How Graham-Cassidy Could Give Texans Better Health Insurance at Lower Costs

Many agree the Affordable Care Act is in desperate need of reform. Some Texas families are paying more for their health insurance than they pay for their mortgages. They are also getting less access to care. According to their websites, University of Texas M.D. Anderson Cancer Center in Houston and UT Southwestern Medical Center in Dallas are just a few of the centers of excellence that no longer accept individual Affordable Care Act plans.

Sens. Lindsey Graham, R-S.C.; Bill Cassidy, R-Louisiana; Dean Heller, R-Nebraska; and Ron Johnson, R-Wisconsin, have introduced a proposal to radically change all this. Roughly speaking, if a state is satisfied with the Affordable Care Act, it can keep it. But if Texas wants better, more affordable insurance, it would be able to have it.

According to a recent Congressional Budget Office report, close to 30 million peoplenationwide are uninsured and that number isn’t expected to change much. The reason: Millions of people have decided that the products being offered are not worth the premiums being charged. The Graham-Cassidy bill allows insurers to offer a more attractive package of benefits for a lower premium. Judicious use of risk pools and reinsurance would also help – especially with high-cost enrollees migrating from group to individual insurance. If Texas established a dedicated source of funding for this purpose, it should be able to reduce premiums in the non-group market by as much as 50 percent.

Low- and moderate-income families are being forced to buy coverage that is completely inappropriate for their financial circumstances and health status. Instead of insurance that has unlimited annual and lifetime limits and a $13,000 deductible, would they rather have more limited coverage along with a lower deductible and a health savings account? Limited benefit insurance would give the family easy entry into the system, but would leave some very expensive cases for the safety net (which is a more appropriate way of funding them, anyway).

At least one plan could be offered with a premium that is no more than the subsidy the state provides. Since these plans would require no out-of-pocket payment by the enrollee, people could be automatically enrolled through the food stamp program, by H&R Block, at the Department of Motor Vehicles and in other ways. Universal coverage could be a reality rather than an empty slogan.

One of the worst features of Obamacare is the extremely inequitable treatment of people who are offered insurance at work versus people who purchase their own coverage. Employers of low-wage workers are offering bronze plans with very high deductibles in return for a premium that is 9.5 percent of their wages. For family coverage, some employees face premiums that are one-third of their income. If employees turn down these offers (which almost all do), neither the employees nor their dependents are eligible for highly subsidized insurance in the exchanges.

Under Graham-Cassidy, the employer and individual mandates go away and Texas could equalize the subsidy offered in the group and individual markets for low-income families. This would be especially important in areas of the state where the non-group market has become completely dysfunctional and group insurance is cheaper and better.

Currently, a large number of people are gaming the system by remaining uninsured while they are healthy and insuring only after they get sick. Because of a 90-day grace period which allows people to continue to get care after they quit paying premiums, people are also dropping coverage to avoid paying premiums at year end. Of those who are enrolled in January, roughly 25 percent drop their coverage before the year is out, according to the Department of Health and Human Services. Some sources estimate that roughly half of those re-enroll for half the year.

Additionally, some people buy bronze plans while they are healthy and then upgrade after they get sick. This type of behavior unfairly shifts costs onto other people. Under Graham-Cassidy, states will be able to require individuals to pay more out of their own pockets when they engage in these activities.

Texans could also gain access to personalized care. At $50 per month for an adult and $10 for a child, the cost of direct pay medicine, known as concierge care, has come down to a level that should make it accessible to almost everyone. Graham-Cassidy allows these fees to be paid from a Health Savings Account or by a third-party insurer.

Centers of excellence would be able to specialize in specific diseases, such as cancer care, heart disease and diabetes. They would be able to ask health questions and screen applicants to help get the right patient to the right plan.

In a New York Times article, Cassidy notes that four states: California, New York, Maryland and Massachusetts, receive 37 percent of all Obamacare funds.

Graham-Cassidy would change that by giving each state a block grant equal to its share of the country’s poor and near-poor population. Texas would be a big winner under this fairer allocation, getting $17.8 billion in additional funding over the next 10 years.

Graham-Cassidy would also limit the future growth of Medicaid to something we can afford. This feature is no different from what Bill Clinton and many Democrats proposed only a few years ago. It is similar in spirit to the limits Democrats imposed on Medicare when they created Obamacare.

Under Graham-Cassidy, Texans could have better care at half the price. Let’s hope Congress gives us that opportunity.