Avik Roy: Universal Tax Credit Plan Summary Overview o Repeals the ACA individual and employer mandates and tax hikes o Replaces the Cadillac Tax o Reduces costs of care via regulatory reform o Combats hospital monopolies, high drug prices o High-quality, private coverage for Medicaid enrollees, future retirees and interested veterans o 30-year deficit reduction of $8 trillion o 30-year revenue reduction of $2.5 trillion o Makes Medicare Trust Fund permanently solvent o Reduces private sector premiums o Increases Medicaid provider access by 98% o Increases coverage by 12.1 million above ACA levels by 2025 The plan basically relies on premium assistance credits and subsidies to purchase private insurance through private exchanges instead of the ACA s public exchanges and subsidies Proposed Changes to the Non-Group Health Insurance Market o Preserves consumer protections Preserves the system of metal tiers (Bronze, Silver, Gold) Maintains the guaranteed issue requirement Prohibits lifetime and annual limits o Reduces Adverse Selection Preserves the ACA s requirement that insurers charge identical premiums to men and women Allows insurance issuers to charge their oldest policyholders up to six times what they charge their youngest policyholders: a 6:1 age rating band (currently 3:1) Includes transitional premium assistance of 10% for those with incomes between 317 and 600 percent FPL; gradually scaled back to 317% o Reduces Overall Premium Costs Minimizes the prescriptiveness of the ACA s ten essential health benefits to encourage innovation in plan design States retain the option of requiring a broader range of benefits above and beyond the federal benchmark, but would have to bear the increased premium costs of any additions Revises the actuarial value tiers for Bronze, Silver, Gold and Platinum plans to 40, 55, 70 and 80 percent, respectively Repeals taxes on health insurance premiums, medical devices, pharmaceutical products, flexible spending accounts, medical expenses
exceeding 7.5% of AGI, over-the-counter medicines, and early HAS withdrawals o Return Insurance Regulatory Authority to the States Eliminates the federal regulation of insurance medical loss ratios: the socalled 80/20 rule that requires insurers to spend a particular fraction of their premium revenues on medical claims Prohibits the creation of public option insurers o Expand Consumer Driven Health Plans Sets the benchmark plan deductible at $7,000 per individual and $14,000 per family per year, with annual growth linked to CPI+1% Those eligible for premium support subsidies are eligible on average for a subsidized contribution to a health savings account of approximately $1,800 per individual and $3,600 per family growing annually at CPI+1% Deductible and HSA subsidy would be adjusted by age with older individuals enjoying lower deductibles and higher contributions o Convert ACA Cost-Sharing Subsidies into HSA Contributions ACA subsidies are converted on a fiscally equivalent basis into health savings account subsidies that supplement the HSA contributions contained in the benchmark consumer-driven plan o Reform Means-Tested Tax Credits Reforms the ACA subsidy scale Ends subsidy eligibility at 317% FPL Adjusts the income thresholds each year to ensure the overall growth in subsidy spending comports with the long-term inflation-based index described in the ACA o Repeal the Individual Mandate; Reform Open Enrollment; Late Enrollment Penalties Rolls back the regulations that make ACA-based insurance excessively costly for healthy, young people Reform open enrollment such that it takes place for a six-week period every two years Individuals who choose to forego coverage could do so without paying a fine, but they could not simply sign up or exit the system at will and take advantage of consumer protections o Enact individual market reforms through statute rather than regulation Reforming Employer-Sponsored Health Insurance o Replaces the Cadillac Tax with a fiscally equivalent cap on the size of the employer tax exclusion and implements at thresholds similar to what the Cadillac Tax would use in 2018 o Repeals the employer mandate o Expands the ability of small employers to amalgamate their workers into larger insurance pools for the purpose of utilizing the consumer-driven private exchanges that are growing in popularity among self-insured ERISA employers
o Medicaid and Medicare reforms will mitigate need for cost shifting which will help lower the costs of ESI Medicaid Reform: Transforming Health Outcomes for the Poor o Migrating the Medicaid Acute Care Population into the Individual Market The premium and cost-sharing subsidies for private coverage that are now available to those with incomes between 100 and 133% FPL would be available to all those with incomes below the poverty level Those who wish to opt out could and would remain the legacy Medicaid program until 2027 Dual eligible would also be migrated and receive a tax-credit based insurance benefit of the same actuarial value as their Medicare and Medicaid coverage o Returning Responsibility for Long-Term Care to the States States that agree to transfer their Medicaid acute care populations into the reform individual marketplace would be required over time to take over full funding and administrative responsibility for their Medicaid long-term care population Operate essentially like a block grant at first with states assuming full funding responsibility and MOE through 2036 States would be given full flexibility to structure their program o Restrict and eventually eliminate provider taxes o Renders all federally subsidized health insurance plans as exempt from state and local sales and premium taxes o Harmonizing federal assistance for the disabled bipartisan commission to review options Re-examining Regan-era reforms that rolled bac the use of objective health criteria in evaluating eligibility for disability coverage to ensure resources are focused on the disabled Harmonize asset limits between Medicare and Medicaid Rationalize the relationship between cash aid and health covered Medicare Reform: Ensuring the Permanence of Seniors Health Benefits o Beginning in 2016, increases Medicare eligibility age by four months per year forever o Means testing benefits for future retirees o Reduce and gradually faze our Medicaid bad debt payments o Exempt Part C and D plans from state and local sales and premium taxes o Replace Medicare s cost-sharing kludge with a unified deductible and reform Medigap plans o Introduce additional means-testing into Medicare Part D premiums o Reduce waste, fraud and abuse o Restore the ability of seniors to opt out of Medicare and purchase private health coverage o Restore the pre-aca tax subsidy for employer-sponsored retiree coverage
o Address the physician shortage Increase federal funding of GME by $6 billion per year starting in 2016 contingent on a corresponding increase in residency and internship slots Separate GME funding from Medicare and Medicaid into a discrete congressional appropriation Expand the number of foreign visas for immigrant physicians who have passed the USMLE Achieving Health Care Independence for Veterans Veterans Independence Act o Spin off the VA s clinical facilities into an independent, integrated, governmentchartered health care organization o Give veterans the option to obtain private health coverage, while preserving the VA s traditional health insurance program o Create a new Veterans Health Insurance Program where veterans would be able to take the funds spent on them through the VA system and use those funds to purchase private health coverage using premium support At first just those veterans with service connected injuries would be eligible After five years, expand eligibility to every veterans o Utilize a system similar to BRAC to shut down certain VA facilities and reorganize the VA into an ACO the Veterans Accountable Care Organization o Privately covered veterans could use the VACO facilities with no cost-sharing o Contemplate allowing VACO facilities to admit civilian patients Making Innovative Medicines Affordable o Eliminate the requirement that Medicare, Medicaid, and private insurers pay for branded drugs simply because they have been approved by the FDA o Create an exemption from antitrust regulation to private insurers in a given state or locality that wish to jointly negotiate drug prices with branded drug manufacturers o Enhance the ability of biosimilar manufacturers to compete with branded large molecules o Apply strict scrutiny to FDA regulations o Replace the all or nothing FDA approval system with one that reflects the realities of scientific research and the profiles of chronic long-term conditions Bringing the Digital Revolution to Health Care o Clarify the application of antitrust law to state medical licensing boards so as to create a safe harbor for innovative telemedicine practices o Encourage telemedicine in the uptake of bundled payment initiatives as they encourage providers and Medicare-associated insurers to identify efficiencies in cost and quality o Have the Office of the National Coordinator (ONC) defer to national medical societies to develop and annually revise open-source standards for electronic health data in their respective fields
o Liberalize federal EHR certification rules to substantially reduce the barriers to new entrance that stem from federal compliance o Reward providers who automatically give non-medicare patients (Medicare providers are already incentivized) access to secure electronic health records o Replace anti-kickback and Stark statutes with provisions requiring physician to disclose to their patients and CMS any remuneration they receive for patient referrals to improve care coordination Other Reforms: The Gathering Storm of Hospital Monopolies o Encourage new competitive entrants by repealing the ACA provisions that discourage and/or bar new hospital construction (i.e. physician-owned hospitals) o Facilitate medical tourism and telemedicine by making it easier for individual market insurers to use reference pricing within and across state lines and international borders Instruct HHS to work with various U.S. medical societies and relevant state agencies to harmonize state licensing laws and encourage cross-state reciprocity Liberal scope of practice regulations to allow nurse practitioners, physician assistant, pharmacists, and community health workers to provide care appropriate to their training o Integrate the Veterans Health Administration within the broader U.S. health care system o Discourage hospitals from further consolidation Beef up the FTC hospital staff so the agency can do more to challenge anticompetitive hospital mergers Protect private-sector consumers from anticompetitive pricing practices by requiring hospitals in extremely concentrated markets (HHI of 4,000 or above) to accept Medicare rates from the privately insured and uninsured o Migrate federal workers out of the FEHBP over to the exchanges o Cap malpractice damages for any patient receiving any federal subsidy through Medicare, Medicare, individual market coverage or other federal programs o Malpractice litigation would carry a statute of limitations of one year for adults and three years for children from the date of discovery from an injury o Replace the concept of joint and several liability with a fair share rule such that a physician s liability for malpractice damages would be limited to his or her share of the responsibility for the patient s injury