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With the new president pledging to throw out the Affordable Care Act, he must be careful not to end up with a plan equally as unpopular.
Dr. KaplanAs someone who believes in healthcare for all Americans, even I know the Affordable Care Act (ACA) falls short. It turns out the ACA isn't so affordable. But there are a couple of popular aspects of the ACA (aka Obamacare) that will make it exceedingly difficult for Congress or President-elect Donald Trump to repeal the law entirely. Some aspects will have to stay and if you're not careful, your replacement plan will put you right back where you started: with Obamacare.
Further reading: How will the Trump Administration change healthcare?
What about the parts people like?
Obamacare is easy to dislike. It didn't transform healthcare or lower costs. The plan essentially just gave more people Medicaid, which was never the right answer. Medicaid is state/federal insurance for the poor that reimburses facilities and doctors so badly in many places that it's difficult to find a doctor who accepts it. Sure, you can blame “money-grubbing doctors,” but if any business doesn't bring in enough money to cover costs, that's a problem. And doctors aren't as rich as many people think.
But Obamacare did two things that were well received. First, the law allowed young adults to stay on their parents’ insurance until the age of 26. Who wouldn't like that? Second, it made it illegal for an insurance company to deny coverage based on a pre-existing condition. All very noble. There's only one problem. Those are very expensive mandates for insurance companies.
Obviously, I'm not losing sleep over the insurance companies' well-being but there is a very real economic impact of allowing everyone to get coverage, regardless of a pre-existing condition. Keep in mind that not only can you not be denied coverage, but the insurance company can't charge you more for that coverage. That means it costs more to cover a sick person with a pre-existing condition than what they will pay in insurance premiums. Therefore, the money to cover that person comes from other, healthier folks.
Next: What is the right thing to do?
In essence, you have healthy people paying more for coverage that they're not using to help out the sicker people in the insurance pool. To help people afford their more expensive coverage that in turn supported sicker individuals, the government subsidized many of the people buying insurance on the exchanges.
Health law news: Doctors get new flexibility in Meaningful use reporting
So if you want to repeal all of Obamacare that means kids aren't covered until they are 26. It also means you can deny people coverage because of a pre-existing condition. Oh, you like those parts and want to keep them? Keeping young adults covered until they’re 26 shouldn’t be a problem. But you will still need to subsidize individuals purchasing insurance so they can afford the more expensive insurance that covers sicker Americans and those with pre-existing conditions. Does this "new" legislation sound familiar? Yes, it's Obamacare 2.0. Same thing, different name.
So what’s the answer? If it were simple it would’ve been done by now.
You can start by subjecting healthcare to market forces. That means increased competition among insurance companies by selling across state lines, and by promoting price transparency amongst doctors, outpatient clinics, radiology facilities and labs. These are typically out-of-pocket costs and if the consumer can choose, competition will ensue and you’ll bend the cost curve.
Increased competition will lower costs for everyone which will be a major improvement and benefit over the current ACA environment. Will the cost savings be enough to eliminate government subsidies that were necessary in the past to cover those with a pre-existing condition? No, I don’t believe cost savings alone are enough to eliminate subsidies but will certainly reduce the amount of the subsidy. In the end, legislation will still need to retain this signature aspect of Obamacare. I hope Congress understands that.
Jonathan Kaplan, MD, MPH, is a board-certified plastic surgeon based in San Francisco, California and founder/CEO of BuildMyBod, an online marketplace for healthcare services that allows consumers to determine cost of out-of-pocket procedures, and purchase non-surgical services from its database of over 250 healthcare providers that believe in price transparency.