Options are about to multiply for 12-million Americans trapped in ObamaCare plans, the 12% uninsured, and others ACA victims, with coming new proposals from the Trump administration. After signing “Right to Try” into law Wednesday, President Trump hinted that these changes are mere weeks away.
Once the new policies are in place, new lower cost and flexible insurance alternatives will be unleashed, freeing Americans from disruptive (in a bad way) ObamaCare rules that drive up costs and decrease patients’ and workers’ choices.
Here are the two expected policies plus one hack that will floor the accelerator on their impact:
First, the Department of Labor is set to expand the availability of Association Health Plans. These will give Americans with common connections the ability to join together in plans they control. Less regulation is not the only advantage of AHPs, although savings will be significant: an estimated $9,700 a year less compared to the individual market by 2022, reports Avalere. Escaping state-based mandates is another advantage; these plans can be sold across state lines. In addition, association plans will allow employees to more readily keep their plan if their work situation changes.
The second anticipated policy, this one from the Department of Health and Human Security, will increase access to short term health insurance plans that are almost completely free of failed ACA requirements. Under President Obama, these plans were limited to 90 days of coverage, but Secretary Azar is expected to extend the limit to 364 days. Coverage in such a plan would costs on average $342 a month, vs. $619 per month for an exchange plan, reports Michael Cannon of CATO. Mr. Cannon also suggests the administration should allow short term plans to offer guaranteed renewability or even sell the guarantees separately (he estimates the average cost at $86/month). Renewability options would not only help consumers retain these plans long term, but would also inhibit expensive enrollees from being pushed back into the ACA exchanges.
Both of these proposals are going to help Americans; however the Trump administration could turbo-charge these good ideas with one simple hack. One sleek additional change to federal policy would lower costs even further, while increasing patients’ access to high quality care.
What else should the Trump administration do immediately? It’s simple: let patients use Health Savings Accounts (HSAs) for Direct Primary Care (DPC).
Most people already know about HSAs but, perhaps aren’t yet familiar with DPC, a direct arrangement between doctors and patients, that cuts the red tape out of health care, kicks the bureaucrats out of the exam room, and is set to sweep across the U.S. Dr. Marilyn Singleton explains DPC like this: “The Direct Primary Care (DPC) model is burgeoning as patients yearn for quality time with their doctor at an affordable price. Here, all primary care services and access to basic commonly used drugs at wholesale prices are included in a fixed transparent price,” often around $50 to 75 per month.
The bottom line is DPC saves money for patients and downstream payers (like Medicare), increases quality of care, and it relieves physicians of counterproductive red-tape hassles that are driving them out of practice. DPC is a win-win-win.
You’d think everyone would agree that encouraging the use of DPC is a no-brainer. Shockingly, the Internal Revenue Service is blocking the use of this innovation for the 30 million Americans with HSAs. Thanks to a letter issued by Obama’s IRS commissioner, John Koskinen (yes the same one who stonewalled efforts by Congress to investigate IRS retaliation against conservatives) patients are prohibited from contributing to their HSA if they are in a DPC practice. To add insult to injury, HSA funds cannot be used for DPC.
As the public becomes aware of this flawed IRS decree —deserving of a blue ribbon in the Health Policy Hall of Shame—momentum grows for change. Just last month, Senators Ted Cruz and Ron Johnson wrote Treasury asking for a reversal. In addition 1,125 patients and doctors have asked Congress to pass the Primary Care Enhancement Act (HR 365/S 1358) and force the IRS to change its misguided interpretation of law.
Disrupting (in a good way) Koskinen’s obstruction of patient freedom must be a priority for the Trump Administration as it moves forward with other reforms to remedy past policy disasters. Allowing patients to use HSAs for DPC will turbo-charge the ability of patients with short term and Association-based plans to make their health care dollar go even further and get the best care from the physicians of their choice.
Need one last reason, President Trump? DPC will boost your plans to lower prescription drug costs. A 72-year old female patient with multiple chronic conditions purchases all nine of her medications through a Direct Primary Care office in Allentown, Pennsylvania for $14.63 per month. Through Medicare “coverage” her cost would be $294.25 per month.
There is simply no legitimate reason for blocking patients with HSAs from DPC physicians … unless you are a middleman profiting off the status quo.