Thursday, March 5, 2015

King v. Burwell: How to Get Ready to Replace Obamacare

Yesterday, the Supreme Court heard the oral arguments of King v. Burwell, a case that could very well undo most of the Obamacare subsidies. In section 36B of the Affordable Care Act (ACA), also known as Obamacare, it states that subsidies for health insurance under the ACA are acquirable "through an Exchange established by the State [own emphasis added] under section 1311 of the Patient Protection and Affordable Care Act." The unambiguous nature of these words could mean that the IRS overstepped its bounds by taxing individuals without congressional authorization, thereby making the federally-run exchanges for states that opted out running their own exchanges would be rendered unconstitutional. This would mean that about 6.5 million would lose the subsidies that allow for them to have health insurance, which would undoubtedly stymie Obamacare. (I would like to bring up as a side note is that mentioning the rate of those insured is a red herring because being insured is not the same thing as having readily-available access to high-quality health care) Although many are already speculating on the ruling, we won't know for about another three months how this will all play out. In the meantime, we have to consider the real possibility that many who are currently receiving health subsidies through the federally-run exchanges who would no longer be able to do so. Rather than let these individuals fall by the wayside, something should be enacted to replace what was technically illegal for the IRS to do in the first place, but what should that something be?

I'm no Republican, but the myth that there are no alternatives out there needs to stop being perpetuated. The Burr-Upton-Hatch plan was revealed only last month. There are also the Empowering Patients First Act and the American Health Care Reform Act, proposed in 2009 and 2013, respectively. Even Senator Ted Cruz proposed the Health Care Choice Act a couple of days ago. These plans could very well have their flaws, but we should stop buying into the idea that there are no alternatives to Obamacare.

And there certainly should be alternatives to Obamacare because it's only exacerbating problems that already exist in American healthcare. Writing a piece of legislation is outside of the scope of this blog entry, but I can tell you some of the facets that a "repeal and replace bill" should have:

  1. Affordability. Healthcare costs, specifically with premiums, have been increasing too much over the years, even when inflation is considered. Obamacare is only going to drive healthcare costs up over time. Cost containment needs to be an important factor, which brings me to my next point.....
  2. More individualized health care plans. Each person is different, has their own circumstances when it comes to their health, and should be able to choose a health care plan that best reflects those circumstances. Those who are healthier and/or younger do not need extensive coverage. Having plans that are excessively comprehensive cannot only be cost-prohibitive, but also inefficiently utilize scarce resources that could be diverted to those who could actually use them. Flexibility and choice should be offered to the individual. 
  3. Greater competition. Competition is one of the factors that leads to a vibrant marketplace because it provides lower costs for higher care. Constraining network choices, which is what Obamacare does, is not what people need to acquire something as vital as health care. One way to do that is allow for health insurance to be carried across states, but as I have mentioned before, it's quite tricky. If we've learned anything from Medicare Part D, it's that whatever Congress decides to enact, it needs to engender competition in the marketplace. 
  4. A lack of favoritism towards certain companies while creating portability. This is in reference to employer-based health insurance, a tax exemption that benefits companies who spend money on their employees' health insurance plans. Using this WWII relic of price control has been a major obstacle for bringing health care costs down. Plus, health insurance should not be something that is contingent upon having a certain job. I, or anybody else, should be able to have the portability to take the same health insurance plan from job to job. Any plan that does not consider the repeal of employer-based health insurance is, quite frankly, incomplete. 

I could go on and on, but the point remains: health care reform needs to be focused more on the patient and less on how the government intrudes on the lives of the individual with little to no value in return. There needs to be a focus on providing affordability while making sure that it maintains its accessibility. If the ruling is not in the government's favor, it would become a great opportunity for Congress to enact something that would create a healthy marketplace, something which is decidedly lacking with Obamacare.

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