In Part I of this post I described in general terms the Republican plan to replace ObamaCare as put forth in a bill sponsored by Rep. Pete Sessions and Sen. Bill Cassidy known as the Sessions-Cassidy plan. In Part II I discussed how this plan improves over ObamaCare. In Parts III and IV I will discuss the twelve specific ways this plan solves the problems of ObamaCare.
Twelve Ideas For Better Healthcare
Relying heavily on the work of economist John C. Goodman, I will list the twelve ideas in the Sesssions-Cassidy plan that he says will improve healthcare.
- A Universal Health Tax Credit
This credit varies by age and geography, but not by income. It will average $2,500 per adult and $1,500 per child in 2017. This should give almost everybody access to a private plan similar to a well-managed Medicaid plan. It can be used to pay for health insurance premiums and deposits to an HSA account. It is advanceable, refundable, assignable and independent of income.
- Advanceable – you can get it monthly without waiting for April 15th
- Refundable – you can get it even if you have no taxable income
- Assignable – you can turn it over to an employer or insurance company to do the paperwork.
- Independent of income – you get it regardless of your income.
- Limited Benefit Insurance
Individuals may receive a portion of the tax credit when they choose a plan that includes a limited amount of income and asset protection. These plans will cover most of their expected medical costs – but not all. Hospitals will still need to find ways to pay for rare and expensive cases. This provision is to allow low-income families to purchase insurance within their budget. Any savings above the tax credit amount could be applied to a health savings account.
- Health Status Insurance
This protects people with pre-existing medical conditions. It calls for risk adjustment between health plans (similar to Medicare Advantage) that will insure each plan receives an actuarially fair premium when accepting an enrollee from another plan. This will eliminate the practice of insurers of selectively seeking the healthy and avoiding the sick (as happens today with ObamaCare .)
- Roth Health Savings Accounts
These HSAs will be flexible, allowing individuals to wrap them around any third-party insurance plan (which is not allowed today.) Above the tax credit amounts, premium payments and HSA deposits will be made with after-tax dollars. This will allow individual self-insurance and third-party insurance (employer-provided) to compete on a level playing field, which will lower prices. Also, individuals will be able to save for future healthcare and take an active role in determining how they spend their healthcare dollars.
- A Workable Safety Net
A portion of unclaimed tax credits (those who remain uninsured by choice) will go to safety net institutions in communities where the uninsured live. For the first time, federal tax relief for private health insurance and federal support for safety net care will be completely integrated.
Insurers will make their provider networks known in real time and on line. The current practice of “bait and switch” (advertising a broad network and then narrowing it after enrollment) will be prohibited. Plans that impose high costs on enrollees for specialty drugs must disclose the fees in a very visible way prior to enrollment.
(In Part IV I will list six more ideas that improve healthcare over ObamaCare.)