It’s hard to believe, but only five years ago Republicans controlled all three government branches and were widely expected to repeal the Affordable Care Act (ACA). So much change makes it difficult to take everything in, much less understand where policies important to health insurance executives can be advanced.
Predictions are by nature risky, but by looking at the entire political landscape, we can make several educated guesses about the potential for the passage of a Medicare for All bill, a similar push for Medicare for More, and the likelihood of new restrictions on short-term limited-duration plans.
We can also look at several areas where health insurance executives can focus their efforts to effect favorable change, such as turning recent state executive orders into permanent policy reforms and the expansion of direct primary care (DPC) networks as an alternative to traditional third-party payer insurance for non-catastrophic care.
Medicare for All? For More?
With the number of progressives currently in Congress, we’ll likely continue to hear strong arguments for Medicare for All. However, the current composition of both the House of Representatives and the Senate means that outcome is doubtful. The Senate would need every Democrat plus 10 Republicans to get past the filibuster. Even if the filibuster is eliminated, there’s a good chance Democrats would fail to convince conservative members like Joe Manchin to vote for universal coverage. Similarly, the majority margin in the U.S. House is thin, potentially preventing some of the more ambitious portions of the progressive agenda from dominating.
The other sticking point regarding Medicare for All passage is the number of Americans who currently receive health coverage through their employer: 175 million. As flawed as the current third-party payment system may be, it’s hard to imagine a scenario in which Congress passes legislation that eliminates private insurance altogether.
All of which brings us to Medicare for More, with various age and/or income qualifications. The Medicare at 50 Act proposed by Michigan Democratic Senator Debbie Stabenow in February 2019 establishes a Medicare buy-in option for those 50 to 64. In November 2020, President-elect Biden advocated for lowering the eligibility age from 65 to 60. Some experts advocate for folding the Medicaid program into the Medicare program to help low-income families.
There are many strong arguments against the Medicare for More idea, including higher costs, healthcare rationing, and diminished healthcare quality. The most compelling, however, is that it would open the door wide to universal coverage.
To see how that would play out, we can look at the Florida property insurance fiasco a few years ago. In 2007, Citizens Property Insurance, a public property insurance option, was reformed by then-Gov. Charlie Crist. He opened up Citizens to individuals not able to purchase private property insurance, allowing them to obtain insurance from Citizens at a price-controlled, subsidized rate. In a hurricane-prone state with 1,300 miles of coastline, this was an interesting experiment, to say the least.
Between 90% and 95% of Florida’s population lives within an hour of the coast, and they understandably took advantage of the price-controlled rates. This effectively put the private-insurance market into a death spiral, and the state-run company had to implement assessments on every insurance policy in the state for about 10 years — public policies, private insurance, property insurance, life insurance — every insurance policy issued in the state of Florida had an assessment on it so the state-run public option did not become insolvent.
Fortunately for Florida, lawmakers eventually enacted reforms that brought the public option back from the brink and turned it into the insurer of last resort — the original intent of the program. Of course, there’s is a huge difference between the state of Florida and the federal government: like most states, it’s required to have a balanced budget.
One extremely important thing to remember is that the need for Covid-relief bills has exploded the national debt and left Republicans with less of an ability to take the high ground on fiscal prudence. That makes the uphill battle against Medicaid for More a tougher climb.
One more piece of bad news before we look at areas to focus on relates to short-term limited duration plans. First, some background. The Obama Administration restricted these plans to no more than three months without the ability to renew them, making them essentially useless. The Trump administration revised that rule and allowed these policies for up to 12 months with the ability to renew multiple times. This approach, and that rule, did offer some relief to those in the individual market who were able to leverage them.
In a recent presentation on those plans, I heard from a self-employed businesswoman in Ohio, and she was able to secure decent coverage via those plans for roughly $485 per month with a $5,000 deductible. That contrasted with $2,800 a month on the Exchange with a $6,000 deductible.
The bad news is that the newly-confirmed Secretary of Health and Human Services, Xavier Becerra (until his nomination, he was California’s Attorney General) is extremely progressive. It’s important to note that California regulations on short-term limited-duration plans are far more restrictive than the federal guidance and rules. Essentially, Becerra does not like short-term limited duration plans because they provide a market-based option to Exchange plans, and he is a proponent of universal socialized healthcare coverage.
‘Make it Permanent’
One place conservatives and advocates for private insurers can score some wins is by shifting the debate from one on health insurance to one on healthcare provision. Becoming mired in discussions about public versus private options is not the best avenue, nor is a focus on keep the status quo for short-term limited-duration plans because Becerra is bound to attempt to reform them.
Instead, we can work to make Covid-related state executive orders permanent. Over the past year, governors from both parties and across the ideological spectrum issued executive orders aimed at freeing up resources to help respond to Covid-19. They included things like suspending certificate-of-need laws, authorizing telemedicine, expanding the scope of practice for nurses and pharmacists, and allowing licensed healthcare professionals from other states to practice across state lines.
Each of those changes serves to increase the supply of providers, incentivize competition for services, lower costs, and expand innovation — all the things that conservatives have been talking about for years. A big push for state legislators and industry associations should be to make those executive orders permanent policy reforms.
In Florida, the legislature enacted almost all those reforms between 2019 and 2020. Thus, the focus of my efforts over the next two years is going to be working with think tanks across the country and state legislatures to “Make it Permanent.”
Expand direct primary care networks
The other major area where we can press forward is the expansion of direct primary care (DPC) networks as an alternative to traditional third-party payer insurance for non-catastrophic care for people outside of employer-based networks. Collectively, we should be working together to embrace this option and expand it in any state where it looks like the policy reform can move. To the extent that a state can enact policy that distinguishes DPC from traditional insurance, this will continue to gain momentum as an alternative to those seeking coverage in the individual markets.
To give you an example of how this might look, Florida this year expanded the scope of practice for qualified nurse practitioners so they can practice independently. A friend of mine who met the requirements set up a DPC practice and combined it with her growing yoga studio. For a small flat fee per month, she offers a basic set of primary care services (available 24 hours a day) plus unlimited yoga. She next partnered with a friend who has a small mental health practice, so by the end of Q2 2021, the practice will also be offering counseling in-person, over the phone, or over Zoom.
Even amid the craziness of the election, and the pandemic and the riots, all is not lost. We continue to see opportunities to press forward on policy, but we must be mindful of where our efforts are going to have the most impact. Along those lines, my last admonition is that it’s time to pay closer attention to not just your congressional delegation, but the makeup in the composition of your state house and senate.
Think tanks across the country have been making the case that in the era of federal gridlock, state legislators are, without question, the place where substantive policy can be advanced. It’s not all unicorns and ice cream — the work ahead will be a challenge. But if those of us who sincerely believe in the power of markets and choice continue to press ahead together, I believe we can turn the tide for the greater good on healthcare.