Reading the Better Care Reconciliation Act (BCRA), which the Republicans hope to bring to a vote in the Senate this week, it was sometimes difficult to tell whether some of the language was actually meant as irony or was just another instance of the Administration using absurdist, Trump-like definitions of truth and facts. There is nothing in the BCRA that makes health care better for any American. The bill primarily slashes Medicaid to pay for enormous tax cuts for rich people. But even rich healthy individuals will experience health care that is no better designed, delivered, or coordinated than today—and it will cost them more too.
It is breathtaking to consider that Republicans would contemplate removing coverage from millions of Americans. A recent piece in the New England Journal of Medicine by Atul Gawande and other medical professionals details the undeniable health benefits and cost-effective mortality reductions that result from health-care coverage. Coverage leads to one life saved for every 300 to 800 people who obtain coverage, with a cost of $300,000 to $800,000 per life saved, which is less than many other interventions we pay for as a society such as cancer drugs or dialysis. According to Gawande, “there is clear evidence that you will be harming people. You will be harming their health—their physician health and mental health. There will be deaths. As a doctor, I find this unconscionable.”
For those who will still be able to afford insurance, some may find themselves dismayed to discover that their insurance covers less than it did before. A major critique of the Affordable Care Act (ACA) has come from people’s perceptions that their insurance premiums are expensive, deductibles too high, and cost sharing too large, and expect a replacement to improve upon these issues. Unfortunately, the BCRA will actually make these costs higher for most people. The BCRA anchors subsidies to a lower actuarial value plan (moving the reference plan from silver to bronze). While this may lower premiums for some (depending on how states manage age bands), the reduction in premiums will be based on the fact that the plan will be covering a lower portion of medical costs. This will result in higher deductibles than today, more cost-sharing, and more out-of-pocket expenses.
The absence of an individual mandate or continuous coverage requirement, coupled with less generous subsidies, will lead to more rapidly rising premiums too. While Republicans claim to want to lower premiums to entice young healthy people to buy insurance, the plan that they are offering is, according to the Urban Institute, one with a $6,850 annual deductible which is unlikely to attract many healthy people. With this much up-front cost-sharing, a healthy person could rationally forego the monthly premium since they are effectively paying for all their health care already. This problem is compounded by the absence of penalties for not buying insurance, in other words, the individual mandate. This would mean that those people who choose to buy are going to skew toward those who are sick. This is precisely what happened pre-ACA in the individual market in New York, despite the fact that community rating did exist there (the BCRA also keeps community rating in place), and it would lead to a small overall market and very high premiums. The BCRA creates a vicious spiral of adverse selection which will lead to a death spiral stemming from higher premiums, lower coverage levels, and losses for both insurance companies and patients who cannot afford to pay for their care.
The biggest omission in the BCRA is that it makes no attempt to reduce the overall cost of health care or improve quality. The reason it is so hard to cover all Americans with high quality health insurance is that the care we receive in America costs too much and is too often not as good as it could be. Today, under the ACA, employer-sponsored family insurance costs an astonishing $18,142 per year. While the past five years have seen a moderation in medical inflation, premiums are still rising faster than wages or GDP. The ACA included dozens of programs designed to reduce cost growth including new payment models, biosimilars, comparative effectiveness, readmissions penalties, and the CMS Innovation Center, which is empowered to test and scale innovations that improve quality and reduce costs. Starkly, the BCRA does nothing to bend the cost curve. Failure to grapple with exorbitantly expensive drug prices and other price increases, hospital market power and provider consolidation, and defensive medicine-related medical malpractice is astonishing and a major policy failure.
The BCRA is poorly thought-through policy. What we should do instead is bolster the ACA insurance markets, like Republicans did for Medicare Advantage, by making them stable and profitable for private payers. This is easily and cost-effectively achieved by not holding cost-sharing reduction payments as ransom, extending reinsurance indefinitely, and funding risk-corridor payments. These actions would make markets profitable for health plans, attract competition, and stabilize premiums. Unfortunately, the BCRA makes no attempts to do any of these things.