Influential conservative policy wonks present their health care reform proposal

Improving Health And Health Care: An Agenda For Reform

By Joseph Antos, James Capretta, Lanhee Chen, Scott Gottlieb, Yuval Levin, Thomas Miller, Ramesh Ponnuru, Avik Roy, Gail R. Wilensky, and David Wilson
Health Affairs Blog, December 9, 2015

We are among those who opposed the ACA because of its heavy emphasis on federal control.

The plan we present is not confined to replacing the ACA. We propose major reforms to the tax treatment of employer-sponsored health care, Medicaid, Medicare, Health Savings Accounts, and other areas of existing policy. The cumulative effect of this comprehensive plan would be to decisively reorient health care policy away from bureaucratic regulation and toward the preferences of patients and consumers.

Overall Principles:

*  Government Subsidies Should Come In The Form Of Defined Contribution Payments

*  Reform Should Move Power And Control From The Federal Government To The States And The Empowered Patient-Consumer

*  Suppliers Of Medical Services Must Have Greater Freedom To Innovate And Provide Better Services To Empowered Patient-Consumers

*  Reform Must Improve The Federal Fiscal Outlook By Reducing Long-Term Health Obligations (reduce federal spending)

Replacing The ACA:

*  Retain The Tax Preference For Employer-Paid Premiums, With An Upper Limit

*  Provide Refundable Tax Credits To Households Without Access To Employer Coverage

*  Allow States To Regulate Insurance Offerings And To Establish Mechanisms For Consumer Choice Of Plans

*  Provide ‘Continuous Coverage Protection’ For Persons With Preexisting Conditions (lose guarantee after three months without coverage)

*  Allow States To Adopt A Default Enrollment Program

*  Allow For A Gradual Transition From ACA Subsidies (no new enrollees for ACA subsidies or Medicaid)

Reforming Medicaid To Allow More State Control And Consumer Choice:

*  Pursue Separate Reform Strategies For Medicaid’s Two Distinct Parts (healthy families vs. disabled and elderly)

*  Finance Medicaid With Fixed Federal Funding (block grants)

*  Empower The Disabled And Frail Elderly (let the states do it)

A Market-Based Reform Of The Medicare Program:

*  Adopt The Premium Support Reform Model (vouchers for private plans)

*  Promote Consumer Decision-Making

*  Modernize Medicare’s Benefits

*  Reform Medigap And Other Supplemental Coverage (more cost sharing and use limited networks)

*  Reform Medicare’s Payment Policies And Eliminate Unnecessary Bureaucratic Controls (abolish IPAB and CMMI)

*  Gradually Raise The Eligibility Age To 67

Lifelong Use Of Health Savings Accounts (HSAs):

*  Provide A One-Time Federal Tax Credit Matching Enrollee Contributions To HSAs (up to $1000 once in a lifetime)

*  Eliminate The Minimum Deductible Requirement (no HDHP required)

*  Allow Nontraditional Payment Methods (allow direct-pay, etc.)

*  Include HSAs In Medicaid Reform (high-deductible plans for Medicaid)

*  Integrate HSAs Into Medicare (high-deductible Medicare Advantage)

*  Allow Withdrawals Tax-Free After Age 75 Above A Minimum Balance (reward savers)

*  Allow Tax-Free HSA Rollovers To Designated HSAs At Death

Additional Reforms:

*  Reform Federal Funding Of Graduate Medical Education (cutting the funding substantially)

*  Reform The Federal Employees Health Benefits Program (defined contribution)

*  Integrate Veterans Into Mainstream Coverage, And Refocus VA Health Care

*  Improve The Transparency Of Useful Cost And Quality Data (stimulate better decision-making by consumers)

Full report from American Enterprise Institute, AEI (70 pages):



By Don McCanne, M.D.

Why should we be interested in a comprehensive health reform proposal from representatives of AEI and other conservative/libertarian organizations? Simply because the authors are prominent in the health policy arena and have considerable influence in crafting reform proposals for Republican politicians.

Speaker of the House Paul Ryan has promised this next year a comprehensive Republican plan to replace the Affordable Care Act. Although President Obama would not approve legislation containing many of the features listed in this proposal, nevertheless, the Republicans do intend to gain greater control of the political arena, and would hope to move forward with a Republican administration. It is important to understand what they would do with our health care system. By having this knowledge, we can more effectively inform the process.