Acting on the principle “Why put it off until tomorrow when you can do the wrong thing today?” the House of Representatives last week voted to repeal the Cadillac Tax, the tax of 40% on a portion of the most lavish employer-provided health care plans. The Cadillac tax was proposed not just to help fund Obamacare but also as an incentive for restraining the rapid growth of health care costs. Because the tax break—treating important compensation as untaxable—is unlimited, Alan D. Viard of the American Enterprise Institute says, it encourages employers to provide high-cost plans “that cover routine care and feature low deductibles and copayments. Those plans increase the demand for medical services and drive up costs for other patients.”
As the administrator of the two largest public health-care programs in the country, Medicare and Medicaid, I can say these programs face major fiscal challenges. Those who seek to expand them do so because of their expected lower price tag on premiums. But there’s a simple explanation that makes the low cost considerably less alluring: Public programs pay health-care providers less than private payers. Low prices imposed on doctors and hospitals can’t stop health-care costs from rising. Someone has to pay the bill—namely, Americans who purchase their coverage directly or through their jobs. In turn, this causes doctors and hospitals to attempt to make up the lost revenue by charging higher prices to private insurers, resulting in higher health insurance premiums for everybody else.
The White House should consider building on the HRA rule by requiring that all newly incorporated businesses seeking the tax break for employer coverage do so through HRAs. Such a reform would preserve traditional employer-based group health insurance for those who have it, while ensuring that start-ups that evolve into the Googles and Apples of the future deploy the new model.
Two efforts are underway in the Senate to compile bipartisan packages aimed at lowering and bringing transparency to health care costs, with the goal of merging them on the Senate floor this summer:
- Senate Finance Committee Chairman Chuck Grassley (R-IA) and his Democrat counterpart, Ron Wyden (D-OR), are poised to release a drug pricing proposal by the end of the month.
- The other top health care committee — Health, Education, Labor and Pensions — is preparing for a hearing on a health care pricing package recently released by its leaders, Chairman Lamar Alexander R-TN) and Patty Murray (D-WA).
Neither package will include one singular big thing to lower health care costs for consumers. Instead, they’ll be full of smaller proposals that legislators say together could help move the needle on prices.
| By all accounts, Robert Pear of the New York Times was one of the most relentlessly probing journalists on the health–care beat, enlightening readers and rankling partisans with the clarity of his reportage and his savantlike understanding of the federal government and its arcana. With a seemingly ever-present byline on Page One of the Times, Mr. Pear was a constant and authoritative presence in Washington for four decades. He died May 7 at 69 at a hospice center in Rockville, Md. The cause was complications from a severe stroke that he suffered April 29, said his brother, Doug Pear. [Robert was the quintessential journalist who was always fair and thorough. We will miss Robert’s kindness and his incredible devotion to informing the health reform debate. RIP.] |
The Trump administration is making it a top priority to protect doctors, hospitals or other medical providers who object on a moral or religious basis to providing services like abortion, sterilization or assisted suicide. In a 440-page rule issued Thursday, the HHS Office of Civil Rights said it will use a broader array of tools to enforce more than two dozen “conscience protection” laws, some that have been on the books since the 1970s.
President Trump proclaimed this week that Republicans will become “the party of health care” and promised that a replacement that will be well-received by voters. “If the Supreme Court rules that Obamacare is out, we’ll have a plan that is far better than Obamacare,” he told reporters Wednesday during an event in the Oval Office. White House aides said they are looking at expanding options, such as bridge plans, that are “free from Obamacare’s burdensome mandates.” Also in the mix is legislation from Sens. Bill Cassidy (R-LA) and Lindsey O. Graham (R-SC) that would provide grants to states to provide coverage.
Obamacare health plans have been criticized for severely restricting the doctors and hospitals that patients can see. But sometimes even those limited provider lists are riddled with errors, causing additional headaches for patients who had purchased a plan hoping to keep their physician only to later discover that doctor isn’t fully covered by insurance.
Marketplace insurers are fighting lawsuits from consumers in four different states who say they were misled about which health providers were covered under their plan. It wasn’t until after purchasing the plan, these patients allege, that they learned their doctor or hospital was outside its network and therefore covered only partially or not at all.
States that expanded their Medicaid health insurance programs are hunting for ways to fund the new enrollees in 2020 as they face a final drop in federal contributions.
The federal government will still cover the bulk of the costs of care for the roughly 13 million Americans newly eligible for Medicaid under the Affordable Care Act, which allowed states to expand the program to people earning somewhat above the federal poverty level. But the gradually decreasing federal contribution — originally set at 100 percent but reduced to 90 percent starting next year — has left some states with budget holes to fill.
The president applauded the rollback of a key portion of the Affordable Care Act, which he has called a disaster. He called for protections for people with preexisting conditions, though his administration has worked against keeping them by trying to eliminate Obamacare. He pledged to bring down the price of prescription drugs and called for childhood cancer funding, earning some applause from Democrats. But Trump also called for halting the spread of HIV transmission before 2030 — even though his previous budgets have proposed slashing money from government initiatives in that area.