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Market-Based Solutions to Vital Economic Issues
Research
Aug 19, 2020

Choice, Competition, And Flexibility, Part I: Post-ACA Consumer Challenges

The Affordable Care Act (ACA) redefined the national status quo. It standardized benefit design in the individual insurance market; mandated employer-sponsored insurance (ESI) coverage in multiple markets; and rewrote insurance market and rating rules, all while creating a complex series of subsidies to support its public exchange health insurance products. The ACA’s legislative history and narrow partisan passage marked it for a lifetime of strife. Under attack by both Republicans and Democrats—including litigation brought by states in the federal courts—the ACA faces an uncertain future. The COVID-19 pandemic, driving unemployment to greater than 11 percent and driving surges in ACA exchange enrollment, raises new questions for the future of employer-based health insurance and the US multipayer system.

Previously supportive of the ACA, congressional Democrats have proposed a wide range of solutions, ranging from the deployment of a “public option” to compete against private health plans to Medicare for All, the replacement of all publicly funded and private health insurance with a single national health insurance program. Pushed by the progressive wing of the Democratic Party, the feasibility of a single-payer system was recently debated in congressional hearings in the US House of Representatives.

Here, we review current consumer challenges, the legacy of the ACA, and its effects on insurance markets. Subsequently, we review recent progressive health policy efforts targeted at cost control. In part II, seeking to build on our existing multipayer system, we discuss structures for market-driven alternatives to a public option or a single-payer system. We suggest defined-contribution (premium support) financing, a resetting of insurance regulation, and a revision of the federal tax treatment of ESI.


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