Lanhee J. Chen is a research fellow at the Hoover Institution and director of domestic policy studies in the public policy program at Stanford University. Tevi D. Troy is chief executive of the American Health Policy Institute and was deputy secretary of health and human services from 2007 to 2009.
Donald Trump’s statement that his preferred replacement for the Affordable Care Act (ACA) would provide health “insurance for everybody” surprised those who have followed the contentious debate over the health-care law since its passage in 2010. Rep. Tom Price (R-Ga.), Trump’s nominee for health and human services secretary, signaled agreement with the president when he said during his confirmation hearing that a Republican replacement for the ACA should cover more people.
In recent years, though, Republicans have emphasized that gains in insurance coverage should not be the sole barometer by which health-care reform is measured. Rather, they have said, the affordability of that coverage is the key to a better health-care system with fewer uninsured Americans. The ACA’s cardinal sin is its focus on access first, while doing little to address cost.
As a general matter, the conservative focus on lowering health-care costs first is exactly right. Yet Trump was also right to argue that the ACA’s replacement ought to have universal coverage as a goal. Democrats should not be allowed to claim this health-care moral high ground uncontested.
For too long, Republicans have shied away from calling for “universal coverage” because they’ve equated it with the Democratic push for a government-run, single-payer health-care system. But that simply isn’t the case. Market-based reforms can both lower costs and lead to health insurance coverage for more Americans. Indeed, any health-care reform that can’t compete with the ACA on coverage is sure to face significant political headwinds. It also would make it far less likely that Democrats can be persuaded to support replacement legislation. Perhaps most important, this is a fight that conservatives can — and should — win.
The starting point for this seemingly audacious claim is the fact that the ACA has been a significant failure even for those who value universal coverage above all else. While the law has unquestionably decreased the number of uninsured people in the United States, the Census Bureau reported last year that 29 million remained without health coverage in 2015. (About a quarter of these were undocumented immigrants or residents of states that opted against the Medicaid expansion.) In 2015, the Internal Revenue Service found that 19.2 million taxpayers either paid the individual-mandate penalty or received hardship exemptions from that mandate — meaning that tens of millions of people went without health insurance, primarily because it’s too expensive.
Republicans have traditionally been more comfortable talking about the importance of ensuring that every American has access to quality, affordable health insurance. Indeed, “universal access” has been a relatively noncontroversial way for conservatives to avoid making promises about how market-based health-care reform would affect the number of Americans who remain uninsured after the passage.
The apparent gap between what Trump appears to be proposing (universal coverage) and what Republicans have supported (universal access) isn’t nearly as wide as many analysts think. This gap is both narrow and bridgeable: There are policies that can ensure universal access to health insurance while also putting our nation on the path toward universal coverage.
Any market-based replacement for the ACA should include four key elements to move us toward universal coverage.
First, it should expand access to consumer-directed coverage arrangements such as health savings accounts coupled with high-deductible insurance plans. These products not only help reduce costs but also give consumers greater control over their own care. Such increased control incentivizes individuals to do what consumers do best: make value-based decisions that collectively drive down costs and improve quality.
Second, assistance should go to those who need it but be tailored to their individual situations. Low-income Americans should have access to a more innovative and modern Medicaid program, while the working poor should have access to a tax subsidy to help them afford private plans.
Third, those with preexisting conditions should have access to mechanisms, such as properly funded high-risk pools, to help them both acquire and afford coverage.
Finally, the federal government should allow for alternative pathways to private, tax-preferred coverage, by allowing health plans to be sold across state lines, as well as by giving unions, churches and other civic organizations the opportunity to offer coverage to members.
Taken together, these policies provide a powerful set of tools to both drive down health-care costs and expand coverage to every American. Trump and the Republican Congress have a remarkable opportunity not only to do away with the ACA and all of its shortcomings but also to put in place reforms that will truly improve our health-care system. Republicans in Congress should not hesitate to embrace Trump’s call for universal coverage. Indeed, they should work with the new administration to pass legislation to make this goal a reality.