July 13, 2014
WHICH IS HOW THE GOP WILL REFORM OBAMACARE:
A major problem is that many people in our entitlement society see nothing wrong with forcing others to provide for their desires. In a free and open society, anyone should be able to purchase anything he or she wants that is legal. It really should be no one else's business. Common sense dictates, however, that it immediately becomes my business if I'm being forced to pay for it.Wouldn't it be fairer and make more sense for people wanting some form of birth control to pay for it themselves? This is exactly what would happen if everyone had access to his or her own health savings account. A woman and her health-care provider would decide on a birth-control method, and the cost would be deducted from her account with no involvement of anyone else in any way. It's so simple and upholds privacy and freedom.Health savings accounts can be funded in a variety of ways and give people total control of where, how, and with whom they wish to spend their health-care dollars. Most people will want to get the biggest bang for the buck and will independently seek out both value and quality. That, in turn, will bring all aspects of medicine into the free-market economic model, thus automatically having an ameliorating effect on pricing transparency and quality of outcomes.Many corporations and communities already have very positive experiences with health savings accounts. Those experiences could be further enhanced by allowing family members to shift the money in their accounts among themselves. For instance, if one family member was $500 short for a procedure or test, another family member could provide the money by authorizing its deduction from his account. This provides a whole other level of flexibility to the concept of health savings. The overwhelming majority of encounters with the medical world could be handled through this type of system, eliminating bureaucratic delays and frustration.
Insurance plans that include health savings accounts (HSA) continue to rise in popularity, the trade group for health insurers reported Wednesday.The number of people enrolled in HSA-eligible plans hit almost 17.4 million early this year, a nearly 12 percent increase since 2013, according to America's Health Insurance Plans (AHIP). [...]Republicans strongly support HSAs, arguing the model is market-friendly and encourages consumers to consider their medical expenses more closely.AHIP agreed in a statement Wednesday."HSA plans provide important tools to support individuals and families in their healthcare decisions and to help them save for future medical expenses," AHIP President Karen Ignagni said. [...]Total enrollment in HSAs has risen an average of 15 percent every year since 2011, AHIP said, with notable growth taking place in the large group market.
Indiana is currently attempting to navigate a middle course on insurance for the poor. The state has so far rejected adoption of a straight Medicaid expansion, as pushed by the Obama administration. Governor Mike Pence recently announced his willingness to expand Medicaid coverage to 138 percent of poverty line so long as the state fundamentally transforms the program. Unfortunately, the proposal fails to retain key reform elements that promote consumer responsibility and fiscal restraint -- elements that have been successfully tested under the Healthy Indiana Plan (HIP).
The original HIP demonstration project expanded Medicaid eligibility to adults with incomes up to 200 percent of the federal poverty level. New enrollees are offered high-deductible health coverage combined with a Personal Wellness and Responsibility (POWER) account, similar to an HSA, instead of traditional Medicaid.
In place since 2008, the demonstration program has about 40,000 enrollees who must match state deposits into their accounts with some of their own private savings. The participants use these accounts to pay for medical care below the insurance plan's deductible.
Independent evaluations of the plan have shown that the program is working very well. According to an evaluation conducted by Mathematica Policy Research, the low-income participants in the Indiana initiative found the HSA approach attractive. More than 90 percent of those who were eligible for HIP in 2008 and 2009 made their first monthly contribution, which is necessary to enroll in the program. In the first two years, only 3 percent of enrollees dropped out because they failed to pay their monthly contributions.
HIP has also been effective in promoting the use of cost-effective services. For example, 31 percent of HIP enrollees visited the emergency room in 2012, compared to 38 percent of adult enrollees in Indiana's traditional Medicaid-managed care program. In addition, 5 percent of HIP beneficiaries decided to go to an urgent care center or their regular doctor to seek care because of the co-pay required for nonemergency use of the emergency room.
Gov. Pence has proposed to expand the HIP approach to the entire nonelderly, nondisabled population on Medicaid in Indiana and to expand Medicaid eligibility up to the ACA's 138 percent limit. However, enrollees below 100 percent of the federal poverty line would no longer be required to contribute to their POWER accounts under HIP 2.0. The proposal offers incentives for individuals to instead opt to contribute to their POWER accounts in return for a richer benefit package, but the default is effectively traditional Medicaid.
The fact that Indiana is now in negotiations with HHS to move ahead with this plan reveals the drawbacks in the ACA and the merits of a more flexible alternative. Indiana has pioneered the use of HSA accounts and high-deductible plans to expand coverage with a decidedly consumer focus, and the results are very promising. Moreover, the proposal would not require beneficiaries to pay more than the minimal amounts allowed under current Medicaid rules. Yet, to move ahead with this approach, the state must engage in extended and nontransparent negotiations with HHS.
The alternative plan for covering the poor discussed in this paper would free the states from having to engage in extended negotiations with the HHS bureaucracy. States that want to enroll their Medicaid-eligible populations in HSA-like structures could do so without further federal approval or the inevitable strings that come with HHS-negotiated demonstration programs.
Posted by Orrin Judd at July 13, 2014 7:55 AM