Free Market Reforms to Obamacare?

By CED, Special for  USDR

Today, in light of the King v. Burwell ruling upholding the federal subsidies in the Affordable Care Act (ACA), the Committee for Economic Development of The Conference Board (CED) urged Congress to adopt market-based reforms to lower the cost of health care and improve quality and  access.

CED recommends the following steps to improve health care’s cost, quality, and  access:

  • Allow private exchanges and insurance sellers to compete with public exchanges to serve all individuals – not just the Affordable Care Act’s (ACA) restricted populations.
  • Establish an alternative national regulatory approval to allow plans to market across state lines.
  • Replace the ACA’s income-conditioned premium subsidies with a “fixed-dollar” refundable tax credit.
  • Eliminate the unnecessary individual and employer mandates, given that tax credits would be available to all.
  • Risk-adjust premium revenue. Plans would not be permitted to refuse consumers or to charge higher premiums for pre-existing conditions. Plans that care for more-costly risks on average should be rewarded for doing so.
  • Increase the flexibility of the employer role. Firms may offer plans to their employees, in competition with the other options available. Alternatively, firms may serve as exchanges to their employees, or join private multi-employer exchanges, or merely provide advice to their employees.
  • Reorient the ACA’s Independent Payment Advisory Board (IPAB) to provide information for, rather than inject remote government judgment into, the physician-patient relationship. Expand data gathering and research.
  • Encourage innovative health care delivery models that range from highly specialized care to preventive services.
  • Create specialized expert courts and a safe harbor of standards of sound practice based on new data and analysis to facilitate more-timely and less-costly malpractice decisions.

“While the ACA was upheld, our nation can do much better in terms of affordability; double-digit premium hikes are expected in 2016,” said Joe Minarik, CED’s Senior Vice President and Director of Research. “Congress should replace the subsidies with universal fixed-dollar refundable tax credits. They would be fairer and easier to administer, and the resulting competition would help all citizens have a variety of plans, at reasonable prices, to choose  from.”

Under CED’s proposal, the tax credit would cover the full cost of a low-priced plan (meeting quality and coverage standards). Consumers wanting a more expensive plan would be responsible for the extra cost, and so plans and providers would have to justify their price and quality to  customers.

These proposals are included in CED’s 2015 report, Adjusting the Prescription: CED Recommendations for Health Care Reform. The report and executive summary can be accessed here, along with a series of infographics and videos that detail the  recommendations.

About the Committee for Economic  Development
Founded in 1942, the Committee for Economic Development of The Conference Board (CED) is a nonprofit, nonpartisan, business-led public policy organization that delivers well-researched analysis and reasoned solutions to our nation’s most critical issues. CED’s work is grounded on seven core principles: sustainable capitalism, long-term economic growth, efficient fiscal and regulatory policy, competitive and open markets, a globally competitive workforce, equal economic opportunity, and nonpartisanship in the nation’s interest. Learn more at

SOURCE Committee for Economic  Development

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