With the U.S. presidential election just weeks away, healthcare and health reform are in the national spotlight.
President Barack Obama and Republican presidential nominee Mitt Romney have proposed distinctly different approaches to solving some of the most pressing national healthcare issues, such as slowing the unsustainable growth of healthcare costs and premiums.
While Obama has pledged to fully implement the Patient Protection and Affordable Care Act, Romney has said that he would work to repeal the law, replacing it with fewer regulations and a more market-based approach, including allowing insurance carriers to sell across state lines and encouraging businesses to form purchasing pools.
In addition, Romney’s healthcare plan would encourage more people to buy health plans in the individual market by making the tax treatment of individually purchased coverage similar to what is now accorded to employer-based plans.
Currently, about 48 million people in the United States do not have health insurance. While the Affordable Care Act has extended coverage to young adults up to age 26 through their parents’ health plans and will gradually expand Medicaid coverage, about 27 million people would still be uninsured under Obama’s health plan by the year 2022, according to a new report released in October by the Commonwealth Fund, a New York-based healthcare research foundation.
Many individuals and small businesses are expected to purchase insurance through new state health benefits exchanges. Mandated by the Affordable Care Act, state exchanges will allow consumers to shop for and compare health plans side-by-side. Proponents of the federal health law say transparency in the exchanges will drive down the cost of plans offered there, making insurance more affordable for consumers.
Without the Affordable Care Act, the Commonwealth Fund study estimates that about 60 million people would be uninsured in 2022, and under Romney’s healthcare proposal, the number of uninsured individuals could swell to 72 million in 2022.
The study is based on research by Jonathan Gruber, an economist at the Massachusetts Institute of Technology, who worked on both the federal and Massachusetts health reform laws.
“Repealing the law would not only lead to increased numbers of people who are uninsured over time, it is also expected to lead to higher healthcare spending and larger deficits,” Sara Collins, vice president for Affordable Health Insurance at the Commonwealth Fund, said at an Oct. 4 briefing on Capitol Hill. She referenced estimates by the nonpartisan Congressional Budget Office, which projected in July that repealing the health reform law would increase the federal budget deficit by an estimated $109 billion between 2013 and 2022.
The Commonwealth Fund study estimates that more than 80 percent of the increase in the uninsured population under Romney’s plan – 10.3 million people – stems from cuts in Medicaid eligibility resulting from state black grants.
While the Affordable Care Act would expand the state-run Medicaid program by loosening eligibility requirements and add about 17 million people to its rolls nationwide, Romney’s plan for Medicaid would convert the current program into block grants, which could be used by states at their discretion.
Dean Rosen, a national healthcare expert and partner at Washington, D.C.-based lobbying firm Mehlman Vogel Castagnetti, said that the Commonwealth Fund study has a number of “design flaws,” and is based mostly on assumptions, considering Romney has not yet released a highly detailed healthcare plan.
“You’re comparing a law to a framework,” Rosen said at the briefing, contrasting the lengthy Affordable Care Act to the concise outline of Romney’s healthcare plan, which appears on his campaign website.
But Commonwealth Fund researchers said that they used “relatively conservative” assumptions to break down Romney’s Medicaid plan — that federal block grants would grow at the rate of the Consumer Price Index plus 1 percent, that states would lower their contribution to match the federal one, and that states would meet these new spending limits through a combination of cuts to providers and reduced eligibility.
Obama and Romney also have different plans for Medicare. Romney’s plan would repeal the Affordable Care Act’s Medicare provisions, including benefit improvements like the phase-out of the prescription drug donut-hole and new taxes on high income earners. Romney would turn Medicare in a “premium support” – or voucher – system, meaning that existing federal spending would be repackaged as a fixed-amount benefit to seniors, which would be used to purchase an insurance plan, either through the traditional Medicare program or various competing plans.
Both Obama and Romney support capping Medicare spending growth at an increase rate of 0.5 percent of gross domestic product.
Republicans and Democrats also agree that a major problem with healthcare is utilization. While there is an overutilization of certain services like unnecessary and duplicate tests, there is an underutilization in other areas like preventive care.
In addition, reimbursement reform, comparatives effectiveness research and consumer engagement, are ideas that are supported by most Republicans and Democrats.