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Bipartisan Rx for America’s Health Care

A Practical Path to Reform

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 health care system. Since then, members have met with actuaries, leaders across the health care industry, state officials, consumer organizations, policy experts, and providers to develop policies aimed at increasing access to affordable insurance coverage, improving quality of care delivered to patients, lowering costs for all Americans, and creating competition throughout the health care sector.

BPC’s group of health care leaders has diligently worked together under the shared belief that the nation’s health care 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 a fiscally responsible alternative to repealing and replacing the Affordable Care Act on the one hand and “Medicare for All” on the other.

Importantly, in a recent BPC poll, nearly 40% of voters listed improving the current health care system as their top health care reform approach. That reform approach received the most bipartisan support with a plurality of Democrats (46 percent) and Independents (38 percent), and a third of Republicans (32 percent). Among all voters, it was the most popular reform choice.

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Today, most national polls—including BPC’s survey—show a majority of Americans believe individuals and families pay too much for their health care and health care is a top concern in the 2020 presidential election. This report is a multifaceted policy prescription for reforming America’s current health care system. It includes recommendations for congressional action that target excessive costs in the private insurance market, Medicare, and Medicaid, and anti-competitive behavior by some pharmaceutical manufacturers and health systems, which is occurring as a result of increasing hospital consolidations.

Recommendations

  1. To stabilize insurance premiums in the individual health insurance marketplaces, Congress should (page 15):
    • Establish a federally-funded and state-administered reinsurance program.
    • Auto-enroll subsidy-eligible individuals in Marketplace plans.
    • Restore cost-sharing reduction payments.
    • 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 (page 22):
    • Repeal the employer penalty for not providing workers with insurance.
    • Rationalize subsidization of employer-sponsored insurance.
    •  Monitor impact and codify Health Reimbursement Account regulations.
  3. To reduce system-wide health care costs across payers, Congress should (page 26):
    • 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 HHS should (page 34):
    • 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 (page 44):
    • Create a state option for 12-month continuous eligibility for adults.
    • Provide flexibility in Medicaid Section 1115A (Section 1332 of the 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 health care spending data underscores the need for these changes. According to the Centers for Medicare and Medicaid Services, national health care spending grew 4.6% to $3.6 trillion, or $11,712 per person in 2018, mainly driven by a 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. Additionally, 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.

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

These 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, they represent a comprehensive plan on how to balance sound policy and political viability that can break the status quo and strengthen America’s health care system.

Our public-private health care 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 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 health care in a way that doesn’t needlessly disrupt their coverage choices or the way they receive services today. BPC’s health care leaders appreciate the efforts of Congress and the administration in seeking workable solutions and respectfully offer these recommendations as a path forward to controlling health care costs and strengthening the nation’s public-private insurance system.

“We believe we have advnaced good recommendations that are achievable in today’s charged environment. We are humble to admit that we may not have all the answers to reforming our nation’s current health care sysytem, but think our bipartisan policy proposals can be embraced by both parties for meaningful change.” – Future of Healthcare Leaders

Read the Full Report

Introduction

Most national polls, including one recently conducted by BPC, show a majority of Americans believe individuals and families pay too much for their health care, and health care is a top concern in the 2020 presidential election. However, there is insufficient support for either a solely government-run or strictly market-based health care system, once consumers consider the necessary trade-offs of increased taxes, limited choices, or reduced benefits for the elderly, infirmed, or low-income populations.

BPC’s Future of Health Care initiative was established in 2017 to developrealistic, actionable policies that would provide a fiscally-responsible alternative to repealing and replacing the Affordable Care Act (ACA) on the one hand and Medicare for All on the other.

The initiative was led by a group of bipartisan national health care leaders who met with actuaries, health system and insurance industry leaders, state officials, consumers, and providers to develop a comprehensive package of proposals aimed at improving the coverage, quality, and costs of health care for all Americans.

The group strongly believes the current health care system requires ongoing reform. They approached this work with a shared belief that fundamental structural changes to the current system can only occur if Congress works across party lines to address anti-competitive behavior by some health systems and the pharmaceutical industry, and excessive costs in the private insurance market, Medicare, and Medicaid.

The recommendations in this report were developed through difficult negotiation reflecting the discomfort that is inherent in reconciling substantive and political differences. The Future of Health Care leaders believe the recommendations offer the most potential for meaningful impact in today’s polarized political environment.

BPC’s health care leaders hope that consensus from Congress on these policies can engender a level of mutual investment and trust among both Democrats and Republicans. Such an investment is a precondition for constructive and productive bipartisan collaboration on the reforms that are necessary to improve and sustain the nation’s complex health care system.

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