“I pay you to get on first, not to get thrown out at second.” When Oakland A’s General Manager Billy Beane issued this edict to his baseball team in Moneyball, he was referring to the fact that you can’t score if you never make it past first base.
Now that the House of Representatives has narrowly passed the American Health Care Act, will it keep moving, or get thrown out in the Senate?
In framing the debate, President Trump and the GOP would be wise to play moneyball. Moneyball describes a business strategy based on baseball principles, where teams use data to analyze the market for players and then buy what is undervalued and sell what is overvalued.
To date, most people who oppose the Affordable Care Act have focused almost entirely on coverage — more accurately, on who could lose coverage. It’s an easy sell. The thought of losing or not having access to health insurance is scary. When people have little free time to learn the details of complex and wonky healthcare legislation, “fake” news is persuasive.
Therein lies the problem.
Like a slugger who can’t hit in the clutch, insurance coverage is highly overvalued as our pivotal healthcare issue. The pre-existing conditions debate revealed that a vast majority of Americans have access to healthcare coverage via their employers, or through the government’s Medicare, Medicaid, and Department of Veterans Affairs programs. Even with more than 2,700 pages and billions of dollars of expenditure, the “gains” Obamacare made to fill coverage gaps came predominantly from expansion of the already substandard and struggling Medicaid program.
In the meantime, despite being a prime concern of middle America, the rising cost of care and medications have been significantly underestimated and underreported. Cynthia Cox of the non-profit Kaiser Foundation highlighted the issue when she noted that “out-of-pocket costs for prescription drugs actually increased from 2013 to 2014.” In 2015 alone, prescription drug costs totaled $425 billion.
So if the GOP stays away from the shiny apple coverage debate, what undervalued cost-saving initiative should they jump on like a hanging curve ball?
Simply, three letters: HSA. If the AHCA’s overhaul of health savings accounts is prioritized and the bill’s potential to free Americans from their dependence on a laminated insurance card as healthcare’s primary form of payment is realized, the GOP stands to win a significant victory.
HSAs have been around since 2003 but were essentially benched during Obamacare, because they were viewed as a deterrent to exchange participation.
Examples:
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HSAs had to be paired with a “high-deductible” plan, where insurance doesn’t kick in until an individual has incurred $1,300, or $2,600 for a family.
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HSA contributions were capped at approximately 50 percent of the current annual maximum out-of-pocket costs of $6,550 for individuals and $13,100 for families.
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Spouses couldn’t contribute to the same HSA.
The AHCA fills all these gaps while maintaining the advantage HSA dollars have over funds used for insurance premiums:
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Contributions are tax deductible.
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Contributions gain interest.
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Withdrawals are tax free when used for qualified medical expenses.
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Contributions can be used to pay Medicare premiums.
The real game changer here is that HSA dollars are now freed up to pay for over-the-counter medications. Who hasn’t at some point relied on OTCs as a substitute for a visit to the doctor’s? Think about it: Tax-deductible, interest-earning contributions made by you (or hopefully, your employer), readily available to pay for your Claritin, Prilosec and aspirin. Better yet, there will be dollars left over to pay for that test your doctor ordered at a “cash” discount from insurance prices.
Cardiologist and national thought leader Kevin Campbell sees the benefits:
My greatest challenge as a physician is not the diagnosis and treatment of disease. Rather, it is finding a treatment plan that my patients can actually afford. It is essential to provide patients with access to the drugs they need. Tax-free dollars and HSA accounts may help facilitate increased access for my patients.
If dollars are freed up so that OTC usage increases, the savings will be significant. A 2012 study by the Consumer Healthcare Products Association showed $102 billion in annual savings from OTC use and a marked increase in access to medicine. On average, every dollar spent by consumers on OTCs saves $6–$7 for the healthcare system as a whole.
“Do you believe in this thing or not?” said Billy Beane, when challenged about his moneyball approach. The GOP should ask the same question. Do they believe in repeal and replace, or not? If they do, it’s time to stop playing coverage defense and start letting Americans know what cost-savings they can expect.
That is, if they want the president’s autograph on a final passed AHCA.
Bryan Rotella (@RotellaLegal) is a contributor to the Washington Examiner’s Beltway Confidential blog. He is CEO of Rotella Legal Group (RLG) serving as general counsel and healthcare policy advisor to businesses, provider groups and political campaigns nationwide.
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