Ryan-Coburn, Ryan-Rivlin and ACA

Ezra Klein has been writing that many of the policy attributes, mechanisms and challenges facing the Affordable Care Act (ACA) are similar to those of the Ryan-Rivlin plan and what Klein calls Ryan-Coburn.  Ryan-Coburn is The Patients’ Choice Act (PCA) that was introduced into the last Congress, and is what I think was the most comprehensive Republican health reform proposal put into bill form.  Co-sponsor Sen. Richard Burr (R-NC) has said the PCA will be reintroduced in this Congress.  A few quick thoughts about the PCA and the ACA:

  • As Reihan Salam notes, the PCA would completely end the tax preference of employer paid insurance; the ACA has a back-door capping of this subsidy via the Cadillac tax which is delayed until 2018.  A compromise would cap the tax exclusion that PCA wants to end, and do it sooner than 2018.
  • The tax credit in the PCA [Update: I erroneously wrote ACA here; this applies to the Patients’ Choice Act, the Republican plan] could be spent in an exchange in which pre-existing conditions were banned, or on any plan sold outside the exchange; insurers would not have to provide policies in the exchange, and those sold outside of exchanges could use medical underwriting.  This is possibly the difference Rep. Ryan says exists between ACA exchanges and how he would do it, but if so I think it presents problems.  I wrote this in August, 2009:

“Because the tax credits can be used to buy plans both inside and outside of the state-based exchange, there is a danger that only the sickest patients will seek coverage via the exchange, since coverage cannot be denied. If this happened systematically, it could result in death spiral whereby only poor risks are included in exchange-based plans. However, the Plan notes that exchanges “shall develop mechanisms to protect enrollees from the imposition of excessive premiums, reduce adverse selection, and share risk.”” (quote original, emphasis added now)

Specificity about what those mechanisms would be are needed to be able to evaluate the proposal fully, and there is a lot of policy to be fleshed out in that short highlighted sentence.

  • The PCA included the creation of a Health Services Commission to broadly apply cost effectiveness research that I described this way in August, 2009:

“The most intriguing aspect of the Act is the creation of a Health Services Commission, to be run by five commissioners appointed by the president and confirmed by the Senate. The purpose of the commission is to “enhance the quality, appropriateness, and effectiveness of health care services through the publication and enforcement of quality and price information.”

Here is a detailed post running through Title VIII of the PCA (pages 206-215 of the bill) that would have created the Health Services Commission.  Don’t take my word for it, read it for yourself.  Keep in mind that the PCA was introduced in May, 2009, around one month before the first House Committee reported out a bill. So, the most comprehensive Republican plan actually proposed a much stronger cost effectiveness board prior to the IPAB which is now so politically controversial. This fact and the later rhetoric used against the IPAB by opponents of the ACA is ironic at best.

If we could focus on the policy outside of the politics (which seems impossible) a deal has long been in the wide open.  If we could agree to a political compromise on coverage (would rolling acute care Medicaid into exchanges bring along Republicans?; if yes, count me in) we could then focus on costs, which will take us the next 30 years to get straight.  If we could just focus on the policy….

Update: added some links.  Another update: Reihan Salam with more. Update: 3/25-fixed error that is noted above.

About Don Taylor
Professor of Public Policy at Duke University (with appointments in Business, Nursing, Community and Family Medicine, and the Duke Clinical Research Institute). I am one of the founding faculty of the Margolis Center for Health Policy, and currently serve as Chair of Duke's University Priorities Committee (UPC). My research focuses on improving care for persons who are dying, and I am co-PI of a CMMI award in Community Based Palliative Care. I teach both undergrads and grad students at Duke. On twitter @donaldhtaylorjr

5 Responses to Ryan-Coburn, Ryan-Rivlin and ACA

  1. AB says:

    I think Ezra has been way oversimplifying PPACA, basically saying that if you like a plan with subsidized exchanges you should like PPACA. There is a lot of bad legislation in PPACA that is completely unrelated to one’s opinion on a subsidized exchange.

    But I agree with you 100% that we’ll never get past the politics.

  2. Cycledoc says:

    These proposals violate the KISS principle (Keep It Simple Stupid).

    It seems to me that the proposals in all their glorious complexity still encourage segregation of risk which insurers love; appear to be silent on those not purchasing insurance (the mandate) and appear later for care; and how to cap the excessive expectations (access of all involved–patients providers, suppliers. Their complexity is an invitation to game the system even more than now.

    • Austin Frakt says:

      @Cycledoc – Actually, risk-adjusted subsidies can help with selection, though not perfectly. I know what would be perfect in that regard, but it will never happen. Half is better than none.

      The ACA has a mandate. Medicare part A is, essentially, mandatory. Part B is effectively so, though not strictly. Nearly everyone enrolls. With subsidization so high, it’s not really at risk for gaming.

      Expectations are a problem, but that’s system-wide.

      I can guess what you’re getting at with KISS, but, as I said, it won’t happen.

  3. AK says:

    I’m a bit confused by your statement about tax credits, particularly “The tax credit in the ACA could be spent in an exchange in which pre-existing conditions were banned, or on any plan sold outside the exchange.”

    My understanding is that premium tax credits are only available to those who purchase insurance through an Exchange; the tax credit would be a way to ensure that more people utilized the Exchange, thus reducing the problem of adverse selection and (hopefully) avoiding the death spiral. Can you explain the above statement so as to clarify this issue?

  4. Don Taylor says:

    @AK
    That is a mistake….the tax credit in the Patients’ Choice Act could be spent in or out of the exchange…..Thanks for flagging error that I will now change.
    Don

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