Pennsylvania state leaders on Tuesday touted their plan to transition from the federal insurance exchange, healthcare.gov, to their own online marketplace as a move that will save money and improve access to affordable health insurance.
Gov. Tom Wolf on Tuesday signed legislation establishing a state-based exchange where Pennsylvania residents who buy individual health plans can shop for coverage.
President Trump said Friday he was preparing an executive order that would lower drug prices so that the federal government would pay no more than the costs paid by other countries.
He said the action would focus on a “favored-nations clause,” which is generally a contract under which a seller gives buyers the same best terms it offers to others.
Rising out-of-pocket costs for drugs are a major concern of Americans, and for good reason. Recently, some members of Congress and officials at the Department of Health and Human Services have championed a particular strategy to address this problem: pegging U.S. drug prices to what other countries pay for the same medicines.
By the left’s account you’d think the Trump Administration’s only ambition on health care is to rip insurance from the poor and sick. So note that a Health and Human Services rule finalized last month represents a dramatic expansion in health-care choices for those who may have limited insurance options.
The Trump Administration finished regulations expanding health reimbursement arrangements, often known as HRAs. The arrangements will allow an employer to give a worker tax-exempt dollars to buy a health-insurance plan in the individual market. Such arrangements have existed in some form since the early 2000s, but the Obama Administration used the Affordable Care Act to limit them.
President Trump wants you to see upfront prices for health care. That’s why a few months ago, the Department of Health and Human Services (HHS) recently published a request for comments about whether and how to end secret prices in health care. The deadline for comments was last week, and the submissions from the industries most threatened by consumers knowing and comparing prices — hospitals and insurance companies — are an exercise in Swamp-o-nomics.
John Desser, Senior Vice President of Public Policy and Government Affairs at eHealth Inc. and former HHS official, said, “Any effort to bring more visibility and data to the consumer on health care costs is a step in the right direction. Health care is just far too opaque, and so anything we can do to address that is a step in the right direction — but there will be some controversy. There will be entrenched interests that will try to oppose it.”
“Specifically, we are concerned about proposals for open-ended arbitration, which have been floated as a solution to the problem. If arbitration appears innocuous, it is to a large extent because it is not transparent. Experience suggests that arbitration would be cumbersome to deploy, and highly favorable to those health care providers who charge high prices today. If Congress were to endorse arbitration, it could potentially open the door to a system quite unintended – establishing an inflationary dynamic that accommodates and encourages the rapid growth of costs.”
Total health expenditures under a Medicare for All plan that provides comprehensive coverage and long-term care benefits would be $3.89 trillion in 2019 (assuming such a plan was in place for all of the year), or a 1.8 percent increase relative to expenditures under current law. This estimate accounts for a variety of factors including increased demand for health services, changes in payment and prices, and lower administrative costs. We also include a supply constraint that results in unmet demand equal to 50 percent of the new demand. If there were no supply constraint, we estimate that total health expenditures would increase by 9.8 percent to $4.20 trillion.
AEI economist Benedic N. Ippolito testified before the Senate HELP Committee on the Lower Health Care Costs Act. Ippolito applauded the bipartisan effort to “meaningfully increase competition and transparency in health care markets…lowering costs would also improve access to health care.”
Senate HELP Committee leaders Wednesday unveiled their wide-ranging bill to address health care costs including “surprise” medical bills. [While surprise medical bills are a serious problem and the goal is laudable, Congress has tried in the past to address this issue, leading to unintended and expensive consequences. All of the proposals before the HELP committee are controversial, and Congress must proceed carefully to avoid exacerbating the problem.]