President Biden says he will draw on his decades-long experience in the Senate to bridge partisan divides in Washington. Health care may stress-test his deal-making prowess.
Mr. Biden is right: There is an opportunity for bipartisan cooperation on expanding coverage and controlling costs — but only if the parties set aside ideological ambitions to make our health care system work better.
Democrats won control of both houses of Congress, but with slim majorities, they will be unable to pass expansive health measures on a partisan basis. Already, Mr. Biden is seeking a significant expansion in Affordable Care Act subsidies as part of his $1.9 trillion recovery package. Whether it’s for this reform or others, Democrats must find a way to work with Republicans for the changes they seek.
Sharply different visions, not just partisanship, divide the parties on health care. Democrats want the federal government to assert more control over the health care market, ensuring full coverage and regulating costs. Republicans want stronger competitive forces — better regulations that reward cost-cutting — and expanded options for consumers.
Compromise starts with accepting that the public is ambivalent about both sides’ agendas. Voters want the government to make health care affordable and accessible to everyone, but many Americans are not sold on giving the government total control. At the same time, there is doubt that market forces alone will protect low- and middle-income households from crushing expenses. Nor is the public supportive of rolling back existing protections and programs (which is why repeal of the Affordable Care Act is no longer a viable Republican policy platform).
Mr. Biden should work with Congress to find common ground on policies that fix obvious flaws in today’s arrangements, instead of creating new programs.
Make it easy for the uninsured to get coverage they’re already eligible for. The president wants to build on the Affordable Care Act and get coverage for more uninsured Americans. That is a realistic goal even without the creation of more programs or higher subsidies. According to the Congressional Budget Office, two-thirds of the uninsured, or about 20 million people in 2019, failed to enroll in insurance programs even though they were eligible for subsidized premiums. More than 10 million of the uninsured were eligible for Medicaid, the children’s health insurance program or subsidized private coverage through the Affordable Care Act. An additional 9.4 million people were offered tax-subsidized employer coverage but declined it.
The Biden administration should work with Congress and the states on an ambitious automatic-enrollment effort. Tax data and applications for other government assistance (like unemployment benefits) can help identify who is eligible but not enrolled in public insurance or subsidized private coverage. The federal government and states with income taxes could ask uninsured citizens during filing season if they want to be assigned coverage that would entail no premium payment on their part, or perhaps a minimal financial requirement. Individuals would be given the ability to opt-out of coverage, but experience from retirement savings programs suggests that most would accept the offer.
Congress could also encourage employers to make enrollment into job-based plans the default setting unless their workers attest to having coverage from another source, like a spouse, or specifically opt out.
Options for states to close the coverage gap. The Congressional Budget Office estimates 3.2 million people are uninsured because they are poor and live in states that have not expanded Medicaid as allowed by the Affordable Care Act. Mr. Biden and the Congress can give the non-expansion states additional options for covering this vulnerable group with federal funding to help some of these individuals enroll in A.C.A.-subsidized private coverage. To date, Democrats have argued that states should expand coverage by fully expanding their Medicaid programs to all who are eligible. Flexibility from this demand would help more people gain coverage while addressing Republican concerns about the growth of the program. Many states that are in a financial bind might be willing to accept Medicaid funding that is short of a full expansion.
Price transparency and shared consumer savings. The new administration wants to reverse many executive-branch regulations from the Trump presidency, but it should keep the rules requiring hospitals and insurers to disclose meaningful prices for medical services. Pricing opacity is not only exasperating to patients but also drives up health costs.
Mr. Biden can work with Republicans in Congress to make these rules permanent and require insurers to share savings from price shopping with consumers. A big impediment to cutting costs is that consumers often have little incentive to find lower-priced options for services because their cost-sharing does not vary much when selecting from among competing in-network providers. That’s because insurers usually set uniform cost-sharing rules for in-network care — even when the price paid for care varies — and, beyond a required deductible, consumers may not need to pay more for additional services.
Insurers should reward consumers who choose lower-priced options by letting them share in the savings when they select lower-priced providers. This should occur even when the consumer is selecting from among in-network providers.
For instance, an insurer could set a ceiling for payments for a common procedure. Patients choosing in- or out-of-network providers with total prices below the benchmark would get to keep a portion of the savings, as would their insurers. This reform would encourage providers to cut their prices to become attractive to price-sensitive patients looking to save some money.
President Biden will change the health care conversation in Washington, but he needs to compromise with Republicans if he wants to make significant progress. His lengthy political résumé suggests he will accept that reality and proceed accordingly, rather than tilting at partisan windmills. Voters of all political stripes would find that refreshing.
Lanhee J. Chen is a fellow in American public policy studies at the Hoover Institution. James C. Capretta is a resident fellow at the American Enterprise Institute.
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