Twin Cities’ vaccine and mask mandates are pointless
In most places around the globe, Omicron peaked as quickly as it came. Data from South Africa, for example, suggests that Omicron peaked the third week of December. And even…
Last week the U.S. Senate released their FY2022 Budget Resolution Agreement Framework. This represents the outline of how Democrats in Congress plan to implement President Biden’s $3.5 trillion budget plan without a single Republican vote under the budget reconciliation process. Part of this spending spree would go toward making a temporary expansion of Affordable Care Act (ACA) health insurance premium subsidies during COVID permanent.
If implemented, this expansion would only build off ACA policies that already propelled individual health insurance premiums to unaffordable levels and, as a result, drive further dysfunction in the individual market. Ultimately, this will end up cementing a level of unaffordability that will make nearly everyone who relies on the individual market dependent on a substantial government subsidy.
Moreover, by using taxpayer-funded subsidies to paper over the affordability problem, it does nothing to address the overall rise in the cost of health care. Instead, it adds fuel to America’s health care cost problem by undermining insurers’ incentives to control costs. The big winners from the Senate’s proposal will be health insurers. Higher health costs combined with larger subsidies will mean higher profits.
Today, Health Affairs published an article I wrote outlining how the ACA led to unaffordable premiums, the ACA’s failure to efficiently cover more people, and the severe consequences of making the expansion of the ACA’s premium subsidies permanent. The article concludes by offering three policy alternatives that can help build a more functional competitive insurance market.
The vision behind these policies is a more competitive individual market with lower premiums that middle-income Americans can afford on their own without direct subsidies. By creating a more functional and competitive market, these policies would help drive down the overall cost of care. Here are the three policies:
The high and rising cost of health care has been a fundamental problem plaguing America’s health care system for decades. Taking advantage of the competitive forces that drive prices down and quality up in every other sector of the economy is key to controlling health care costs. Pursuing these policies to create a truly competitive individual health insurance market would be a powerful force to help address America’s health care cost problem at its root.