October 5, 2015
Late last month, Hillary Clinton began releasing the details for her vision for health reform.
That vision is little more than Obamacare on steroids. “I will defend the Affordable Care Act, but as president I want to go further,” the Democratic presidential hopeful said at a recent community forum in Iowa. “I want to strengthen the Affordable Care Act.”
By “strengthen,” Hillary means entrench and expand. At every level of her plan, Clinton uses Obamacare’s flaws as an excuse for more mandates, more regulations, and more taxes. To top it off, her plan would gut two successful health reform initiatives that predate Obamacare: Health Savings Accounts and Medicare Part D through price controls.
It’s Obamacare 2.0 — and it builds on Hillary’s healthcare efforts from the early 1990s.
Obamacare’s benefit mandates, regulations, taxes, and fees have forced insurers to, among other things, raise deductibles and out-of-pocket costs in order to keep premiums within the realm of affordability. Clinton doesn’t like it — and is trying to force those deductibles and out-of-pocket costs right back down with a new round of government overreach.
First, she wants to cap out-of-pocket spending on prescription drugs for those with chronic diseases at $250 a month. Second, she wants to require all health plans to cover at least three sick visits to a doctor each year with no effect on one’s deductible. Third, she would require health plans to classify any emergency visit as in-network.
Finally, Clinton proposes a new, overly complicated, income-based tax credit to subsidize out-of-pocket costs. Folks whose medical bills exceed 5 percent of their income would be eligible for the credits, which could amount to as much as $2,500 for individuals and $5,000 for families.
These poll-tested “fixes” may save some people money. But they’ll raise premiums for everyone else.
California proves as much. Starting next year, the Golden State will impose a $250 ceiling on spending for any single drug covered by a benchmark silver plan on the state exchange. State officials admit that this mandate will push premiums up 3 percent.
California’s cap is far less generous than the one Clinton proposes, since it only limits spending to $250 per drug. Clinton’s plan would cap monthly drug spending at $250 total. That, of course, could cause premiums to rise much more than 3 percent.
Obamacare has already caused premiums to spike. Insurers are arguing for double-digit premium hikes for one of every three plans they’re selling through Obamacare’s exchanges.
In many states, regulators have approved those requests. Tennessee regulators, for example, recently green-lit a 36.3 percent hike for the state’s Blue Cross Blue Shield affiliate. Minnesota officials just approved a 49 percent average increase for the state’s largest insurer.
Clinton is understandably upset by these premium shocks. So she’s trying to ban them. Her health reform plan would “strengthen [states'] authority to block or modify unreasonable health insurance rate increases.”
In other words, after larding up insurance policies with all sorts of cost-inflating mandates — like her prescription-drug spending cap — Clinton wants to make it illegal for them to raise rates..
The only thing missing is a plan to bail out all these insurers when they go belly-up.
But Hillary is not content to simply destroy the insurance market. She also wants to lay waste to two market-friendly initiatives that are actually reducing health costs and improving care: Health Savings Accounts and Medicare Part D.
Over the past decade, HSAs have exploded in popularity. Consumers can save money tax-free in these accounts for routine health spending. High-deductible plans paired with them protect individuals and families in the event of an emergency.
By giving patients direct control over their healthcare dollars, HSAs have injected some much-needed consumerism into the marketplace. Folks are using their HSA dollars to demand transparent pricing and comparison-shop, just as they do in every other sector of the economy
More than 17 million people have chosen HSA plans. Almost 80 percent of them have done so in the last four years. In total, they’ve set aside more than $24 billion in assets. And companies are increasingly offering HSAs to their employees.
Instead of encouraging this trend, Clinton aims to stamp it out by effectively forcing patients back into the unpopular HMOs of 1990s under the guise of “value-driven care.” This technocratic approach would pay providers for an entire course of care, rather than each component. It’s price controls by another name — and would give providers an incentive to skimp on care so that they can keep their own costs down and their profits up.
Clinton would also unravel the Medicare Part D drug benefit program. Part D works because it relies on the principles of market competition. Insurers negotiate with drug companies and then offer an array of plans covering different medicines at different costs. Seniors can pick the plan that best meets their needs.
Not only has Part D cost the government less than expected, the program has saved the rest of Medicare $225 billion by keeping seniors healthier. Part D accounts for 10 percent of Medicare’s spending but is responsible for more than 60 percent of the slowdown in the program’s spending since 2011.
Clinton isn’t satisfied. She wants the federal government to negotiate drug prices for Part D directly with manufacturers. But an entity the size of the government doesn’t “negotiate” over prices — it dictates them. The imposition of price controls in Part D would diminish seniors’ access to crucial drugs, decimate pharmaceutical research and development, and potentially end up costing the government even more in the long run.
If Clinton actually wants to fix Obamacare, there’s only one legitimate solution — repeal it and start over.
This article originally appeared at Forbes.com.