The future of the GOP depends on a winning healthcare policy

By | November 4, 2018

If Democrats mop the floor with Republicans in the midterm elections, it will likely be over healthcare policy. A recent Kaiser poll found that 30 percent of midterm voters think it’s the most important issue — even over the economy. And these same healthcare-minded voters favor Democrats by more than 24 points. It makes sense, because GOP healthcare messaging has been scattered for years. Even now, President Trump is arguing for the need to protect existing Medicare commitments while Senate Majority Leader Mitch McConnell, R-Ky., hints at the need to cut Medicare spending. Meanwhile, Republican candidates like Josh Hawley of Missouri campaign on both protecting pre-existing conditions and repealing Obamacare.

The GOP cannot sustain a nonposition on this issue. As college-age and millennial voters — a group largely drawn to Sen. Bernie Sanders, I-Vt., and “Medicare for all” — begin to vote more frequently, the GOP will need their own compelling healthcare stance to compete for my peers’ support. Future-minded Republican leaders would be wise to consider the ways policymakers can both reduce healthcare spending and make healthcare more accessible for all. The Trump administration, surprising as it may be, has made some positive changes in healthcare policy. And these changes are setting the stage for what could easily be a very promising system.

In August of this year, the Trump administration enacted a rule requiring hospitals to post their procedure prices online. In a free market, prices can only go down when both buyers and sellers know what they are. For instance, areas of medicine with transparent prices — such as cosmetic surgery and LASIK eye surgery — have become both cheaper and higher-quality over the past 25 years. Meanwhile, overall healthcare prices have skyrocketed.

A central factor in rising prices is the collaboration between large hospitals and insurance companies to obscure the price system. This behavior leads to dramatic variations in price for the same procedure with equivalent cost and quality. For example, in the Dallas-Fort Worth area, the price of a mammogram varies from $ 50 to $ 1,045. A study from Yale and the University of Pennsylvania found that lower-leg MRI prices can vary up to 900 percent within the same metropolitan area. In a country where 57 percent of Americans have less than $ 1,000 in savings, reducing these price differences would have a huge impact.

Transparency would give patients the ability to compare prices and therefore force hospitals to lower them. To allow for the competition that would improve our system, a future healthcare package should pair price transparency with reforming healthcare provider regulations. Hospitals often back strict regulations to drive smaller, lower-cost care providers out of the market, giving large hospitals the monopoly power to overcharge patients.

Conservative healthcare reform must also address the insurance system. As health policy expert David Goldhill wrote in The Atlantic, health insurance should work like other forms of insurance: by preventing financial ruin caused by treatment for unforeseen or chronic injuries. Instead, thanks to policies like the tax exclusion for employer-sponsored health insurance, health insurance is used to pay for almost all routine procedures. Having insurance companies, instead of individuals, directly pay for most procedures inflates costs and leads to ineffectively high consumption of care.

The Trump administration began to address these problems by allowing consumers to buy narrow, “short-term” health insurance plans instead of using Obamacare exchanges. That’s a start, but as the name suggests, it’s only a short-term solution. Such plans do not help people with pre-existing conditions — an issue that has become a focal point of the healthcare debate. If conservatives are interested in finding a permanent solution, they ought to consider universal catastrophic care.

Under universal catastrophic care, everyone in the country would receive coverage for high-cost and chronic illnesses — protecting people with those pre-existing conditions. However, for other procedures, people could choose to pay through health savings accounts or supplementary private insurance. With this system, private insurance would receive none of the subsidies and tax benefits it currently gets, reducing inefficient healthcare consumption. Additionally, lower-income households would receive government assistance if they’re unable to pay for routine or preventative care.

Unlike Medicare-for-All, which would increase federal spending by $ 32.6 trillion, universal catastrophic care is affordable. The RAND Corporation modeled a health insurance solution proposed by Kip Hagopian and Dana Goldman in National Affairs for universal catastrophic care and found the plan would reduce federal healthcare spending by $ 72 billion. That’s consistent with the experience of Singapore, which has universal catastrophic insurance and the lowest government healthcare spending in the developed world. The U.S. healthcare system features public insurance programs, private subsidies, regulations, and tax breaks. Replacing all of them with a simple, universal catastrophic insurance plan and a safety net would improve our nation’s health — fiscally and literally.

The GOP’s healthcare reckoning might not come in 2018, but conservatives should be ready whenever it does. Price transparency and universal catastrophic care would do more than solve the GOP’s messaging problem by making healthcare more affordable for low-income people and curbing runaway spending growth. What Republicans are doing now isn’t working, so it’s time to try something new.

Alex Muresianu (@ahardtospell) is a Young Voices contributor studying economics at Tufts University.