A look ahead: What the 2020 election could mean for health care
Let’s explore two remaining presidential candidates' positions on and visions for health care reform.
The U.S. health care system is broken. Over the years, the system has become very expensive and difficult for individuals to navigate; in fact, more than 27 million people in the U.S. are without any type of health insurance. For these individuals, the cost of care alone can exceed their financial resources – putting many at risk if they should become ill.
The basic employer driven health care benefit system that we live in today is a legacy of World War II–and for the first 60 years, it worked well. The majority of health care costs were covered by the health plans, premiums were largely paid by employers, and low copays and deductibles were manageable for most. However, over the past 20 years, the cost of health care has gone up significantly with increasing premiums, deductibles and out-of-pocket costs.
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There are a few reasons for this increase, the first being the consolidation of health care providers–which has had a dramatic impact on communities across the country (especially those in less populated areas). With limited or no health care options, providers can drive up health care costs on the supply side.
The second reason for increased health care costs is the fact that the pharmaceutical industry is essentially not cost regulated in the U.S. Therefore, prescription costs are high and continue to grow year over year.
The third reason is that, for individuals who obtain health insurance through their employer, the higher health care costs are increasingly being moved from the employer to the individual through high deductibles, out-of-pocket expenses, shifting of premiums and surprise billing from non-covered health care events. This is particularly impactful because the system is not built for individuals to effectively manage the resulting financial burden.
Just as there are different reasons for the increasing cost of health care, there are also a range of approaches to address and fix our health care system. There is reasonable, bipartisan consensus that changes should be made to ensure that individuals have access to affordable health care. With the passage of Obamacare in 2010, Donald Trump’s “Trumpcare” Executive order in 2017, and Bernie Sanders’ call for “Medicare for All” during the 2019 democratic primary – the nation’s health care system has become the cornerstone of political debates and legislation. In fact, a recent Kaiser Family Foundation poll found that health care is among the top issues for undecided voters in the 2020 presidential election.
Each candidate has a different approach to addressing voters’ concerns in regard to health care, so let’s explore the position of the two remaining presidential candidates.
Democratic nominee: Joe Biden
Joe Biden was Vice President when the Affordable Care Act (ACA) was enacted and remains a strong supporter. So overall, I predict that we will not see a directional change in his approach to health care now that he is the democratic nominee.
However, from what we’ve seen during his primary campaign he may differentiate his approach in certain areas. Here are the key changes that Biden’s campaign has focused on:
- In addition to the current private health plan options, offer a public health plan option similar to Medicare.
- Expand coverage to low-income Americans, increase the value of tax credits to lower premiums, and extend coverage to more working Americans.
- Take steps to eliminate surprise bills.
- Address the market concentration that has occurred across the health care practices and work with the industry to improve health outcomes and lower costs.
- Work to control increases in drug prices by making the pharmaceutical industry negotiate with Medicare on prices, control pricing for new drugs with no competition, allow people to purchase drugs from other countries, implement price increase limits, and increase the supply of quality generic drugs.
The general theme to Biden’s plan for health care is to increase access, drop costs and make health care more affordable within its current framework. Biden’s plan specifically focuses on addressing supply-side challenges by controlling prescription drug costs and taking steps to negate the cost impact that has come from industry consolidation. He also touches on a very hot topic–surprise medical bills–which is an increasing challenge to consumers as a high number of in-network medical facilities provide out-of-network services, resulting in large bills to consumers.
Republican nominee: President Donald Trump
As of this writing, a specific health care reform plan has not been put forth by the current administration. However, the recently published 2021 fiscal budget does provide guidance on the general direction that the administration would like to push health care. Some key points that this document speak to are lowering drug costs, ending surprise medical bills, protecting individuals with pre-existing conditions, reducing regulations, improving the transparency of health care costs, and increasing competition.
To better understand the direction of the administration and the Republican Party, it is instructive to look at the work done by the Republican Study Committee – a caucus of conservative members in the U.S. House of Representatives – on health care reform. Their work covers a broad range of items, including:
- Not allowing insurance carriers to rescind, increase rates, or refuse to renew a person’s health insurance if they should develop an illness after enrollment.
- Eliminating the ACA’s essential health benefits, annual lifetime limits, preventive care with no cost-sharing, dependent coverage, and metal actuarial tiers (bronze, silver etc.) and allowing states to prescribe these principles.
- Restructuring the ACA’s premium subsidies and Medicaid expansion federal matching programs to fund state-administered grants to subsidize health insurance.
- Changing the tax code to provide for equal treatment of employer and individual health insurance markets.
- Expanding the use of pre-tax Health Savings Accounts (HSA), including using them to pay for insurance premiums. Increasing allowable yearly contributions from $3,500 to $9,000 for individuals and from $7,000 to $18,000 for families.
- Extending portability protections (contained in the 1996 Health Insurance Portability and Accountability Act for employer-sponsored health insurance) to the individual market.
- Promoting the use of innovative health care solutions such as telemedicine, direct primary care, association health plans, and health sharing ministries.
Overall, this approach can be loosely summarized as a plan to make changes to the tax code that impact the affordability of health care, handing more control of Medicare spending to the states, reducing regulation, and promoting innovative approaches to delivering health care–all which leaves the current system largely intact. While the above is not Donald Trump’s plan, it is reasonable to believe that some of these components will be reflected in his approach to health care reform as we head into the election season.
With November approaching, I anticipate the conversation around health care and health care reform to be widely discussed by both presidential candidates. Our health care system was broken prior to March 2020, and the current COVID-19 pandemic has put an enormous amount of strain on an already shaky system. It is imperative for our leaders to look at every possible solution to help ensure the wellness of every American – not just health-wise, but financially as well.
Tom Torre is CEO of Bend, which specializes in providing health savings accounts for individuals, employers and partners.
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