How to fix Obamacare
I am in agreement with President Donald Trump on at least one thing. He is quoted as telling Republican senators that the House’s American Health Care Act (AHCA) was “mean” and whatever Senate Republicans come up with needed to be “more generous, more kind.” A recent Quinnipiac poll that shows only 17 percent of Americans support the House version of the AHCA. We have no idea what is being concocted behind closed doors by Senate Republicans.
However, what public debate that has occurred is still polarized between Republican “repeal and replace” versus Democratic efforts to protect the Affordable Care Act (ACA).
What isn’t being discussed is this: Given the real problems with the ACA, what reforms could be implemented to fix it rather that start over from scratch? There are a number of concrete things that could be done if both sides stop focusing on extreme ends of the spectrum.
Expand Medicare coverage to begin at age 55.
There are a host of reasons to do this. First, Medicare under the ACA introduced delivery system reforms that improved the quality of patient care while reducing cost and enhancing efficiency. As a result, Medicare per capita spending only increased by 1.4 percent annually from 2010-2015 versus 3 percent for private health insurance.
Second, Medicare puts more funds into medical services versus administration. A 2006 Council for Affordable Health Insurance paper reported Medicare spending on administration was 5.2 percent. On the other hand, 16.7 percent of funds in private insurance go to administration, taxes and profits paid to shareholders.
Third, health care needs markedly rise as people enter the 55-64 age category. Annual per capita spending on health care is $599 for individuals ages 45-54, but it goes up to $901 for the 55-64 age group.
Having Medicare kick in at age 55 would lower private insurance premiums to cover younger populations who utilize fewer services without eliminating current ACA preexisting conditions protections or services like mental health and substance abuse treatment. This premium reduction would be partially offset by an increase in Medicare payroll taxes paid to cover the expanded population covered by Medicare.
The biggest obstacle to this proposal would be the potential impact on Social Security. Forty percent of eligible individuals claim benefits at the early retirement age of 62 and another 34 percent do so at age 65 when Medicare currently kicks in. If suddenly 75 percent retired at 62 because they had Medicare benefits, the increased Social Security benefit payments would be a deal breaker. As a result, in order to expand Medicare coverage, there would likely have to be a gradually phased in rollback of the minimum retirement age to 65.
This proposal contains elements that leave individuals on the far right or far left unhappy. But if we want a stable health care funding system, compromises towards the middle will be needed. And lack of stability regarding what will happen to the ACA is one of the major reasons insurers cite for pulling out of current ACA state marketplaces.
It is critical for all of us to write not only the Democratic senators from Illinois but also our downstate Republican representatives who will have to vote again on any compromise bill that comes out of the Senate with regards to the balanced proposals we think they should endorse. Otherwise our health financing policy will gyrate from one extreme to the other to the detriment of all.
Dr. Stephen Soltys of Springfield is a retired professor emeritus who still teaches on a volunteer basis at the SIU School of Medicine.