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Conservative health economists Jim Capretta and Lanhee Chen float an interesting policy idea in today's Wall Street Journal: automatically enrolling uninsured Americans in high-deductible health plans.
A short summary of how the plan would work, from the op-ed:
Lawmakers could require insurers to offer products whose premiums match the value of the federal tax credits. If the basic, age-adjusted federal tax credit for a 40-year-old man in a given state is, say, $3,000, then every insurer in the state would have to make a policy available for such customers with a $3,000 premium.
Insurers would adjust the upfront deductibles in these plans as necessary to ensure that the premium equals the credit. Most consumers in the individual market would thus have the option to get an insurance plan with no cost to themselves. This no-premium coverage would necessarily have higher deductibles than costlier options, but it would provide financial protection against expensive medical claims, which is the primary purpose of insurance.
The idea here is that there are some uninsured Americans who are leaving a tax credit on the table, perhaps because they don't know about it or don't want to pay any premium at all. Instead of leaving those Americans uncovered, Capretta and Chen suggest the government should sign them up for a bare-bones health insurance plan.
Auto enrollment has become surprisingly popular in conservative health circles
It surprised me to see how much support auto enrollment has begun to enjoy among conservative health care thinkers — given how much vitriol is directed toward the law's mandate that all Americans carry health insurance coverage.
Capretta and Chen aren't the first conservative to float the idea. Sens. Bill Cassidy (R-LA) and Susan Collins (R-ME) included the idea in their Obamacare replacement plan. The Senate Finance Committee also has a health care plan called the Patient CARE Act that envisions an auto enrollment feature to scoop up the people who don't buy coverage themselves.
I asked Sen. Cassidy whether he thought Americans would like the idea of the government choosing their health care plan, given that his party has constantly attacked Obamacare for giving too much power to government bureaucrats.
"People don’t complain because they’re automatically enrolled in Medicare Part A," he responded. "They say, Hey, I’m in, I just went to the emergency room and I’m covered. That’s great."
Capretta and Chen also frame the idea of auto enrollment quite differently from the mandate. "Opponents will argue that automatic enrollment infringes on personal liberty," they write. "But people placed into such coverage would be free to opt out or to select an option that better suits their needs."
It seems impossible to imagine Democrats proposing a plan to automatically enroll Americans in the marketplaces without causing outrage over a government-run health care system. But if the proposal comes from the right? It might just have a shot.
The two big questions about auto enrollment: what would it buy, and how would it work?
Conceptually, the idea of auto enrollment is not something that should raise alarm bells for liberals. The whole idea would be to expand insurance coverage to more Americans, which is an idea the left could near certainly get behind.
But there are two big outstanding questions that I don't think the Capretta and Chen proposal dig into — and ones that would be crucial to understanding what a proposal like this would actually look like.
Question 1: how do you find the uninsured people? The United States does not have some big national registry of who has health insurance and who doesn't. This raises the question: How the heck do you find the people who should be auto-enrolled in the default plan? Capretta and Chen suggest a few ways the country could collect this information, using tax data and other federal filings:
Placing as many of the uninsured as possible into no-premium insurance would require a coordinated administrative effort. Federal tax data capture who has remained uninsured under ObamaCare. Those households would be eligible for the tax credits under the recently withdrawn GOP bill and could be placed into no-premium plans unless new data show they have become insured. States could supplement federal data by requiring residents to say whether they are insured when they pay state taxes or renew their driver’s license. The states also could allow hospitals and physicians to identify uninsured patients to be enrolled into no-premium plans.
The challenge here is that Americans in the individual market are churning on and off health insurance a lot. Health economist David Anderson had a particularly choice phrase about this on Twitter today, noting the "individual market churns more than a butter factory."
People in the individual market are constantly switching plans and coverage as their personal situations change. One study from the health research firm Avalere found that only one-third of marketplace enrollees kept the same ACA policy from 2015 to 2016.
Someone who tells the government they do have coverage in annual tax filings could lose their plan a month later. Someone who tells the DMV they don't have an insurance plan could end up getting a job with benefits or enrolling on the exchanges shortly thereafter. And enrolling the uninsured on site at hospitals could be risky for insurers, as they would likely start to pick up sicker patients who had a reason to be at the hospital in the first place.
"To really auto-enroll all people without coverage, you’d need the biggest, baddest computer tracking system imaginable," says Larry Levitt, vice president for coverage programs at the Kaiser Family Foundation. "You would need to know month by month who has insurance coverage and who doesn’t, so you could auto-enroll the people who are uninsured."
This is all a way of saying: We don't have a system to track who is uninsured, and it would be tough to build it. After all, before Obamacare, the federal government didn't have an online platform where consumers could shop for subsidized health insurance plans. But when Obamacare was passed, that was made a priority, and (with much struggle) the government launched Healthcare.gov. If Congress were to decide they really did want to auto-enroll Americans in health insurance, it stands to reason they could also build a platform to make that type of policy possible.
Question 2: how much could this coverage actually buy? Logistics aside, I think it's worth noting that the plans Capretta and Chen suggest would be very catastrophic. They map out the example of a plan that would have a $3,000 annual (or $250 monthly) premium. To offer that kind of plan with no additional spending on the part of the consumer would likely mean a very significant deductible. To allow these sorts of plans, Congress might need to lift Obamacare's out-of-pocket caps, which currently limit patients to spending $7,150 on medical bills in for individual plans and $14,300 for family plans.
"Plans that could be purchased for no premiums beyond the tax credits could have very high deductibles and be of only limited value, especially to lower-income people," Levitt says. "Of course, that’s still better than no coverage at all."
Chart of the Day
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Do Americans like single-payer? Depends on how you ask. As new polls explore public opinion over single-payer systems, here's a longtime favorite chart of mine that explores how the wording of a question on the topic can easily sway opinion. Thanks to Ashley Kirzinger on Twitter for reminding me this chart exists!
Kliff's Notes
With research help from Caitlin Davis
- "Health insurers asked the Trump administration for reassurance on Obamacare. They didn’t get it": “Health insurance executives seeking certainty on the future of federal funds that help lower-income Americans with their out-of-pocket health-care costs got no commitment that they would be paid next year in an hour-long meeting with Seema Verma, administrator of the Centers for Medicare and Medicaid Services (CMS), according to two insurance industry officials with knowledge of the meeting. A CMS official confirmed that Verma ‘did not comment’ on the payments, called cost-sharing reductions, at the meeting and told those gathered that it was a decision to be made by Congress.” —Carolyn Y. Johnson, Washington Post
- "GOP divide over Obamacare bill deepens over Easter recess": “The town halls being held during the Easter recess seem to be furthering the divide between the two factions, with the fight over pre-existing conditions being the main dispute. While people with pre-existing conditions could still get coverage, without community rating insurers could charge them exorbitant prices. Conservatives say that high-risk pools can act as a safety net for those patients. However, centrists worry that the conservative plan would erode the Obamacare benefit, leaving them to face soaring costs.” —Robert King, Washington Examiner
- "Sessions hints DOJ will keep fighting Obamacare subsidy case": “Attorney General Jeff Sessions suggested the administration will keep appealing the House lawsuit on the legality of Obamacare insurer subsides in an interview on Fox News on Wednesday. When asked by an interviewer whether he would ‘continue to allow the legal process to continue for another judge to take a look at this case,’ or whether he'll take a ‘step back from it,’ Sessions chose the former. ‘The legal process will continue,’ he said, indicating the administration will continue to challenge a district court ruling saying the payments are illegal.” —Caitlin Owens, Axios
