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Analysis of proposed health reform policies

prez_seal_stethHealth reform has remained a hot topic throughout the recent months leading up to the presidential election. Here is a breakdown and analysis of a few proposals put forth during the 2016 presidential campaign.

Completely repeal Obamacare. Our elected representatives must eliminate the individual mandate. No person should be required to buy insurance unless he or she wants to.

Regardless of your political affiliation, I think we can agree there are many aspects of The Affordable Care Act (Obamacare) that have mitigated the current health care crisis. The law has mandated more comprehensive coverage of health plans, for example, dependents must be eligible up to age 26, there are no more lifetime limits on coverage, no more pre-existing condition limitations and free preventive care services. Each of these provisions has vastly improved the quality of health care plans. The Individual Marketplace currently covers nearly 17 million Americans, most of which were not covered by health insurance prior to enactment of the ACA.

Allow individuals to fully deduct health insurance premium payments from their tax returns under the current tax system. Businesses are allowed to take these deductions so why wouldn’t Congress allow individuals the same exemptions?

Health coverage purchased from an employer is already tax exempt to the employee. In fact, both the employer and the employee receive the tax benefit. As of a 2014 Kaiser Foundation study, 49% of Americans receive their health insurance through their employer and already receive a tax benefit. The same study revealed that another 32% of Americans receive their health care through entitlement programs like Medicare and Medicaid.

Individuals who purchase health coverage on the Marketplace would benefit from being able to deduct premium payments from their tax returns. However, many Marketplace enrollees are low and middle income individuals who typically have health insurance premiums that exceed what they owe in taxes.

Allow individuals to use Health Savings Accounts (HSAs). Contributions into HSAs should be tax-free and should be allowed to accumulate. These accounts would become part of the estate of the individual and could be passed on to heirs without fear of any death penalty. These plans should be particularly attractive to young people who are healthy and can afford high-deductible insurance plans. These funds can be used by any member of a family without penalty. The flexibility and security provided by HSAs will be of great benefit to all who participate.

This policy is misleading because Health Savings Accounts are already tax-free and accumulate from year to year. Health Savings Accounts can also be passed on to an heir. If an HSA participant designates his/her spouse as the beneficiary, the HSA will be treated as the spouse’s HSA after the participants death. If the HSA is left to someone other than a spouse, the HSA will be closed and the funds will be taxable to the beneficiary.

Require price transparency from all healthcare providers, especially doctors and healthcare organizations like clinics and hospitals. Individuals should be able to shop to find the best prices for procedures, exams or any other medical-related procedure.

The Affordable Care Act includes several provisions to increase access to health information and promote transparency. There is no immediate solution. It is a road we are already on. In addition to price transparency, health plans are required to provide a uniform Summary of Benefits and Coverage (SBC) which is includes coverage examples for common medical occurrences like diabetes and childbirth. The ACA places data reporting requirements on physicians, hospitals and prescription drug manufacturers. Also, the insurance carriers now have to meet certain medical loss ratio requirements which limit the percentage of premium dollars insurers can spend on administration, marketing, and profits.

Repealing Obamacare, may not be the wisest idea. The Congressional Budget Office released a report stating that repealing Obamacare would increase the budget deficit by $353 billion over 10 years. I would like to see a Presidential frontrunner propose policies to truly curb the cost of healthcare at the provider level. Everyone loves to blame insurance companies but large hospitals and provider groups set prices for healthcare services, shouldn’t we start there? I’d like to see a Presidential nominee who will build on what has already been implemented with the goal of further expanding coverage and improving quality.

About the Author

Kate_OSullivanKate O’Sullivan is an Area Assistant Vice President and Client Service Manager at Gallagher in Gallagher Benefit Services. She is responsible for servicing a number of small, mid-size and large accounts, and works on the Health Care Reform Committee.

617.646.0325 | Kate_OSullivan@ajg.com | Connect with Kate on Linkedin

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