The House Budget Committee held a hearing, “Reverse the Curse: Skyrocketing Health Care Costs and America’s Fiscal Future,” examining the impact rising health care costs play in limiting Americans’ access to affordable health care. CAHC’s Joel White testified, and the Committee highlighted two of Joel’s responses to Members.
ON HOW AMERICA’S HEALTH CARE SYSTEM IS DESIGNED FOR TREATMENT, NOT PREVENTION—FUELING HIGHER HEALTH CARE SPENDING
Rep. Marlin Stutzman (R-Ind.): So, Mr. White, I’d like to ask you: can you expand on how America’s health care system is designed to treat illness after it occurs, and how this contributes to the higher health care costs facing the nation?
Joel White, President, Council for Affordable Health Coverage: Yeah, I think we have a system that’s designed for sick care, not for preventing sickness before it begins, and that costs us a lot. And so I think the MAHA focus on health is really significantly important for lowering long-term health care costs.
I think there are three very smart things this Committee should consider in terms of policy. The first: under the ACA, premium discounts for wellness activities are illegal in the individual market. If people were given a financial incentive to eat healthy food, participate in a fitness program, or engage in other kinds of outcomes-based activities—and could earn a premium discount—that would send a strong signal that those behaviors are valuable. Currently, those incentives are illegal.
The second thing is Medicare Advantage. We’re going to spend about a trillion dollars over the next 10 years on what are called supplemental rebates. Medicare Advantage plans earn those rebates in the bidding process, and then they spend them on things like buying down premiums or lowering cost-sharing. They can also provide supplemental benefits. Right now, there aren’t a lot of guardrails. So some plans offer free bowling balls, movie tickets, or greens fees. Those are fitness activities, I guess. But when they try to provide healthy food, healthy food in Medicare Advantage is not considered primarily health related.
Because of that, plans have to go to a different program that requires the beneficiary to be diagnosed with a chronic condition, incur significant medical expenses like ER visits or hospitalizations, and be prescribed a healthy food regimen.
That’s really important for someone with diabetes or chronic heart failure. Diet is proven to lower medical costs and dramatically improve health for people like that.
So in Medicare Advantage, if we’re going to spend a trillion dollars over the next 10 years on supplemental rebates, we should at least have some rational rules around getting healthy food to people—make it a primarily health-related benefit, flex the rules for Medicare Advantage, and encourage healthy food as part of an overall health care strategy.
4. On what changes would actually drive down health care costs for all Americans:
Rep. Blake Moore: We have been hyper-focused on this smaller subset of the enhanced premium tax credits that were set to expire at the end of last year. That’s happened. We get that. But it’s still only a fraction of folks. Health care premium costs are going up for everybody in health care, right? I think there’s a lot of data that shows they’re going up a lot faster for those under ePTC’s or the ACA because whenever you just blatantly subsidize the market or give zero-dollar premiums, you’re going to see that increased rapidly. That’s a question I would like to be able to get to tomorrow but just opine a little bit more on where you think some of the biggest areas that we could focus to get premiums down for all Americans, not just the small subset.
Mr. Joel White on what should be included in Reconciliation 2.0: I think the big thing, building on Dr. Ippolito’s comment, is market consolidation is foundationally increasing prices in almost every area of the country, and so, addressing that upfront. The second thing I think is really important is what the President has suggested in giving money to consumers, not companies, that changes market dynamics. When you empower a consumer and that consumer has great information about price and quality and plan options, they are empowered to shop. And if they hold the money, they’re the purchasers. But the challenge and what we’ve heard previously is in every market in America, there’s a cheaper coverage option than Obamacare. But the law says, I can’t take my subsidy and buy that plan. So, we need to make subsidies portable. And then the last thing I would say is direct access to discounted prices through Trump RX, which would dramatically lower by 80% to 90 % the cost most Americans pay for prescriptions.