Earlier in October, President Donald Trump signed an executive order he says will help improve competition and choice in U.S. health care markets. The order directs the secretaries of Health and Human Services (HHS), Treasury, and Labor to propose new regulations or revise old ones to expand association health plans (AHPs), short-term limited duration insurance (STLDI), and health reimbursement arrangements (HRAs).
Critics of the Affordable Care Act (ACA) cite increased premiums, higher taxes, rising costs, penalties, and reduced insurance options as reasons to repeal and replace the 2010 law. The Centers for Medicare and Medicaid Services projected nearly 50 percent of all counties will have only one insurer participating in the their state’s health insurance exchange, leaving about 30 percent of all exchange participants without any choices. (This problem is especially bad in Alaska, Iowa, Kentucky, Mississippi, Nebraska, Oklahoma, South Carolina, and Wyoming.) In a report published earlier this year, HHS determined average premiums for individual health insurance plans more than doubled from 2013 to 2017, increasing by $2,928, and Alabama, Alaska, and Oklahoma saw their individual premiums triple over that same period.
Trump’s new executive order is one way his administration can enact some of the free-market reforms Congress has repeatedly failed to pass but that pro-liberty policy experts believe will provide many consumers with better options.
Supporters of the order say an expansion of AHPs will allow more small business to coalesce across state lines to purchase group coverage. This could bring greater access to cheap insurance options for small businesses’ employees.
Similarly, supporters argue expanding STLDI would also help make available more affordable and accessible insurance plans. STLDI is not subject to ACA regulations and mandates, and, on average, it costs one-third of even the cheapest Obamacare plans. STLDI offers access to broad provider networks and high coverage limits, and they are especially well-suited for people who are between jobs, have limited insurance exchange plans, or have missed the Obamacare open-enrollment period.
By enhancing HRAs – employer-funded health care accounts – Trump’s executive order will give employees greater flexibility and control over their health care expenses and needs.
Heartland Senior Policy Analyst Matthew Glans, in his recent Policy Brief “Don’t Wait for Congress to ‘Fix’ Health Care,” says in addition to reforms such as those offered in Trump’s executive order, states should take the lead in health care reform: “The failure of Congress so far to repeal and replace Obamacare presents the states with opportunities to develop their own programs offering aid to the poor and disabled in more cost-efficient and -effective ways. Already, several states have had success with this approach. It is time for the other states to take up the interests of their own citizens—those in need as well as the taxpayers who foot the bills—who have been failed by the national government.”
One way states can seize control of health care reform is by applying for Section 1332 waivers, which permit state lawmakers to end numerous unpopular and ineffective Obamacare provisions, such as the individual mandate, employer mandate, and premium tax credits.
State legislatures can also apply to HHS to implement a long list of other reforms that expand supply and reduce prices, including repealing coverage mandates, guaranteed issue, community rating, occupational licensure laws, and certificate of need regulations. They can expand health savings accounts and encourage telemedicine, high-risk pools, and price transparency.
Additionally, states can apply to reform their Medicaid programs using Section 1115 waivers, enacting pro-liberty policies such as work requirements.
States shouldn’t wait for Congress and bureaucrats in Washington, DC to fix their broken health care markets. Instead, they should seize the moment and create much-needed reforms themselves while there is still an administration in the White House willing to allow free-market policy changes.
What We’re Working On
Matthew Glans: Don’t Wait for Congress to Fix Health Care
In this edition of the Heartland Daily Podcast, John Nothdurft and Donald Kendal speak with Matthew Glans, senior policy analyst at The Heartland Institute, about his new Policy Brief, titled “Don’t Wait for Congress to Fix Health Care.” Glans discusses his paper, which documents the failure of Medicaid to deliver quality care to the nation’s poor and disabled even as it has driven health care spending to unsustainable heights. Glans also outlines the many steps states can take to reform health care without waiting for Congress to act.
Budget & Tax
Burlington Telecom Has Failed
In this article published in Red State, State Government Relations Manager Lindsey Stroud examines the costly failures of a municipal telecom network, Burlington Telecom, including massive cost overruns. “Burlington Telecom is a failure,” Stroud wrote. “What was supposed to answer many Burlingtonians’ growing frustrations with their phone and cable companies has morphed into a boondoggle that has cost taxpayers more than $26 million.”
Energy & Environment
Will Global Warming Overflow the Chesapeake Bay?
In this Heartland Policy Brief, authored by Roger Bezdek and released by the Nongovernmental International Panel on Climate Change (NIPCC), Bezdek examines recent flooding problems in the Chesapeake Bay region – Maryland and Virginia, in particular – and concludes they are not due to sea-level rise, but rather to land subsidence.
High-Stakes Teacher Evaluations Benefit DC Students
In this article for School Reform News, Ashley Bateman discusses a new report from the National Center for Education Statistics (NCES) showing the number of students in the United States attending charter schools has hit a record high. According to NCES, enrollment in charters has grown by approximately 1.2 million students over the last five years, with three million children, nearly 6 percent of all public school students, attending a charter school during the 2015–16 schoolyear.
From Our Free-Market Friends
Trump’s Budget Is Good for America
Writing for The Heritage Foundation, Senior Policy Analyst Justin Bogie questions why Congress has ignored the America First budget proposal unveiled by Trump back in May. Bogie says Congress still has time to pass the America First proposal, which includes balancing the budget within 10 years, cutting back harmful regulations, eliminating wasteful programs, and reducing other discretionary programs. He warns against kicking the can down the road and suggests Congress face its 2017 budget deficit and multi-trillion-dollar federal debt sooner rather than later.