Trials, tribulations, protests and pandemics: the resolve of our democracy is being tested. It’s time we take a deep breath, a step back and a hard look at our country and the role we aim to occupy in the world. Polarizing demagogues, senile placeholders, corporate donors and career politicians don’t own our ideas or the right to manage our discourse. Our opinions are our own and we owe it to each other to express them.
Every other week, this column will explore one aspect of U.S. public policy to contribute to and restore the marketplace of ideas that once defined this historic community. Through our discussions of proposals, plans and projects, we will strive to remove the noise, break through the boundaries of identity politics and highlight the ability of compromise, creativity and intellectualism to find common ground.
This week we’re discussing health care policy: Medical care is a merit good — a service that confers benefits to society beyond what is immediately realized by the consumer. Therefore, it is reasonable to assume that in the wealthiest nation in the history of the world, medical care should be available to all who seek it. Unfortunately, due to insurance premiums tracking cost inflation, price gouging of prescription drugs and rising co-payments, the total cost of using our private health care system is too expensive for most Americans, including many that already have health insurance.
However, if we want to get a handle on where we’re going, we need to understand how we got here. In its original iteration, health insurance was only intended to cover expenses related to medical catastrophes, but fee-for-service reimbursement of health care providers has encouraged steady utilization. As a result, premiums have risen in pace with cost inflation and insurers are shifting more of the cost burden to contract holders.
Why have they been able to do this? Widespread consolidation of service providers has resulted in four insurance companies providing service to over 85 percent of the employer-provided and independent insurance markets. The largest association — Blue Cross Blue Shield — is an alliance of health insurance companies that covers 106 million people, nearly one-third of the entire U.S. population. Consolidation can lower costs for health systems, but it rarely translates into lower prices for patients.
Over the last decade, a lack of antitrust legislation has allowed these corporations to methodically remove their competition from the market and set prices above the market equilibrium. The current state of health care provider markets demands stronger enforcement by federal and state antitrust authorities, policies to support more robust competition among providers and limits on prices in already concentrated markets.
The United States has the most inefficient health care system of any developed country in the world. In 2019, the U.S. spent an average of $11,000 per person on health care while Canada spent $7,000 and the U.K. spent less than $4,000 per person.
Yes, universal health care in the U.S. would cost a lot of money. More than $11,000 per person? We won’t know until it happens. As former President Barack Obama liked to say when pushed by proponents of a single-payer system, “We don’t start from scratch.” We agree the only step forward is to guarantee health care to more people than we do now. That may be through public hospitals, local health care initiatives, public-private partnerships, or some combination of initiatives.
Let us be clear, Medicare for all is not a cost-effective solution for our nation; it may be affordable for the patient at the time of care, but it is not affordable for the country. Even California — one of the nation’s most progressive and largest states — failed to pass Medicare for all in its state Senate because it would have doubled the public debt. The prospect that the federal government is going to come in, dictate the sort of care to be received by each particular patient and then decide what the doctor should be paid for delivering that care is already leading a massive brain drain, which will invariably decrease the quality of care that the most advanced health care system in the world is capable of providing. But we can always do better.
Here are five things we can do to sustain our population and our health care system.
1. Standardize regulations so insurers can compete across state lines and reduce costs
If we’re going to have a market-based system for health care, then the market needs to be allowed to operate. Discrepancies in state regulations allow insurers to tailor offerings and minimize coverage. An open market that allows citizens to purchase coverage from insurers across the country will increase competition and lower premiums for all Americans.
2. Block-grant funding for Medicaid and relax benefit requirements
In 2012, following the ratification of the Affordable Care Act, the Supreme Court ruled that each state has the right to decide who is and who isn’t covered under its Medicaid program. As a result, the federal government cannot force states to provide coverage to certain demographics; however, they can increase funding for state programs by block-granting large sums of money for the expressed purpose of expanding government-subsidized insurance to more low-income individuals and families.
3. Shorten the lifespan of drug patents
In 2016, then-presidential candidate Hillary Clinton proposed a plan that would protect U.S. consumers from large price hikes on long-available drugs, citing drug maker Mylan NV’s repeated steep price increases on EpiPen for severe allergy sufferers. In a market economy, patenting of intellectual property is necessary to incentivize innovation, but 20 years is much too long for a patent to protect life-saving drugs from market competition. We propose shortening the lifespan of drug patents to five years.
4. Allow people to save money for health care in tax-deferred savings accounts
Both education and health care are merit goods. So, if Coverdell savings accounts, 529s, and education savings bonds all exist so that people can save money to pay for education tax-free, why shouldn’t similar accounts be utilized for medical expenses? Some people with high deductible health plans qualify for tax-deferred health savings accounts, but this should be available to everyone. Total no-brainer.
5. Require health care providers to cover patients with pre-existing conditions
For people with pre-existing conditions, health care can be a nightmare. The Affordable Care Act prohibits insurers from discriminating against these people; however, this resolution relies on an adequate pool of younger and healthy individuals to offset losses. The Supreme Court is set to make a groundbreaking decision about the future of the Affordable Care Act in the next few weeks.
Today, President Donald Trump promises an all-encompassing health care plan that includes, “telemedicine… lowering the cost of drugs … and protecting pre-existing conditions,” White House Press Secretary Kayleigh McEnany said. Although the executive branch has already passed two self-imposed deadlines, we expect that the president will release his plan soon and we implore him to consider our suggestions should he remain in office for a second term.