liberals have called for reforming malpractice laws in ways that would compensate more of these people while simultaneously introducing new safeguards that would deter negligence — and, ideally, avoid other kinds of adverse medical events as well. Systems like that already exist in some parts of Europe.

But the usual conservative solution is simply to slap a limit on how much juries and judges can award in damages.

In this scenario, lawyers would be less enthusiastic about bringing cases, since their contingency income from winnings would be much smaller. In the absence of other reforms, the victims of malpractice would have even fewer sources of compensation than they do now.

And while limits on awards might reduce spending at the margins, since physicians would be less inclined to order up extra tests and practice other kinds of “defensive medicine,” most analyses have suggested the impact on the nation’s overall health care bill would be modest.

Skip to toolbar