Free-market reforms needed in health care

What we now call “health insurance” is not health care. “Coverage,” whether through the ACA exchanges or the Medicaid expansion, was the model of the Affordable Care Act. The act is unwinding and the players are getting exposed. 

Case in point are the Covid-era ACA subsidies that everyone is talking about. Except that plenty of people are happy to let Americans think we are talking about all ACA subsidies. 

In fact, the current shutdown is over the subsidies that passed with the American Rescue Plan Act of 2021. The Democrats demand these subsidies that they passed become permanent.

A few points of clarification for the public:

1. These subsidies will be sent directly to insurers. Thus, Senate Minority Leader Chuck Schumer (D-NY) and crew are insisting that every year for the rest of forever taxpayers be forced to pay these subsidies into the pockets of the wealth-extracting third-party players of whom America seems none too fond. Little wonder: A weighted average of health insurer stock prices is up over 1000% since ACA passage. 

2. Current estimates of covering these subsidies come to $40 billion per year. But who knows what it will actually be, as the Dems are asking for a blank check for the insurers, who have a track record of demanding more.

3. These subsidies are separate from original ACA subsidies. Yes, that means that even if Schumer doesn’t get his way, we will still be subsidizing insurers in the marketplace. Most ACA enrollees will pay a share of less than $20 a week.

Math can help us understand this and find a better way forward. One person providing the uncomfortable figures is Brian Blase of Paragon Institute. He has put together a helpful graph and chart-rich video.

Blase shows us that, based on 50-year-old exchange enrollees, premiums have more than tripled since before the ACA was enacted. 

In addition, there’s a tremendous number of zero-claim enrollees on these plans, which means they’re not using any HC product. The overall effect is to cover up the coverage, keep the honeypot,sticky and sweet for the big insurers, pay for a product that in many cases is not being used, and charge your children and grandchildren dearly. Oh that pesky math! 

If you ask AI (and who doesn’t?) an uninsured, healthy 50-year-old would expect to pay anywhere from a few hundred to several thousand dollars per year for medical care out of pocket, depending on their health needs and how they manage costs. But now we the people  are paying $10,000 per year to insurers and not to the physicians, nurses, and others that actually give the care. 

If we made a true catastrophic plan without the essential benefits mandated by the ACA widely available again, those people getting the 2021 subsidies could be getting catastrophic coverage for less than the $10,000 that taxpayers are paying into the pockets of Big Insurance. Liberalize Healthcare Savings Accounts (HSAs) in a setting of radical transparency. Allow groups of independents to bid on true insurance together. Do all of the above, and suddenly prices and costs can come down for current ACA plan-holders and even more Americans. It’s not magic. It’s the free market married to math.

There’s a whole slew of additional market-based reforms that must be enacted if we are going to stop committing fiscal folly in our future: 

• Allow saved HSAs to transfer to one’s progeny.
• Provide regulatory relief for smaller independent medical practices.
• Facilitate site-neutral Medicare payments.
• Repeal the ACA exemption on physician-owned hospitals.
• Prevent monopolized ownership of hospitals and practices by predatory private equity.
• Repeal exemptions to anti-kickback statutes for health care middlemen.
• Break up the vertical integration of insurers/pharmacy benefit managers and pharmacies.
• Enact 340B reform.
• Allow physicians to get tax deductions for caring for patients who are unable to pay. 

While the above concepts may not be familiar to readers, they are familiar to many physicians who have been aligned on these issues for years. 

In coming columns, we can discuss these above concepts in more detail, as Congress hopefully meets across the aisle, and across the floors of House and Senate to finally discuss exactly how they can do something to make health care affordable and, while doing so, inform the American people why it has not been so for decades. 

Will you have to read past the headlines and do the math? You betcha! 

Marion Mass, M.D. is a practicing pediatrician in Bucks County and a member of leadership in Free2care.