subsidies

An effective overhaul of the nation’s health care laws will require scrapping the most damaging parts of Obamacare, keeping some of the provisions, and giving much more freedom to states and insurance companies to create vibrant competition that will increase consumer choice and bring down soaring costs.

That’s the assessment of Galen Institute President Grace-Marie Turner, a prominent voice against both Obamacare and the Clinton administration’s attempted overhaul of health care in the 1990s.

The Affordable Care Act, President Obama’s signature domestic legislation, survived a Supreme Court challenge in 2012.  While the court states that mandating Americans buy health insurance is unconstitutional, the provisions were allowed to stand since people were given the choice to buy insurance or pay a fine.

Turner says the individual and employer mandates need to be the first things on the cutting room floor.

“They do have to go.  The individual mandate, in particular, is the single-most unpopular part of this law,” said Turner, who says there are ways for the Trump administration to kill the mandates without a vote in Congress.

“There are ways through the regulatory process, not even through legislation, that Mr. Trump could basically eviscerate the individual mandate.  But I also expect that to be very much on the chopping block when they do their repeal bill,” said Turner.

She says the employer mandate deserves the same fate.

“The employer mandate is the same.  Even many of the president’s advisers have said that the employer mandate is really relatively useless, except for forcing people to buy – this is me saying this – that is extraordinarily expensive and is driving up everybody’s premiums and deductibles,” said Turner.

But while there has been much talk of full repeal, Trump recently said he would be open to keeping a limited number of provisions that have proven to be popular.  Turner says keeping policies to forbid insurance companies from denying coverage due to pre-existing conditions or allowing adult children to stay on their parents’ policies should be retained.

“The president-elect should have have come out early on, saying, ‘Of course there are some goals in Obamacare that we share.  We want to make sure that as many people as possible have coverage.  We want to make sure that people are protected so that their insurance is real insurance.  The fact that they’re in Obamacare does not mean that they’re bad,'” said Turner.

“They just have to go about a way of achieving those goals in a much different, more consumer-friendly, more market-friendly way,” said Turner.

She also expects Congress to provide a transition period from the current law to those new, market-oriented solutions.

Turner also says federal subsidies should still be available to those buying coverage on the individual exchanges, suggesting many people will still need a hand up even if efforts are successful to drive costs down through competition and choice.

She says subsidies are actually very fair.

“People with employer-based health insurance get huge subsidies worth $250-300 billion a year and forgiving that part of their income from taxes that goes to pay their health insurance premiums.  So people who don’t have that option are being shut out.  They’re paying their premiums with after-tax dollars.  So yes, subsidies are going to have to be part of the equation,” said Turner.

Where Turner really hopes to see big change is the stripping away of the federal tentacles that currently dictate most details of the health care system.  She says that will bring down costs and bring more people into the system.

“It would, as long as they don’t have so many rules that are forcing young people to pay so much more than their likely use of health insurance, which is one of the problems with Obamacare, and so long as you don’t have rules that allow people to simply purchase health insurance when they’re sick and drop it after they get treatment,” said Turner.

Turner says another vital step is to rip away the mandates of what has to be included in a given health care plan and allow the marketplace to decide what’s best.

“I can’t even think of the options that are out there that insurance companies might come up with – and smart actuaries – to give people the opportunity to make the decision for themselves what kind of coverage they need.  Maybe it’s a health savings account.  Maybe it’s a high-deductible plan, maybe it’s an HMO that has more restrictions on it,” said Turner.

“If people can make those decisions for themselves, then the market will be able to respond to them, rather than all these Washington bureaucrats and regulators,” she added.

Decenralizing power from Washington would also put more control in the hands of the states.

“The problem now is we’re all forced into this same strait-jacket of Obamacare.  We all have to buy these hugely expensive products, which fewer and fewer people can afford.  Give the market really an opportunity to provide products that people want to purchase within parameters and some guidelines that make sure it’s real insurance and that people are protected,” said Turner.

Turner says Obamacare is driving people away from a product they want because of the crushing mandates and high costs.

“People want health insurance.  It’s not that you’re forcing them to buy something they don’t want.  They want health insurance, but they don’t want to pay more for their health insurance  than they’re paying for their mortgage, which is happening to many people right now,” said Turner.

Turner says new companies would spring to life when they see an explosion in demand from patients interested cheaper plans that better meet the needs of their families.

She says House Speaker Paul Ryan already has the relevant committee chairmen working on plans to overhaul Obamacare.  However, she says it’s very unlikely that Republicans will try to achieve reform through one massive bill.  Instead, Turner believes lawmakers will pursue a piecemeal approach targeting specific aspects of the current law that need to be changed.