Indiana Governor Mitch Daniels (R) has an op-ed in today’s Wall Street Journal laying out the conservative approach to implementing the Affordable Care Act. If the law can’t be scrapped, Daniels argues, then states should be provided with flexibility to implement it “in the direction of freedom and genuine cost control.” Consider his proposals:
- We are given the flexibility to decide which insurers are permitted to offer their products.
- All the law’s expensive benefit mandates are waived, so that our citizens aren’t forced to buy benefits they don’t need and have a range of choice that includes more affordable plans.
- The law’s provisions discriminating against consumer-driven plans, such as health savings accounts, are waived.
- We are given the freedom to move Medicaid beneficiaries into the exchange, or to utilize new approaches to the traditional program, instead of herding hundreds of thousands more people into today’s broken Medicaid system.
- Our state is reimbursed the true, full cost of the administrative burden to be imposed upon us, based on the estimate of an auditor independent of HHS.
- A trustworthy projection is commissioned, by a research organization independent of the department, of how many people are likely to wind up in the exchange, given the large incentives for employers to save money by off-loading their workers.
All this translates into higher costs and less coverage for the beneficiary.
The first three points demonstrate Daniels attempts to lower the standard of coverage that beneficiary can purchase through the health care exchanges. Rather than comparing between comprehensive packages that provide a basic array of essential services — nobody is proposing covering hair plugs, as some conservatives have proposed — this former OMB director suggests that skimpy plans should also be available for purchase. People should be able to “buy what they need,” he argues, ignoring the fact that insurance should not be a grab bag: there is absolutely no way to predict what illness one will develop in the future and that this very real inability has led to widespread undercoverage and bankruptcy. If an individual purchases a very basic plan and then develops cancer in five years, what good is a “consumer driven” plan if it doesn’t cover chemotherapy?
Daniels’ Medicaid reforms are less troubling. For all of its faults, the program provides affordable coverage for lower-income Americans and the law goes a long way to strengthening that commitment. Under his plan, low-income families who are now on Medicaid (and therefore face minimal cost-sharing and premiums) could be moved to the exchange where they would have less generous coverage, and therefore greater out-of-pocket spending for uncovered services as well as cost-sharing. And the Feds would pay for all of it, instead of the state picking up the standard state share they pay for today.