President Donald Trump, in a recent op-ed for USA Today, argued against the left’s Medicare for All idea. The president highlighted administration efforts to expand choices in health care and lower premiums.
The president’s Cabinet also is doing much to use its authority to advance these goals. These are good incremental improvements, but more needs to be done.
While the administration deserves credit for taking steps to provide relief from Obamacare’s damage, the private individual insurance market itself remains broken, crippled by that law’s ongoing heavy mandates.
This year, more than half of all U.S. counties have only one Obamacare insurer. Premiums doubled in the first four years of Obamacare. Last year, the average monthly premium for individual insurance was $476 per person, per month in the 39 states participating in Healthcare.gov.
The Trump administration reports that premiums for benchmark silver plans sold on the federal Obamacare insurance exchanges have dropped by 2 percent on average. That figure buries some really great news at the state level, where some states are seeing much larger premium reductions than others.
Some of the premium swings in states such as Michigan are just natural price corrections. Last year, the Trump administration changed how Obamacare subsidizes insurers, and some companies reacted by raising prices higher than it turned out to be needed. So they’re course-correcting to a slightly less exorbitant (but still high) rate.
The biggest reason premiums are falling? Freedom from Obamacare’s mandates.
Original research by The Heritage Foundation shows that if states get even a little bit of freedom from Obamacare’s mandates, they can bring costs down. Some states have been able to make small changes to the way they address high health costs by getting waivers from just a few of Obamacare’s rules.
The result: In 2018, the cost of the lowest-priced bronze policies rose by 16 percent nationwide. But the same policies fell by as much as 38.7 percent in the two states that obtained waivers from Obamacare’s mandates.
Next year, seven states that have waivers estimate premiums will be 7 percent to 30 percent lower than they would be without the waiver–all without new federal spending. And all the approaches used to achieve these cost cuts relied on tools that help those with pre-existing conditions get access to care.
Congress should build on this lesson to lower costs and improve choices. The limited administrative relief available under Obamacare has provided promising beginnings in a few states, but states still are locked into the fundamentally flawed Obamacare framework.
To really turn things around, Congress needs to act by providing states the flexibility and resources they need to revitalize their managed private markets in health insurance.
Earlier this year, conservatives successfully stopped a congressional effort to bail out Obamacare.
Advocates of the bailout said new money was needed to lower costs and “stabilize the market.” The Heritage Foundation and Heritage Action, among others, argued the opposite: The solution to Obamacare’s higher costs and reduced choices isn’t shoveling more and more tax dollars into insurance companies’ pockets. What does help: flexibility from Obamacare’s mandates.
Conservatives have a plan to do just that. The Health Care Choices Proposal, crafted by state and national leaders, could lower costs for individual coverage by up to 32 percent, according to an independent analysis of the plan.
The proposal would undo heavy-handed Obamacare regulations. Instead, it would give everyone the option of accessing private coverage of their choice–even those on Medicaid, who Obamacare left behind.
The proposal also would roll back Obamacare’s perverse spending structure, which rewards high premiums by matching increases with federal dollars. Instead, the plan would give states the flexibility they need to achieve the goal of expanding choices. They could start by using existing funds in better, more flexible ways to begin to restore their broken private markets.
The president endorsed this concept in his budget this year. Congress should pick up this important work, build on the administration’s successes, and deliver real cost cuts and improved choices.
