Bipartisan Rx for America’s Healthcare: A Practical Path to Reform

Health Update


Tom Daschle, Cochair, Former Senate Majority Leader, Co-Founder, Bipartisan Policy Center (BPC)
Andy Slavitt, Cochair, Senior Advisor, BPC, Former Acting Administrator, Centers for Medicare & Medicaid Services (CMS)
Sheila Burke, Fellow, BPC, Strategic Advisor, Baker Donelson
James Capretta, Resident Fellow, Milton Friedman Chair, American Enterprise Institute
Avik Roy, Senior Advisor, BPC, Co-Founder and President, The Foundation for Research on Equal Opportunity
Bill Frist, M.D., Cochair, Former Senate Majority Leader, Senior Fellow, BPC
Gail Wilensky, Ph.D., Cochair, Senior Fellow, Project Hope Former Administrator, Health Care Financing Administration (Now CMS)
Chris Jennings, Fellow, BPC, Founder and President, Jennings Policy Strategies
Cindy Mann, Partner, Manatt, Phelps & Phillips, LLP, Former Director, Center for Medicaid and CHIP Services

Editor’s Note: The Bipartisan Policy Center launched the Future of Health Care initiative in 2017 with a bipartisan group of leading national policy experts to create a consensus approach to improving our nation’s healthcare system. BPC’s group of healthcare leaders has diligently worked together under the shared belief that the nation’s healthcare system requires ongoing reform. Recognizing today’s polarized political environment, the approach has been to build upon the current public-private system and offer policymakers fiscally responsible policy approaches to achieve coverage, affordability and cost-related goals.

In a new report for BPC, Manatt Health worked as part of a bipartisan team of national healthcare leaders to create a multifaceted policy prescription for reforming America’s current healthcare system. The report includes recommendations for congressional action with respect to the private insurance market, Medicare and Medicaid. A summary of the report’s key findings is below. Click here to read the full report and to download the companion infographic.


­­­­­­­­­In December 2019, BPC conducted a poll, asking voters which of the healthcare reform plans that the presidential candidates are putting forward represents their preferred approach. (See Figure 1.) In the BPC poll, nearly 40% of voters listed improving the current healthcare system as their top healthcare reform approach. That reform approach received the most bipartisan support with a plurality of Democrats (46%) and Independents (38%), and a third of Republicans (32%). Among all voters, it was the most popular reform choice.

Figure 1: Voters’ Preferred Approach to Healthcare Reform

Figure-1-Voters-Preferred-Approach-to-Healthcare-Reform_v4.png

Today, most national polls—including BPC’s survey—show a majority of Americans believe individuals and families pay too much for their healthcare, and healthcare is a top concern in the 2020 presidential election. The new BPC report provides a multifaceted policy prescription for reforming America’s current healthcare system. It includes recommendations for congressional action that target excessive costs in the private insurance market, Medicare and Medicaid, as well as anticompetitive behavior by some healthcare stakeholders.

Recommendations

The BPC report provides recommendations in five key categories:

1. To stabilize insurance premiums in the individual health insurance marketplaces, Congress should:

  • Establish a federally funded and state-administered reinsurance program.
  • Auto-enroll subsidy-eligible individuals in marketplace plans.
  • Expand federal outreach and enrollment activities.
  • Expand the availability of premium tax credits to middle-income individuals.

2. To provide relief and flexibility to employers, Congress should:

  • Repeal the employer penalty for not providing workers with insurance.
  • Rationalize subsidization of employer-sponsored insurance.
  • Monitor the impact of and codify Health Reimbursement Account regulations.

3. To reduce systemwide healthcare costs across payers, Congress should:

  • Lower hospital costs in non-competitive markets.
  • Promote all payer claims databases.
  • End surprise medical bills.
  • Promote Health Savings Accounts (HSAs).
  • Eliminate barriers to prescription drug competition.

4. To improve Medicare, Congress or the Secretary of the U.S. Department of Health and Human Services (HHS) should:  

  • Streamline annual enrollment.
  • Accelerate value-based payment models in Medicare.
  • Modernize the Stark Law and Anti-Kickback Statute.
  • Reform payments for post-acute services.
  • Modify the Medicare prescription drug (Part D) benefit.
  • Decrease federal reinsurance payments.
  • Cap out-of-pocket beneficiary spending.
  • Lower cost-sharing to encourage the selection of generic and low-cost brand drugs.
  • Require an option in Part D plans that bases beneficiary cost-sharing on actual cost.
  • Address increasing costs for prescription drugs in Medicare Part B.
  • Institute a flat-rate add-on for Medicare Part B reimbursement.
  • Lower drug reimbursement based on wholesale acquisition cost.
  • Require manufacturer price data reporting.
  • Consolidate billing codes for biologics and biosimilars.
  • Establish a voluntary Part B Drug Value Program.

5. To improve Medicaid, Congress should:

  • Create a state option for 12-month continuous eligibility for adults.
  • Provide flexibility in Medicaid Section 1115A (Section 1332 of the Affordable Care Act (ACA)) coverage expansions.
  • Promote fiscal responsibility in 1115 waivers.
  • Redirect supplemental payments to Medicaid providers—promoting integrity and access.
  • Require Medicaid outcomes measures and shared savings initiatives.
  • Address Medicaid coverage of prescription drugs.  

The latest national healthcare spending data underscores the need for these changes. According to the Centers for Medicare & Medicaid Services (CMS), national healthcare spending grew 4.6% to $3.6 trillion or $11,712 per person in 2018, mainly driven by faster growth in private health insurance and Medicare. Annual spending is expected to grow 5.5% between 2018 and 2027, reaching $6 trillion by 2027. In addition, the total number of uninsured people in the United States in 2018 increased by 1 million for the second year in a row, reaching 30.7 million.

Breaking the Reform Stalemate

By bringing together the nation’s leading yet politically diverse healthcare experts, BPC has demonstrated that it is possible to break the healthcare reform stalemate and create real reforms that both parties can embrace. Unfortunately, progress on reforming the nation’s healthcare system has been stymied by a drastic movement toward ideological extremes. BPC’s effort serves as an example of what can be done when policymakers put politics aside and put people first.

The group’s internal deliberations, not unlike those in Congress, have been intense and challenging, with each member having divergent views on policies and differing opinions on the appropriate role for federal and state government, private industry, and individuals. The resulting recommendations encompass changes that would increase federal spending in some cases and reduce it in others. Overall, it is the intent and expectation of the experts participating that the plan should modestly improve the government’s fiscal outlook. If necessary, the policies recommended here could be adjusted to achieve this goal.

While no member of the group would necessarily support each individual recommendation on its own, collectively the recommendations represent a comprehensive plan on how to balance sound policy and political viability that can break the status quo and strengthen America’s healthcare system.

Our public-private healthcare system is complex. There are no simple solutions to the challenges faced in reforming the system. Today, there are vast differences between Democrats’ and Republicans’ ideas about how to reform the system, as is evident in the unfolding debates ahead of the 2020 presidential election.

Sustainable solutions must address consumers’ concerns about the high cost of healthcare in a way that doesn’t needlessly disrupt their coverage choices or the way they receive services today. BPC’s healthcare leaders appreciate the efforts of Congress and the administration in seeking workable solutions. They respectfully offer their recommendations as a path forward to controlling healthcare costs and strengthening the nation’s public-private insurance system.

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