GOP presidential candidate Mitt Romney recently provided more details on his own health reform plan, stating that if elected, on his first day in office, says he will issue an executive order for the federal government to issue health reform waivers to all 50 states, and immediately work on repealing the health reform law passed in March 2010.
His repeal strategy is based on these principles: (1) allowing states to craft their own specific health reform plans; (2) reducing health costs through pro-market measures; and (3) increasing consumer driven health options. His campaign charts out his legislative goals at http://www.mittromney.com/issues/health-care.
In the New England Journal of Medicine, Romney writes that he: (1) supports insurance exchanges; (2) would allow individuals enjoy the same tax benefits that employer groups get when buying group coverage; (3) proposes a system of voucher to seniors to pay for coverage instead of Medicare; and (4) would use block grants to fund state Medicaid programs.
Romney’s campaign on Sept. 27 delivered a scathing assessment of President Obama’s health reform law. It says that reform as actually implemented has fallen far short of several of Obama’s and Congressional Democrats’ promises. In “Leaving the Obamacare Fantasyland,” the campaign says, the reform law is: (1) forcing people to change out of the insurance they have; (2) ineffective on cost control; (3) generating huge tax increases on providers, device and drug makers, health plans and insurers; and (4) slashing Medicare, which would force many seniors to change the coverage they have.
In order to remedy the “rampant confusion,” “disastrous design” and “broken Medicare” resulting from health reform, the campaign says if elected president, Romney would:
- Lessen federal rules on private insurers and employer plans.
- Promote public-private partnerships in addition to health insurance exchanges and subsidies.
- Help the chronically ill by means of high-risk pools, reinsurance and risk adjustment.
- Cap non-economic damages in medical malpractice lawsuits, a measure absent from the health reform law.
- Promote multi-small employer health insurance purchasing arrangements.
- Facilitate IT interoperability to cut administrative costs and streamline service.
- Give individuals who purchase health insurance the same tax deductions as employees in group plans and employers get.
- Allow consumers to purchase insurance across state lines, which Romney says will create a more level playing field with fairer competition.
- Allow health savings account holders to pay their health insurance premiums with tax-advantaged HSA dollars.
- Promote stop-loss and coinsurance products.
- Promote alternatives to the fee-for-service system of billing and paying health services.
Reaction from Consumer Group
The Commonwealth Fund on Oct. 2 issued a report critiquing if Romney’s plan, saying his plan would leave more people uninsured than the current law. In an hour-long teleconference on Oct. 1, Commonwealth Fund President Karen Davis and Vice President Sara Collins said Romney’s plan would:
- Increase the number of uninsured Americans to 72 million in 2022. Under the current reform law, the number of uninsured would drop to 27.1 million in 2022, the group said.
- Hurt small business by depriving them of protections in the reform law against unfair denials, benefit limits and high prices due to pre-existing conditions. They say Obama’s law contains protections against excessive premium hikes and coverage that spends too little on medical, as opposed to administrative, costs.
- Stifle provider incentives to improve quality, medical errors, patient care coordination, and the sources of cost growth. Romney, from his end, contends that reform’s support of accountable care organizations is a failure because of low provider uptake.
Questions About Cost Control
Both Obama and Romney have similar proposals to slow health cost growth: Capping health inflation to the growth rate of per-capita GDP plus 1 percent (Romney) or 0.5 percent (Obama). The Commonwealth Fund officials took exception to that strategy. “We’d rather change [cost growth], by changing the way health care is organized and paid for, rather than just trying to shift costs.”
Davis critiqued Romney’s “premium support” strategy. The allowance would be set at a flat amount, but that amount very likely will be surpassed by inflation. People increasingly would be exposed to the gap between the flat premium support rate and health costs. The consumer would always absorb the difference, she said.
She preferred a strategy that would slow the growth of payments to physicians at the Medicare Payment Advisory Commission level and take steps to reduce hospital admissions. That way, cost control would be on the backs of providers, and there would be less cost-shifting onto consumers.
In general, Davis said, the group would like to see quicker move away from fee for service, more linking reimbursement to comparative effectiveness, and more use of value-based insurance design.
Tax Treatment of Health Benefits
One of Romney’s proposals is to equalize the tax treatment of individual and group policies. He would make individual coverage tax exempt by allowing individuals to take an “above-the-line” (meaning one would not have to itemize their deductions to take it) deduction from taxes.
Much has been made about Romney’s apparent flip-flop: pledging to repeal a law that was cl
osely modeled on the Massachusetts program he instituted. The Commonwealth Fund officials noted that Romney’s state had substantial revenue sources including federal waiver funds, charity pools; and it had a relatively low uninsured rate to start with. Most other states in the union have less revenue and uninsured rates that are double or triple the Bay State’s, they said.
For more information on health reform, go to http://hr.complianceexpert.com. Also see The New Health Reform Law: What Employers Need to Know, by Thompson Media Group.