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Vital Signs Blog

Jeb Bush's consumer-choice model offers questionable choices

Bush Bush Credit: Gage Skidmore
Republican heavyweight Jeb Bush, who's likely to run for president in 2016, offered his ideas this past weekend on how to repeal and replace the Affordable Care Act. But in a speech mostly devoid of details, his most concrete proposal could well worsen one of the biggest consumer problems under the ACA – high out-of-pocket costs.

Speaking in Iowa at a political fundraiser, the former Florida governor called Obamacare a “monstrosity” that he wants to see repealed after President Barack Obama leaves office. Here's what he proposes in its place, according to Politico.

“The effort by the state, by the government, ought to be to try to create catastrophic coverage, where there is relief for families in our country, where if you have a hardship that goes way beyond your means of paying for it, the government is there or an entity is there to help you deal with that. The rest of it ought to be shifted back where individuals are empowered to make more decisions themselves.”

Bush advocates replacing the ACA “with a model that is consumer-directed, where consumers, where patients, have more choices … where the subsidies, if there were to be subsidies, are state administered … where people have more customized types of insurance based on their needs; and it's more consumer-directed so that they're more engaged in their decisionmaking, and they have more choices than what they have today.”

Conservatives like Bush long have favored a shift toward skimpier, catastrophic-type health plans with high deductibles and cost-sharing.Their stated goals are to make premiums more affordable and prompt consumers to use healthcare services more thriftily. They have largely won that health policy debate in the U.S., which they rarely acknowledge.

Indeed, “catastrophic coverage” is fast becoming the norm. Both Obamacare exchange plans and, increasingly, employer health plans feature steep deductibles, coinsurance and co-payments. The growth of such plans has been partially credited with slowing healthcare spending over the past few years.

But some experts question how much additional cost-sharing lower-middle and middle-class consumers can afford, and whether high-deductible plans are discouraging patients from seeking needed care. Many medical and hospital leaders are expressing mounting concern over how the high cost-sharing is affecting their efforts to manage patients' chronic conditions. After all, having to meet the more and more common $5,000 plan deductible—or even a $2,000 deductible—is a tall order for many Americans.


Household liquid assets and deductibles


In his comments last weekend, Bush also stressed giving people the choice of “more customized types of insurance based on their needs,” an obvious knock on the ACA's requirement that all plans offer an essential benefits package.

Republicans commonly argue that consumers should be able to pick and choose the benefits they need rather than being required to pay for plans that include benefits they might not immediately need, such as coverage for maternity or mental health services or prescription drugs.

The problems with this approach were well described recently by Bloomberg's Christopher Flavelle: “Republicans are really saying that people should be free to avoid carrying insurance for problems they don't expect to have (a bout of depression, maybe, or a stroke that requires rehabilitation) or don't want to help pay for (pediatric and maternity care for men with no children, say). The former view shifts costs onto the unlucky; the latter shifts costs onto women and parents. Both undercut the purpose of insurance, which is pooling risk. Neither saves money. Yet in the abstract the argument sounds compelling. And it's going mostly unchallenged.”

There are many other problems with Bush's sketchy healthcare policy prescription, in which he didn't even commit to providing subsidies to help Americans with modest incomes afford health coverage.

Over the coming months, Americans need to carefully evaluate such Obamacare-replacement proposals to see whether these plans wouldn't leave them even more exposed than they are now to ruinous medical bills.

Follow Harris Meyer on Twitter: @MHhmeyer






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