Stop trying to punish the market for not opposing Obamacare

Recently, adviser Mark Gaunya highlighted the bipartisan work in Washington to adopt necessary changes (even improvements) to the Affordable Care Act over the last few months. In fact, since the bill passed in 2010, there have been several changes to the legislation that have all been focused on fixing the edges, without anyone paying a political price for accepting what is already true: Obamacare is here to stay.

Pay close attention to the rhetoric over the last five years and you’ll note that there has been no call for repeal from the two sectors most impacted by healthcare reform: health insurance carriers and providers. While United’s CEO said that he wasn’t sure that they would remain in the Marketplace, you didn’t hear from them or any others that the law should go away or its market reforms should be trimmed back.

Also see: “2016’s best places to work — part 1.”

Providers have also not made repealing the law a priority in Washington (with the exception of some individual providers. But there remains an equally large contingent who believe we ought to have a single payer system). Why? Two key reasons in my opinion: consolidation and vertical integration of provider groups have quickened without strict antitrust scrutiny, and a significant reduction in the number and volume of nonpaying patients.

‘Irresponsible’ proposals

Now some (including Sen. Marco Rubio, R. Fla.) are shifting their strategy — cut the legs from under the law by de-funding the three market stabilization tools: risk adjustment, reinsurance and risk corridor. Their shrill (and ironic) screams about corporate welfare are trying to mask the real objective: punish the carriers and push them out of their pro-Affordable Care Act position.

These proposals are irresponsible and reflect a certain naiveté about how health insurance markets work. The market stabilization ideas come from conservative thinkers, too: Former Representative Nancy Johnson (R-Conn.) advocated nearly 10 years ago the idea of creating a massive $40 billion pool for reinsurance in small-group rate stabilization. Balancing risk between the carriers will ensure better competition and longer-term stability for the individual and small-group markets.

Instead, we hear other solutions to solve the health cost and coverage crisis that simply won’t work:

• Sell insurance across state lines? A waste of time — look at what happened (or didn’t) in Georgia to know that pricing is not about regulation, but about networks and paying providers what the local market will bear.
• Tort reform? It’s hard enough to bring a medical malpractice action today in state courts (even when they are legitimate cases).  Federal tort reform would impact a microscopic number of cases, and would have no impact, since malpractice costs are a small fraction of a penny for every dollar we spend on healthcare in the United States.
• Eliminate state benefit mandates? Good luck. The recent wave of autism testing mandate bills that went through the states like a wildfire proved it doesn’t matter who’s in charge of the legislature to slow the ongoing expansion of the number and nature of benefit mandates.
• End the employer deduction? That will do away with the vital role that agents and brokers play in keeping the health system efficient and, frankly, more people covered.

You don’t stop building a skyscraper 20 stories up and tear it down. The ACA isn’t perfect, but what preceded it was far worse. More importantly, it’s here to stay. Let’s get to work on making position changes to address the system’s real flaws. Expand competition, product modernization with value-based plan design, improved and integrated accountability through wellness programs, and cost-controls for rising areas like prescription drug spending.
Also see: “8 benefit trends to watch for in 2016.”

The motivation to repeal the Affordable Care Act will end at 12:01 p.m. on Jan. 20, 2017. So let’s start doing what we do best: innovate, and stop fighting the battles of yesterday.

Smith is vice president, health & welfare benefits, at Ebenconcepts in Fayetteville, N.C. Reach him at dcsmith@ebenconcepts.com.