A Durable Path Forward on American Health Care
Reinsurance, Portable Coverage, Modernized Savings Accounts, and a More Efficient Role for Medicaid
A Durable Path Forward on American Health Care
Reinsurance, Portable Coverage, Modernized Savings Accounts, and a More Efficient Role for Medicaid
David Bernstein
www.economicmemos.com
Abstract:
Federal health policy has alternated between expanding Affordable Care Act subsidies and restricting public assistance, without producing a durable settlement. This paper proposes four mutually reinforcing reforms: federal catastrophic reinsurance, portable employer contributions toward employee-owned Marketplace coverage, modernization of Health Savings Accounts and Flexible Spending Accounts, and broader use of Medicaid where it provides better protection at lower cost. Together, the reforms would lower underlying insurance costs, reduce job lock and coverage interruptions, protect household savings, and direct public assistance toward the financing mechanism best suited to each population. Because several provisions would reduce Premium Tax Credit, CHIP, or recession-related Medicaid costs, their net fiscal cost could be substantially lower than their gross cost. The paper also identifies 25 implementing provisions, all of which appear likely to fit within the tax and budget-reconciliation process.
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