The Wharton School's Mark Pauly has co-authored an article (with Duke's Frank A. Sloane and Sean D. Sullivan at U. Washington) arguing that the free preventive care services mandated by the ACA to be covered by all insurance plans should be subject to cost-benefit analysis. Currently they are not; the decisions of the two entities that determine which preventive services must be provided for free "are based on a comparison of health benefits and risks alone," as Rebecka Rosenquist summarizes on the blog of the Leonard Davis Institute at Penn. She further notes:
Forgive me for tossing out a couple of thoughts before reading the full paper. First, the ACA's mandated Essential Health Benefits, of which the free preventive services are a part, have long been a favored whipping boy of conservative critics of the ACA who complain that the law has driven up the cost of insurance for the unsubsidized. But the EHBs are not the main drivers of the cost increases triggered by the ACA. As Pauly himself found in a NBER study, guaranteed issue -- the guarantee that one's health or medical history won't be factored into the cost of insurance -- accounts for the lion's share of the cost increase.
That's not to say that the EHBs or the preventive care mandates should be immune to scrutiny or change. The smorgasbord of mandated free services has often struck me as somewhat arbitrary, especially when considered in light of the sky-high deductibles attached to many plans offered on the ACA exchanges (and increasingly, in employer-sponsored insurance). Those deductibles are a real problem for plan holders who earn too much to qualify for the strong Cost Sharing Reduction available to those with incomes below 200% of the Federal Poverty Level (weaker CSR is available to those between 200 and 250% FPL). It seems to me that the free services might be a viable target for conservative reform -- in a direction opposite to that proposed by Pauly et al.
What if, instead of providing mandatory free yearly checkups, mammography, colonoscopy, cholesterol testing, etc., the ACA offered a voucher for a fixed amount of free service ($300? $500?) yearly? Let plan holders decide what their most urgent (moderate-cost) needs are, and let the deductible kick in after a plan holder has got at least some value out of the insurance.
This idea occurred to me when I was trying to scope out how a conservative governor might rejigger the ACA under a section 1332 waiver -- that is, offer coverage "at least as comprehensive" as that mandated by the ACA, but with more individual choice. I don't know whether it's a good idea, but it seems to me at least less harmful than other proposed ways to amend the ACA's ground rules for comprehensive coverage -- better, for example, than proposals creating a "copper" plan option offering even skimpier coverage -- and higher deductibles -- than the ACA's bronze plans.
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* The other agency setting the preventive services is the Advisory Committee on Immunization Practices.
Pauly and colleagues note that the groups “have no responsibility for a total expenditures budget for medical services that would constrain their recommendations.” They cite an analysis that shows a 1.5 percent increase in private insurance premiums due to the cost of the US Preventive Services Task Force recommendations. “When they do recommend a new costly vaccine or service, that recommendation usually increases both public and private spending (including insurance premiums).”Indeed. Outcomes research funded by the ACA should also shape Medicare reimbursements, but demagogic screams about health care "rationing" made that impossible. Recall, too, the outcry in November 2009 when the US Preventive Services Task Force -- one of the two agencies* charged with setting the ACA's free preventive services mandates -- downgraded its mammography recommendation for women under 40, deeming that the decision whether to undergo the test should be based on individual circumstance. The ACA drafters rushed to mandate free mammograms at any age.
Forgive me for tossing out a couple of thoughts before reading the full paper. First, the ACA's mandated Essential Health Benefits, of which the free preventive services are a part, have long been a favored whipping boy of conservative critics of the ACA who complain that the law has driven up the cost of insurance for the unsubsidized. But the EHBs are not the main drivers of the cost increases triggered by the ACA. As Pauly himself found in a NBER study, guaranteed issue -- the guarantee that one's health or medical history won't be factored into the cost of insurance -- accounts for the lion's share of the cost increase.
That's not to say that the EHBs or the preventive care mandates should be immune to scrutiny or change. The smorgasbord of mandated free services has often struck me as somewhat arbitrary, especially when considered in light of the sky-high deductibles attached to many plans offered on the ACA exchanges (and increasingly, in employer-sponsored insurance). Those deductibles are a real problem for plan holders who earn too much to qualify for the strong Cost Sharing Reduction available to those with incomes below 200% of the Federal Poverty Level (weaker CSR is available to those between 200 and 250% FPL). It seems to me that the free services might be a viable target for conservative reform -- in a direction opposite to that proposed by Pauly et al.
What if, instead of providing mandatory free yearly checkups, mammography, colonoscopy, cholesterol testing, etc., the ACA offered a voucher for a fixed amount of free service ($300? $500?) yearly? Let plan holders decide what their most urgent (moderate-cost) needs are, and let the deductible kick in after a plan holder has got at least some value out of the insurance.
This idea occurred to me when I was trying to scope out how a conservative governor might rejigger the ACA under a section 1332 waiver -- that is, offer coverage "at least as comprehensive" as that mandated by the ACA, but with more individual choice. I don't know whether it's a good idea, but it seems to me at least less harmful than other proposed ways to amend the ACA's ground rules for comprehensive coverage -- better, for example, than proposals creating a "copper" plan option offering even skimpier coverage -- and higher deductibles -- than the ACA's bronze plans.
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* The other agency setting the preventive services is the Advisory Committee on Immunization Practices.
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