Aggressive deregulation is the key for competition-based, health-care reform
Contrary to the prevailing narrative, health care reform is alive and progressing. The public may only hear about a bungling Congress that cannot repeal and replace the Affordable Care Act, a law that is already imploding on its own. This administration continues to implement strategic deregulation that will lower the cost of medical care and insurance through competition.
The regulatory morass amplified by ObamaCare further isolated health care from market forces. This propagated perverse incentives, raised prices and reduced choices, ultimately costing patients and taxpayers dearly.
Insurance on Affordable Care Act (ACA) exchanges continues to worsen, as per HHS. According to the Kaiser Foundation only one exchange insurer offered coverage in each of approximately one-half of U.S. counties, with large year-on-year premium increases in 2018. This was even in the face of higher deductibles.
Moreover, the number of doctors and specialists who will accept those insurances continues to decline, with far less specialists as compared to providers outside ACA exchanges. Now almost 75 percent of plans are highly restrictive.
The Trump administration seems to understand the key concept — expose health care to competition for value-seeking, price-conscious consumers. After several failed efforts by Congress to repeal and replace the ACA, the president issued an executive order on Oct. 12, 2017 that called for reforms to increase consumer choice and more affordable care specifically through enhanced competition and deregulation.
In response, one key regulatory action was issued on Feb. 21, 2018 by the Departments of Health and Human Services, Treasury and Labor. This new directive increases the allowable time period for holding “short-term, limited duration” (STLDI) health insurance to 12 months from its current 3-month maximum.
These plans are flexible and cheaper, with premiums of one-third to one-fourth those of ACA-compliant plans. This is because they are exempt from many of the ACA regulations responsible for the premium increases, like bloated benefit mandates and counterproductive limits on out-of-pocket costs.
STLDI premiums can incorporate differences in health status and age that more accurately reflect medical care usage, i.e. that are actuarially fair. The administration has requested comments regarding further modifications.
Here are some: STLDI plans should be renewable and allowed for longer periods of time; they should be available to everyone, regardless of age or employment; and even more boldly, they should be included in Medicare and Medicaid as alternative, cheaper coverage coupled with a defined benefit instead of traditional coverage.