December 14, 2016

Replacing the Affordable Care Act the Right Way

A Mercatus Policy Primer

Repealing and replacing the Affordable Care Act (ACA) has been announced as one of Washington’s top priorities for 2017. 

In a new study by the Mercatus Center at George Mason University, Senior Research Fellow Brian Blase notes that successful, sustainable reform must simultaneously improve healthcare quality and put downward pressure on prices. The only surefire way to achieve this is by replacing the ACA’s government-centric approach with a consumer-centric approach that realigns incentives, unleashes market forces, and increases competition. 

Blase gives a brief overview of why the ACA failed, discusses general problems that health policy reform should address, and suggests six key focus areas for the ACA replacement plan:

  1. Realigning incentives so that consumers focus on value
  2. Sensibly addressing the preexisting condition problem
  3. Promoting portable, longer-term insurance
  4. Providing financial assistance for lower-income people to purchase health care
  5. Capping the exclusion for employer-sponsored insurance
  6. Fundamentally reforming Medicaid

Blase concludes:

"As Congress and the incoming Trump administration consider how to replace the ACA, they should aim to (1) reduce the government bias in favor of comprehensive insurance, (2) fundamentally reform Medicaid by better aligning incentives of states to be concerned about the value of spending, and (3) expand market-oriented reforms such as HSAs [Health Savings Accounts]. States should support these efforts by reducing insurance mandates and eliminating state rules that restrict competition and innovation."

To schedule an interview with Brian Blase, contact Camille Walsh at cwalsh@mercatus.gmu.edu or (504) 338-8785.