This story originally was published by Real Clear Wire
By Monique Yohanan
The shutdown dispute offered a clear view into a problem that has shaped federal health policy for more than a decade. The Affordable Care Act (ACA) directs subsidies to insurance companies rather than to individual Americans. Democrats portrayed their position as a defense of middle-class families, but the system of subsidies they have created primarily protects and enhances insurance company profits.
The current ACA framework needs amendment to make structural reform possible. Republicans should state clearly what they are for: real choices for quality medical care that is affordable, secure, transparent, and accessible. There are three systemic reforms that can get us there.
The first reform is this: Americans should have a medical wallet on their phones. Instead of subsidies going to insurance companies, money would go into a medical wallet the patient owns and can directly control. It would resemble a Health Savings Account, but unlike current law, it wouldn’t be restricted to just those with high-deductible insurance plans. Families could use a medical wallet for routine needs or save for later expenses. Ownership changes behavior. People compare prices, judge value, and choose services based on their own priorities. None of this is possible when the subsidies bypass individuals and go directly to insurance companies.
The second reform Republicans should champion is portable coverage. Insurance should be centered around the individual, not the employer or the state. It is about freedom and security. Right now patients have neither. Americans want the freedom to make a fresh start, whether that’s a new job or a move to a new state. To do that, they need the security of stable insurance.
The ACA in its current form has made purchasing private insurance out of reach. Too often workers are stuck in jobs they would otherwise leave because losing employee-provided insurance is simply too risky and expensive. Insurance company subsidies have led to yearly rate hikes for everyone exacerbating the problem. The 9% of the population on ACA plans have been insulated from these price jumps, but the rest of the country has felt the full burden of these increases.
The third reform is essential to the first two (and to any truly functional healthcare system): full and real price transparency. In the 15 years after the ACA became law, people still do not know the exact cost of services before they receive them. Consumers should be able to shop for most medical care, but this currently is impossible. Real prices aren’t available up front, let alone whether those prices reflect high quality, high value care. While the ACA included language to improve price transparency, enforcement has at best been inconsistent. Clear prices are particularly important when consumers control their own dollars and have coverage that lets them act on that information. The Marshall-Hickenlooper bill accomplishes this, and must be a priority for passage.
Republicans have an opportunity to reframe the discussion. Right now the system benefits insurance companies and the middlemen who serve them. It’s time for a reset that puts Americans first. This can happen if we give taxpayers control over dollars intended for their care, offer them insurance that stays with them when their circumstances change, and let them know what they are paying before they receive a bill. These are practical expectations consistent with how every other sector of the economy functions.
Medical Wallet. Portable Coverage. Real Prices Up Front. These principles offer a direct and comprehensible alternative. They shift the debate away from defending a legacy architecture that has only one clear beneficiary – insurance companies – and towards a system that can make coverage affordable for everyone. The shutdown made the choice clear. Policymakers can continue to protect insurer subsidies or they can build a structure that gives people control. They cannot do both.
Monique Yohanan, MD, MPH, is a Senior Fellow for Health Policy at Independent Women.
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