One week ago, the Supreme Court heard King v. Burwell, the challenge to subsidies applied through the federal exchange. If sustained, this will directly affect approximately 237,000 subsidized Michigan residents. (My calculation using the 2014 HHS subsidy rate of 87%, since the 2014-15 enrollment of 311,000 is not yet fully analyzed by HHS.) Will Michigan’s citizens and legislature join one U of M expert and the governor of Michigan in revisiting the Michigan state exchange question, which failed twice under voter outrage? I strongly urge against such action.
States in the same situation have considered creative paths to a nominal state exchange: piggy-backing onto existing state exchanges, or looking to HHS for a form which “hereby declares the Michigan portal to the federal exchange to be a state exchange for purposes of ACA subsidies.” Spectacular state exchange failures like Maryland, Oregon and Nevada effectively nix the idea of erecting an expensive new state exchange to original specifications.
But has anything really changed? Should Michigan now reverse its position on the Exchange?
Nothing has changed, except to highlight the failures of the ACA. The federal exchange has signally failed to decrease costs in Michigan. A state exchange would still expose Michigan patients to this burdensome federal program, expose Michigan taxpayers to greater state budget increases, and expose Michigan employers to financial penalties to balance the subsidies. Robbing Peter to pay Paul is no solution to expensive healthcare.
In addition, I say “No” to a state exchange because there is a better way. As federal policy makers prepare their responses to a possible change in ACA interpretation, Michigan policy makers and residents have better options than waiting to follow their lead.
Patients and Providers
Federal programs like Medicare, Medicaid, the VA, and the ACA by definition provide “population care.” Dividing us into demographics, they collect masses of data on us, and tell us what care we get based upon their research experts’ definition of “best practices.” In this scenario, society’s needs hold center stage. Payment is from society as a whole, and the pot is fixed. Big and clunky bureaucracy delivers rigid, slow service. Patients’ ideas and choices for their own care fade into the background. “Good” physicians are the best data-collectors and administrators. Forget what is best for you personally.
Is this really the best we can do?
I say, most definitely not. We can and must do much better. The core of care is where it always has been: between a patient and a provider.
Complexity costs us. Without the subsidies, exchanges, insurance mandates, codes, enrollment and coverage ambiguities of population care, MI residents have an opportunity to return to individual care. Nothing is more affordable, and nothing can surpass the excellence of care based upon an individual professional’s knowledge and relationship with you as an individual patient. Dramatic price deflation results from simplifications like these:
- 10,600 Michigan residents are enrolled in the Sharing Organizations, a far more stable alternative to date than Obamacare.[1]
- By cutting out the middle man, concierge and direct pay physicians across the US are offering care that suits all income levels. Michigan has great potential to innovate affordably by expanding a good start in this growing movement.
State Policy Makers
“If it moves, tax it; if it keeps moving, regulate it; if it stops moving, subsidize it.”
Reagan never saw the ACA, but was there ever a more perfect description of the plight of modern healthcare? With all due respect to the central planners among us, theirs is not the way to greater abundance, excellence, or lower prices in healthcare. Rather, Michigan policy-makers should acknowledge the forces of supply and demand by removing regulatory barriers to affordable care in Michigan. Some have already started:
- Transparent pricing for hospitals: SB 147, introduced by Senator Joe Hune. Hospital A may charge 50% more than Hospital B for a given surgery. Shouldn’t we be able to shop around before signing up for expensive care?
- De-commission Certificate of Need, soon to be enrolled in the House. Why should industry representatives have the final word on new healthcare services entering the market?
- Dozens of state mandates add to the cost of each health insurance policy sold in Michigan.
- Occupational licensure increasingly acts as a tax upon Michigan healthcare, especially harmful to entry-level and specialty jobs.
- General regulations affect healthcare more than any other industry. What if hospitals, nursing homes, and physicians had their regulatory burden cut in half?
- State appropriations for health corporations supposedly provides care and jobs, but since when is the state better than taxpayers at choosing where to spend our money?
Michigan has a long way to go to welcome medical innovation and excellence, patient choice and individual care. Our time is limited, and the need is great. Let’s get together on this!
[1] Updated 8-31-2015 to link to Sharing Organization blog post.