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OPINION

House GOP Embraces Markets in New Health Reform Plan

House GOP Embraces Markets in New Health Reform Plan

(Rafael Ben Ari/Dreamstime.com)

Sally Pipes By Monday, 01 April 2024 04:06 PM EDT Current | Bio | Archive

The House Republican Study Committee's new budget proposal, which was released last month, offers fresh proof that the GOP hasn't given up on sensible health reform.

The proposal would balance the budget in just seven years, in part by undoing some of the most destructive elements of Obamacare.

It also gives Americans a glimpse of what the healthcare future might look like if Republicans take the White House and Congress this November.

Democrats have launched an all-out campaign to discredit the agenda. The Biden White House says that the RSC's ideas "risk returning to a time when individuals could be denied coverage due to pre-existing conditions or charged exorbitant premiums."

Two of Obamacare's most popular rules are its requirements that insurers sell coverage to all applicants regardless of health status or history and its ban on medical underwriting.

Insurers may only vary premiums according to age, tobacco usage, and geography.

The RSC's budget would end these mandates at the federal level and allow states to decide whether to implement them.

These rules reassure people who are chronically ill — or become so — that they'll never be denied coverage.

But they're an extremely costly way of guaranteeing access to health insurance.

They essentially require insurers to set premiums for most people at much higher levels than they'd pay in a normal market in order to subsidize coverage for a relatively small group of people who need costly care.

Indeed, 1% of the population aged 18-64 accounts for 25% of the country's health spending. Healthcare expenditures for those adults in the bottom half of the distribution add up to just 3% of the country's total health bill.

Taxpayers ultimately cover those higher premiums, as Obamacare and subsequent revisions to the law cap what people will pay in premiums as a percentage of income.

So higher premiums are effectively a transfer from the federal Treasury to insurers.

The RSC agenda would guarantee coverage for people with pre-existing conditions in a much less costly way.

It would steer particularly high-risk individuals into state-run Guaranteed Coverage Pools.

These pools would receive federal grants to help cover the health costs of their enrollees.

This money, combined with state-level restrictions on premium-setting, would help ensure that patients with significant health risks could purchase coverage at an affordable price without destroying the individual insurance market as Obamacare has.

Indeed, by removing particularly high-cost patients from the traditional insurance pools, the reform would bring down premiums for healthier patients while focusing federal and state assistance on the patients who genuinely need it.

As the authors of the RSC budget note, this approach "would significantly increase access to private health insurance, reduce costs and reduce federal spending"  a combination of outcomes that Obamacare simply can't deliver.

The budget's plan for reining in Medicaid spending — which surpassed $800 billion in 2022 — is both shrewd and aggressive.

It would replace the program's current funding model, which gives states at least one dollar for every dollar they spend on the entitlement, with a system of federal block grants that states could largely spend to achieve Medicaid's aims as they see fit.

By capping the amount of federal funding available for the entitlement, these block grants will encourage states to spend their Medicaid dollars more wisely and root out waste and inefficiency in the program.

And delegating spending decisions to the states would allow them to craft a Medicaid program that works for their population.

Unlike previous Republican Study Committee budget proposals, this new one does not include a plan to raise Medicare's eligibility age.

That's unfortunate. Americans' life expectancy has increased substantially in the almost 60 years since Medicare was created.

The program's future fiscal solvency will almost certainly require raising the eligibility age to reflect that reality.

If the RSC's budget proposal is any indication of how the GOP might approach healthcare reform, should Republicans take power this fall, then Americans patients have much to look forward to.

Sally C. Pipes is president, CEO, and the Thomas W. Smith fellow in healthcare policy at the Pacific Research Institute. Her latest book is "False Premise, False Promise: The Disastrous Reality of Medicare for All," (Encounter Books 2020). Follow her on Twitter @sallypipes. Read Sally Pipes' Reports — More Here.

© 2024 Newsmax. All rights reserved.


SallyPipes
By capping the amount of federal funding available for the entitlement, block grants will encourage states to spend their Medicaid dollars more wisely and root out waste and inefficiency in the program.
obamacare, republicans, rsc
709
2024-06-01
Monday, 01 April 2024 04:06 PM
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