Repeal and Replace: With What? - Part 2 - Is This a Crazy Idea?

Last time, I mentioned that the Trump election has put new life into the Republican theme of repealing and replacing the Affordable Care Act (ACA).  In that blog post I considered whether healthcare coverage is a right and concluded that it’s hard to turn our backs on the plight of people with significant health needs and that society should provide at least a baseline of care.

If Obamacare is repealed, what should replace it?  Before I answer that, let’s look back at two of primary drivers that brought health insurance issues into the public’s consciousness in recent decades.

  • Charges of hospital emergency rooms “dumping” patients in the 1980s.  Some highly publicized cases where hospitals allegedly dismissed uninsured patients from ERs without properly stabilizing and treating them led to public outcries.  The resulting deaths fed into the momentum behind what became the Emergency Management and Treatment of Active Labor Act of 1986 (EMTALA).
  • The phenomenon of people literally being bankrupted by crushing medical bills triggered by catastrophic medical needs.

There were other reasons behind healthcare becoming a national issue, but both these phenomena played a major role.  Addressing these two red flag needs – something the ACA has only partially done – would be a huge step toward fixing our system.  

So here is my proposal.  Why not create a publicly funded system for all US citizens that offers emergency/preventive/primary care and catastrophic care (covering all costs in excess of $15,000 or $20,000)?  This approach could also fold in parts of Medicare and would be partially funded by redistribution of some public money from existing programs like ACA, Medicare and Medicaid.

Even though this plan addresses the twin concerns listed above, it would still leave patient responsibility for co-payments and would leave a big gap for secondary care.  These gaps could be handled by the existing private insurance market.  Employers and individuals in the private insurance market could redirect the money they currently spend for comprehensive care (which includes all of the following:  emergency, primary, secondary, and catastrophic care) to filling the gap.  Similarly state Medicaid programs may elect to provide supplemental coverage.  Like existing MediGap plans, these new “gap” programs would provide supplemental coverage for allowable services. 

Since part of employers’ costs would be off-loaded to the new national emergency/preventive/ primary/catastrophic plan, some of what they had been spending could be redeployed to support the public plan.  If crafted carefully, the program could be essentially budget-neutral to employers. 

The advantages of this plan include:

  • Guaranteed access to baseline emergency, preventive, primary and catastrophic care for every citizen, including increased access for currently uninsured and Medicaid patients, since all citizens would be covered by the same plan.
  • Less dependence on prohibitively expensive emergency care since all citizens would have equalized access to preventive and primary care

Many, many details would have to be worked out for this to work.  It would be important to design benefit levels to essentially replicate the total public and private costs to the existing system.

What are the chances of this plan being enacted?  Probably as great as my chance of winning the 2017 Tour de France.  But this is a starting point for discussion.  What do you think?