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Wednesday, June 25, 2014

One of my law school professors and now good friends, Professor Burt Brody, has been contemplating beneficial changes to the Affordable Care Act.  I think he is on to something beneficial.

Professor Brody has written an op-ed piece published in the Desert Sun on May 21, 2014.  In the column, he supports the notion of having the health insurance industry participate fully in the correction, and he eschews the notion of “national health care” in its pejorative sense.  Professor Brody, without saying so, realizes that the Act is a health insurance reform act, not truly a health care reform act.

His suggestion is to take the amount that the federal government spends today on health care, and dole it out to everyone with a Social Security card – that’s every legal American – based on age brackets and veteran status that reflects perceived need for  health insurance.  The funds would be used to buy health insurance.  Professor Brody assumes that younger people are going to pay less for health insurance than older Americans, and, based on age cohorts, the amounts would increase with age.  Note that this does not require that there be any tax increase to implement, although there would likely be administrative costs in setting up and running the system, probably through the Social Security Administration since it already has our social security numbers, addresses, and dates of birth.

ACANext, the professor suggests using the “commerce power as it was intended,” i.e., to prevent state barriers to interstate commerce.  This means that insurance companies could sell their health policies across state lines thus creating a national market for health insurance and elimination of the state and federal “exchanges.”  Professor Brody suggests that this would allow the free market to work since the carriers would want to attract people to their products in order to collect the stipend-related premiums.  If a stipend were not used, it would be added to next year’s stipend pool with the expectation of getting more people to buy insurance.  Of course, everyone would have the option to buy better coverage with their and/or their employer’s money.

The program would allow families to pool stipends in order to acquire family coverage, and it would allow employers to purchase supplemental plans as an employment attraction tool.

Professor Brody suggests that this approach keeps the government out of the doctor-patient relationship, eliminates the need for a health care bureaucracy, and maybe best of all, puts Congress in the position it is intended to be in:  passing laws regarding funding and revenue.

I assume that Professor Brody would want to retain those aspects of health insurance coverage that seem to please people, e.g., no pre-existing condition limitations, no annual or lifetime coverage limits, coverage for children, etc.  Of course, these are items that have increased premium costs.

Although there have been suggestions to “fix” the Act in both Houses of Congress, no one seems to have embraced a program that would change the landscape and retain the beneficial aspects of  health insurance reform.  As a market-based suggestion, maybe Professor Brody is on to something.

We would love to hear your suggestions for improving the current system.

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