By Chris Jacobs
Tuesday, January 17, 2017
Two months ago, the American people gave lawmakers a
clear mandate: Save our nation’s health-care system from the harmful effects of
Obamacare. They’re sick of exorbitant premium increases. They’re frustrated
with insurer drop-outs and narrow provider networks that stifle access. They
want change, and they want it now.
Congress’s votes last week on a budget were the first
steps toward repeal. Last January, Congress passed, and President Obama vetoed,
a reconciliation bill that would eliminate more than $1 trillion in Obamacare
tax increases and wind down spending on the law’s new entitlements by the time
Congress can pass more sensible health-care reforms.
Now, with Republicans set to take control of all the
White House, that bill could be passed again and signed into law. Some have
argued that doing so this year would disrupt the health-care industry,
prompting insurers to exit more markets and leaving the American people in the
lurch. But these critics should first acknowledge that Obamacare is leaving
millions of Americans in the lurch right
now. In one-third of counties, Americans have a “choice” of only one
insurer on their Exchange.
That said, conservatives must proceed carefully when
unraveling the government mandates crippling our health-care system.
Thankfully, as I outline in a report released today, Congress and the incoming
Administration have numerous tools at their disposal to bring the American people
relief.
As it repeals Obamacare, Congress should work to expand
the scope of last year’s reconciliation bill to include the law’s costly
insurance mandates. Because reconciliation legislation must involve matters
primarily of a budgetary nature, critics argue that the process cannot be used
to repeal Obamacare’s insurance regulations, and that leaving the regulations
in place without the subsidies will collapse insurance markets. But Congress
did not attempt to repeal the major insurance regulations during last year’s
debate; it avoided the issue entirely. Consistent with past practice, Senate
procedure, and the significant fiscal impact of the major regulations, it
should seek to incorporate them into the measure this time around.
Congress should also include provisions in the
reconciliation bill freezing enrollment in Obamacare’s Medicaid expansion upon
its enactment. Currently eligible beneficiaries should be held harmless, but
lawmakers should begin a path to allow those on Medicaid to transition off the
rolls and into work. In a similar vein, Congress should also explore freezing
enrollment in Obamacare’s insurance subsidies, provided doing so will not
de-stabilize insurance markets.
The Trump administration has an important part to play as
well, as it can provide regulatory flexibility to insurers and states — even
within Obamacare’s confines. For instance, Obamacare gives the secretary of
health and human services the sole authority to determine the time and length
of the law’s open-enrollment periods. In both 2016 and 2017, those periods
stretched on for three months, meaning that for at least one-quarter of the
year, any American could sign up for insurance — no questions asked —
immediately following a severe medical incident.
To guard against adverse selection — whereby more sick
individuals than healthy ones sign up for coverage, raising insurance premiums
for everyone — the Trump administration can significantly shorten enrollment
periods. Next year’s open enrollment should last no more than 30 days if
logistics will permit. Similar actions would restrict special enrollment
periods that individuals have gamed under Obamacare, purchasing coverage
outside open enrollment, racking up medical bills, and then cancelling their
coverage. The Trump administration can eliminate special enrollment periods not
required by statute, and require verification prior to enrollment in all other
cases.
Another place for regulatory flexibility lies in the 3.5
percent “user fee” assessed for all those purchasing coverage on the federal
exchange. In regulations released last month, the Obama administration
essentially admitted that the actual cost of running the federal Exchange has
dropped below 3.5 percent of premiums, but kept the “user fee” at current
levels to increase funds for enrollment and outreach. The Trump administration
should lower premiums by cutting user fees to the amount necessary for critical
exchange functions, rather than spending hard-earned premium dollars promoting
the partisan agenda the law represents.
The Trump administration can take other actions within
the scope of Obamacare to provide a stable path to repeal. It can withdraw the
mandated coverage of contraceptive services that raises premiums while forcing
individuals and organizations to violate their deeply held religious beliefs.
It can expand and revise the scope of essential health benefits, actuarial
value, and medical-loss-ratio requirements to provide more flexibility for
insurers. It can immediately withdraw guidance issued by the Obama
Administration in December 2015 that paradoxically made an Obamacare “state
innovation waiver” program less flexible for states. And it can build upon
legislation Congress passed last month, which allowed small businesses to
reimburse their employees’ insurance premiums without facing thousands of
dollars in crippling fines, by extending the same flexibility to all employers.
Congress and the Trump administration have many tools at
their disposal to provide an orderly, stable transition toward a new, better
system of health care — one that focuses on reducing costs rather than
expanding government control. They can and should use every one of these tools
to bring about that change, fulfilling the promise of repeal.
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