By Jeffrey H. Brochin, J.D.
HHS, in conjunction with the Department of the Treasury, the Department of Labor, the Federal Trade Commission, and several offices within the White House, has prepared a report to the President on the influence of state and federal laws, regulations, guidance, and polices on choice and competition in health care markets. The report also recites executive as well as regulatory measures taken by the Administration to improve health care markets by addressing government rules and programs that limit choice and competition, and also identifies actions that states or the federal government could take to develop a better functioning health care market (Reforming America’s Healthcare System Through Choice and Competition, December 3, 2018).
A call to remove and revise inhibiting policies. The report notes that as health care spending continues to rise, Americans are not receiving the commensurate benefit of living longer, healthier lives. Health care bills are too complex, choices are too restrained, and insurance premiums and out-of-pocket costs are climbing faster than wages and tax revenue. The authors posit that health care markets could work more efficiently and Americans could receive more effective, high-value care if the federal and state governments remove and revise certain federal and state regulations and policies that inhibit choice and competition.
Significant steps already taken. Among the most significant steps already taken to improve health care markets are:
- The October, 2018 proposed rule by HHS, Treasury and Labor that would provide employers with significant new flexibility in how they fund health coverage through Health Reimbursement Arrangements (HRAs). If finalized, this flexibility would empower individuals to take greater control over what health insurance benefits they receive. The Treasury estimates that more than 10 million employees would benefit from this change within the next decade (see New rules expanding use of health reimbursement arrangements proposed, October 31, 2018).
- The August 2018 final rule issued by HHS, the Treasury, and Labor to expand Americans’ ability to purchase short-term, limited-duration insurance—coverage for which premiums are regarded as generally much more affordable than those under the Patient Protection and Affordable Care Act (ACA)(P.L. 111-148) plans. Millions of Americans, including middle-class families who cannot afford ACA plans, will benefit from the additional choice and competition resulting from this reform (see Final multiagency rule creates short-term, limited-duration insurance not subject to ACA requirements, August 8, 2018).
- The June 2018, Department of Labor final rule to expand the ability of employers, including sole proprietors without common law employees, to join together and offer health coverage through Association Health Plans. For many employers, employees, and their families, these employee benefit plans will offer greater flexibility and more affordable benefits.
- The May 2018, HHS "American Patients First" blueprint for actions to bring down the high price of drugs and reduce out-of-pocket costs. HHS has taken a number of actions that were laid out in the blueprint to empower consumers and promote competition, building on accomplishments such as the FDA’s record pace of generic drug approvals.
Elimination of individual mandate tax penalty. The report also referenced the December, 2017 Tax Cuts and Jobs Act, which eliminated the individual mandate tax penalty and is intended to allow Americans to finance their health care needs in the way that works best for them. Furthermore, HHS and the Treasury have issued revised guidance under section 1332 of the ACA that significantly expands the ability of states to reform their individual insurance markets while ensuring that people with pre-existing conditions are protected.
Four areas in need of improvement. The report noted however, that there are four areas where federal and state rules continue to inhibit adequate choice and competition and it offered recommendations for improving public policy in the areas of: Health Care Workforce and Labor Markets, Health Care Provider Markets, Health Care Insurance Markets, and, Consumer-Driven Health Care.
The report concluded by emphasizing the need to create a more effective and efficient health care market that provides information for consumers as they make health care decisions for their families, rewards quality, encourages innovation, and delivers care at prices the American people can afford.
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