Pipes: How the GOP can get tough on health care
Nearly eight in 10 Americans worry “a great deal” or “a fair amount” about the availability and affordability of health care, according to polling from Gallup.
So it’s surprising that the Republican Party’s platform this year doesn’t devote much space to the topic. It’s even largely silent on the Biden-Harris administration’s disastrous policies — from restricting short-term health plans, to placing price controls on prescription drugs, to providing overly generous premium subsidies for coverage through Obamacare’s exchanges.
Republicans shouldn’t cede health care to the Democrats. Voters want to hear what they plan to do on the issue. Market-based reforms and a smaller role for the federal government can be vote-getters.
Just eight years ago, the GOP’s 2016 platform focused on market-oriented, fiscally responsible policies such as raising Medicare’s eligibility age, restructuring Medicaid around block grants to the states, and repealing the Affordable Care Act. This time, Republicans seem to have abandoned strong policy positions in favor of vague promises.
Consider the GOP’s promise “to fight for and protect . . . Medicare with no cuts, including no changes to the retirement age.”
Budget math will make that promise hard to keep. Medicare’s Part A hospital trust fund will run out of money in 2036, according to the Medicare Board of Trustees.
Gradually increasing Medicare’s eligibility age would help preserve the program for future generations, who are living longer and healthier lives than when the entitlement began almost 60 years ago. In the last six decades, the number of Americans aged 85 and up has increased more than sixfold. It makes sense to adjust the age for Medicare eligibility to align with increases in longevity — especially given the program’s long-term fiscal challenges.
In the platform document, Republicans also promise to “increase Transparency, promote Choice and Competition, and expand access to new Affordable Healthcare and prescription drug options.”
That’s good but vague. Let’s fill in the gaps.
Republicans can start boosting “Transparency,” for example, by enforcing the Trump administration’s federal regulations requiring hospitals to publish their prices in accessible, machine-readable files. Nearly two-thirds of hospitals still aren’t complying.
To “promote Choice,” Republicans can roll back the Biden administration’s restrictions on short-term health insurance. Short-term plans can consider an applicant’s health status and history when setting premiums. They’re also exempt from the Affordable Care Act’s mandate that insurance cover ten “essential health benefits” regardless of whether someone wants or needs them. So they can cost much less than exchange coverage.
Roughly 3 million people signed up for short-term plans in 2019. But this March, the Biden-Harris administration effectively banned them by limiting their duration to last just three months with an option for a one-month extension.
Republicans can increase “Competition” by repealing the price controls that Democrats have imposed on prescription drugs through the Inflation Reduction Act. These price controls will undermine the incentive for generic manufacturers to enter the market once drugs go off-patent.
As for expanding “access” to new medications, the IRA’s price controls are also driving drug manufacturers to slash investment in research and development. Getting rid of those controls would provide an immediate boost to American innovation.
Possibly the best opportunity for the GOP to generate short-term savings on prescription drugs is to rein in the parasitic role of pharmacy benefit managers. PBMs extract big discounts and rebates from drug makers in exchange for giving them prime placement on their insurer clients’ formularies, or lists of covered drugs.
But those savings generally don’t make their way to patients at the pharmacy counter. Insurers and PBMs keep the bulk of those savings. Patients ought to share in those savings.
There’s a lot of bad health policy out there. Republicans can win big with voters by filling in their platform’s blanks.
Sally C. Pipes is President, CEO, and Thomas W. Smith Fellow in Health Care Policy at the Pacific Research Institute. Her latest book is “False Premise, False Promise: The Disastrous Reality of Medicare for All” (Encounter 2020). Follow her on X, formerly Twitter, @sallypipes.