By Kelly McCutchen
As the August recess fast approaches, procedural rules require health care to be addressed before Congress can move on to other important issues like taxes and infrastructure. Below are five ideas that would move health care reform in the right direction and hopefully create the momentum needed to get to a resolution.
Fund uncompensated care. Federal law requires hospital emergency departments to treat anyone regardless of their ability to pay, but federal funding covers only a small portion of the cost. In Georgia, for example, uncompensated care for people too poor to pay their bills amounts to over $1 billion a year. If hospitals can’t shift the cost to state and local taxpayers or private insurance, they often go bankrupt.
There’s a simple fix for this. Under the current House proposal, nearly every uninsured low- to middle-income American will be eligible for government assistance: either federal tax credits or Medicaid. But if these individuals don’t sign up for coverage, the federal funding never gets to the state. A better approach would allow a portion of those funds to stay in the communities where those individuals live and receive their care – eliminating uncompensated care. States and local communities should be given the flexibility to figure out the best way to make this work.
Match subsidies to the cost of coverage. Under the current House proposal, premiums for older Americans can be five times higher than premiums charged to the youngest. This makes sense because the medical costs for this older group are about five times higher.
The tax credits designed to subsidize premiums for older Americans in the House proposal, however, are only twice as high as those for the youngest age group, which has caused great concern among low-income seniors. Increasing the tax credits to a similar 5:1 ratio would be a logical start to addressing these affordability concerns.
Fix Health Savings Account rules. If someone signs up for an insurance policy that costs less than their tax credit subsidy, they should be allowed to keep the savings in their Health Savings Account (HSA). Otherwise, why would any insurance company charge a premium lower than the federal subsidy? Under the current proposal, individuals aren’t allowed to keep their savings.
In addition, if you have an HSA, current law prevents you from saving money by paying your doctor a monthly cash fee directly instead of going through insurance. Both restrictions should be eliminated.
Move toward fairer Medicaid funding. The current House proposal creates per capita block grants funded based on historical state Medicaid spending levels. That’s very unfair due to the large differences in current state spending levels. The state of New York, for example, spends more than three times as much on disabled ($30,221 vs $8,775) and elderly ($21,620 vs $7,604) Medicaid recipients than Georgia. The House proposal would perpetuate this inequity.
The solution is what statisticians call “reversion to the mean.” In other words, over time, high spending states should receive less funding and low spending states should receive more funding until all states move closer to the national average. This could be accomplished by adjusting the growth rates on the block grants to avoid abrupt changes in funding.
Encourage continuity of care. Imagine if you are on your employer’s plan, your spouse is on Medicaid and your child is on PeachCare. That’s three plans and three sets of networks, rules and regulations to navigate. Even worse, with unstable incomes, lower income workers tend to move in and out of eligibility, meaning constantly changing health plans and constantly changing doctors. This constant changing of doctors is particularly bad for individuals with chronic disease.
Allowing families to consolidate funds from several sources to purchase their health plan is one way to address this problem. So Medicaid funds could be used, for example, to add your spouse and child to your employer’s plan. Money follows the person to the plan they choose.
These five ideas could be the first steps to getting to a sorely needed health care solution. Premiums in Georgia have more than doubled over the last few years and too many Georgians are down to only one insurance company serving their market. The sick have less access to treatments and the providers they need. The healthy face crushing premiums to pay for care they don’t even use. Now is the time for Congressional leaders to find a way to bridge their differences and get us to a system that works for everyone.
Kelly McCutchen is president of the Georgia Public Policy Foundation.