Two months ago, the American people gave lawmakers a clear mandate: Save our nation’s health-care system from the harmful effects of Obamacare. They’re sick of exorbitant premium increases. They’re frustrated with insurer drop-outs and narrow provider networks that stifle access. They want change, and they want it now.
Congress’s votes last week on a budget were the first steps toward repeal. Last January, Congress passed, and President Obama vetoed, a reconciliation bill that would eliminate more than $1 trillion in Obamacare tax increases and wind down spending on the law’s new entitlements by the time Congress can pass more sensible health-care reforms.
Now, with Republicans set to take control of all the White House, that bill could be passed again and signed into law. Some have argued that doing so this year would disrupt the health-care industry, prompting insurers to exit more markets and leaving the American people in the lurch. But these critics should first acknowledge that Obamacare is leaving millions of Americans in the lurch right now. In one-third of counties, Americans have a “choice” of only one insurer on their Exchange.
That said, conservatives must proceed carefully when unraveling the government mandates crippling our health-care system. Thankfully, as I outline in a report released today, Congress and the incoming Administration have numerous tools at their disposal to bring the American people relief.
As it repeals Obamacare, Congress should work to expand the scope of last year’s reconciliation bill to include the law’s costly insurance mandates. Because reconciliation legislation must involve matters primarily of a budgetary nature, critics argue that the process cannot be used to repeal Obamacare’s insurance regulations, and that leaving the regulations in place without the subsidies will collapse insurance markets. But Congress did not attempt to repeal the major insurance regulations during last year’s debate; it avoided the issue entirely. Consistent with past practice, Senate procedure, and the significant fiscal impact of the major regulations, it should seek to incorporate them into the measure this time around.
Congress should also include provisions in the reconciliation bill freezing enrollment in Obamacare’s Medicaid expansion upon its enactment. Currently eligible beneficiaries should be held harmless, but lawmakers should begin a path to allow those on Medicaid to transition off the rolls and into work. In a similar vein, Congress should also explore freezing enrollment in Obamacare’s insurance subsidies, provided doing so will not de-stabilize insurance markets.
The Trump administration has an important part to play as well, as it can provide regulatory flexibility to insurers and states — even within Obamacare’s confines. For instance, Obamacare gives the secretary of health and human services the sole authority to determine the time and length of the law’s open-enrollment periods. In both 2016 and 2017, those periods stretched on for three months, meaning that for at least one-quarter of the year, any American could sign up for insurance — no questions asked — immediately following a severe medical incident.
Congress and the Trump administration have many tools at their disposal to provide an orderly, stable transition toward a new, better system of health care.
To guard against adverse selection — whereby more sick individuals than healthy ones sign up for coverage, raising insurance premiums for everyone — the Trump administration can significantly shorten enrollment periods. Next year’s open enrollment should last no more than 30 days if logistics will permit. Similar actions would restrict special enrollment periods that individuals have gamed under Obamacare, purchasing coverage outside open enrollment, racking up medical bills, and then cancelling their coverage. The Trump administration can eliminate special enrollment periods not required by statute, and require verification prior to enrollment in all other cases.
Another place for regulatory flexibility lies in the 3.5 percent “user fee” assessed for all those purchasing coverage on the federal exchange. In regulations released last month, the Obama administration essentially admitted that the actual cost of running the federal Exchange has dropped below 3.5 percent of premiums, but kept the “user fee” at current levels to increase funds for enrollment and outreach. The Trump administration should lower premiums by cutting user fees to the amount necessary for critical exchange functions, rather than spending hard-earned premium dollars promoting the partisan agenda the law represents.
The Trump administration can take other actions within the scope of Obamacare to provide a stable path to repeal. It can withdraw the mandated coverage of contraceptive services that raises premiums while forcing individuals and organizations to violate their deeply held religious beliefs. It can expand and revise the scope of essential health benefits, actuarial value, and medical-loss-ratio requirements to provide more flexibility for insurers. It can immediately withdraw guidance issued by the Obama Administration in December 2015 that paradoxically made an Obamacare “state innovation waiver” program less flexible for states. And it can build upon legislation Congress passed last month, which allowed small businesses to reimburse their employees’ insurance premiums without facing thousands of dollars in crippling fines, by extending the same flexibility to all employers.
Congress and the Trump administration have many tools at their disposal to provide an orderly, stable transition toward a new, better system of health care — one that focuses on reducing costs rather than expanding government control. They can and should use every one of these tools to bring about that change, fulfilling the promise of repeal.