How Health Policy Experts Would Fix Obamacare

And what they want states to do while Congress tries.

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Protesters outside the U.S. Capitol as the Senate votes on health-care legislation.
(AP/Bill Clark/CQ Roll Call)
With a dramatic thumbs down from U.S. Sen. John McCain late last month, the effort to repeal and replace the Affordable Care Act (ACA), President Obama's signature achievement, appears to be over -- at least for now.

Since President Trump took office in January, Republican members of Congress have put forth one proposal after another to make good on their promise to repeal Obamacare. After months of failed attempts and McCain's call for bipartisanship, Republicans in the House and Senate have signaled they will work with Democrats to fix problems with the health-care law.

But what do actual health policy experts want to see going forward?

Governing spoke to five across the ideological spectrum about what they hope comes out of these talks and what states should do about health care in the meantime.

A universal wish from all five experts is for the Trump administration to keep funding cost-sharing reductions (CSRs), which pay for the insurance subsidies that lower the cost of premiums on the marketplace. Trump, however, tweeted last week that he will stop funding CSRs -- which he referred to as "BAILOUTS for Insurance Companies" -- if Congress doesn't repeal Obamacare "quickly."

The following interviews have been edited for clarity and length.

What kinds of policy do you want to see come down from the federal government?

I’d like to see states have more authority and autonomy with the Medicaid drug benefit. Let's take Hepatitis C for example: It’s a fairly priced drug for a pretty serious condition. So someone gets a 12-week drug regimen, and at the end of the process, they’re thought to be cured. But some of our concerns are: What if a beneficiary is an active IV drug user [which would put them at a higher risk of contracting the disease again]? What if they don’t have a fixed address? In the current state of affairs, that’s all federal Medicaid’s responsibility. But states want to be able to contract with someone -- either a pharmacy, community health worker, or home health organization -- to make sure that we’re not just paying for the drug, we’re paying to get someone cured. 

I’d also like to empower states to think about how we pay for federally-qualified health centers a little differently. The direction that Medicaid is going is toward value-based pricing. In other words, paying people more for doing the right thing. If you’re a provider stuck in the dark ages, quite frankly we should pay you less. But right now, federally-qualified health centers are mandated to be paid at a certain level. If they improve, we can pay them more -- but we can’t pay them less. 

What does state-level Medicaid innovation look like these days?

If there’s anything true about the reforms happening now, it's that they're difficult. Essentially we're telling people that what they’ve been doing -- in this case, fee-for-service payment -- has failed and we need a new business model. It takes a lot of change and a lot of change management.

It’s worth noting that when you ask people who are frustrated about health care, it’s almost universally about the marketplace or private insurance. You’re not really hearing them complain about Medicaid. There are real challenges with the ACA, and let's address them. But taking $800 billion out of the Medicaid budget [Trump's budget proposed doing so] is not the way to do that.

What should Congress do with the ACA?

Something like getting rid of the employer mandate. I know the right doesn’t like it and the left should be willing to trade off on it. 

In certain geographic areas, premiums are quite high. It tends to be in places where population density is low and in areas with one or two insurers. So an idea to lower other out-of-pocket costs could be borrowed from the Medicare program: Under Medicare advantage plans, if you go to a doctor outside of your network, there’s a cap on what those payments can be. The insurer pays the traditional Medicare rate, but the provider can’t charge whatever they want. If there’s a cap, at least they won’t have patients over a barrell. It also makes it easier for other providers to come into the market because if you know there’s a maximum to make, it’s easier to gain marketshare. 

What can states do in the meantime?

  1. States could set up a reinsurance mechanism [a reimbursement system that protects insurers from very high claims and lowers premiums]. They would have to fund it, and while that’s certainly possible, they would need that revenue stream up front. [The Trump administration recently agreed to help fund Alaska's reinsurance program.]
  2. Work on enrollment and outreach efforts. It’s a relatively cheap but important piece to stabilize the marketplaces. [Trump recently pulled ACA enrollment and outreach funding for 18 cities.]
  3. I know Massachusetts has an individual mandate on the books. If the federal one goes away, you could make sure your state has a law on the books.
We hear from a lot of governors and state legislators that they just don’t believe in this notion that they should allow people who aren’t super poor into Medicaid. So if Congress allowed states to expand up to just 100 percent of the federal poverty line [instead of 138 percent of the federal poverty line that the ACA mandates], that could bring in other holdout states, and they could enroll those populations on the private marketplaces [a model of Medicaid expansion that's popular among GOP states]. Also, those populations would have more financial assistance on the marketplace, so the more likely they’d enroll. So you’re also strengthening the marketplace by doing that.  

What should Congress do with the ACA?

Getting rid of the individual mandate is somewhat practical, but it does open up other questions. My proposal is to bite the bullet -- get rid of the mandate -- and if people don’t at least get minimal insurance, let insurers make them pay more for coverage down the line when they do enroll. That incentivizes continuous coverage. 

We’ve spent so many years arguing, but we need to straighten out the delivery system and get people healthy. Everything else is just noise. We have to recognize the limits there, prioritizing who gets more help and who gets less help. But it’s not supportable to say everyone gets a taste. 

What could states do in the meantime?

Until people know what something costs, they’ll never ask if it's worth it. Once they realize what things cost, they’ll recognize the cost-benefit analysis. Ohio is trying to implement a price transparency law, but it's facing major opposition from state medical groups, which has been interesting to watch.

What should Congress do with the ACA?

Well every bill we saw included stabilization funding for the marketplaces. I think everyone agrees that’s a good idea. 

Enforcing the individual mandate is necessary until someone comes up with a better idea.

Jim Capretta [a health policy analyst with AEI] talks about auto-enrollment. I think that’s an interesting idea, and I’m open to that.

But right now, let's enforce the law.

What could states do in the meantime?

Work on enrollment. Talk to insurers to keep them in the market, and ask them what they need. States should be putting in money to get people enrolled because the federal government won’t. It isn’t a huge budget item, and it’s a good thing to do. 

Expand Medicaid. I think we’ll see some traction there in Kansas, North Carolina and Virginia. Once that happens, I think more states will pursue it. 

What should Congress do with the ACA?

We’ve done a lot to get kids enrolled, and we want to continue in that direction by thinking about the gaps we want to fill. There’s a million kids in the marketplace, how can we make those marketplace plans better for them?

Also, we’re still seeing a lot of kids not getting regular cleanings, so we'd like an expansion of dental coverage. 

What could states do in the meantime?

In theory, states can do a lot. But in practice, if I were running a state Medicaid program, I think it’d be hard to make changes. But there are demonstrations around home health care and medical homes that states can try, although you need quite a bit of bandwidth to pull that off. 

New York has done a lot of work around value-based purchasing that helps kids, so I would want more states to take a look at that. 

*CORRECTION: A previous version of this misstated Tom Miller's first name.

*This has been updated to clarify comments from Tom Miller.

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Mattie covers all things health for Governing.

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