Health reform policy is hard, Len Nichols, director of the Center for Health Policy Research and Ethics at George Mason University, told brokers gathered Tuesday in Washington for the National Association of Health Underwriters’ annual Capitol Conference. That’s why, he said, legislators need their help.

Nichols broke down numerous ways Congress has proposed to change the Affordable Care Act, such as by removing government from healthcare altogether, reducing taxes or reversing entitlements.

Regardless of what path is ultimately taken, many agree that the definitive problem is healthcare and health insurance cost too much. “There are some that think the most important thing about healthcare spending over time is not the level [of spending,] but the growth rate,” Nichols said. “Therefore, the most important thing is to block grant Medicaid and have fixed growth rates, turn Medicare into a voucher program that has fixed growth rates, and then let the market take care of itself.”

Len Nichols speaks at NAHU's Capitol Conference on Feb. 14, 2017.
Len Nichols speaks at NAHU's Capitol Conference on Feb. 14, 2017. Cort Olsen/EBA

Also see: GOP gives NAHU a long timeframe on healthcare reform changes.”

Prior to Nichols’ presentation, Sen. Bill Cassidy (R-La.) explained his ACA replacement proposal, The Patient Freedom Act, which would provide states with the freedom to determine what healthcare plan works for them.

Nichols agreed with Cassidy on the notion of having more freedoms and less guarantees, saying freedom of choice will give consumers, carriers and brokers alike more options for care.

“There are lots of ways to give freedom to people, to states, to insurers [while preserving guaranteed] coverage to avoid political risk of a backlash,” Nichols said. “Now, let’s be clear, that will require — as Sen. Cassidy’s bill does — that we keep the [tax-favored status of employer-sponsored health insurance], or at least keep most of the money, because you will not be able to maintain coverage or enable those who are truly sick to get access to this stuff” without it.

In order to build a reliable and affordable healthcare plan, Nichols reiterated a plea by Cassidy for brokers to share their knowledge of the industry with legislators in order to construct a fiscally sound strategy. “I hope Sen. Cassidy’s wisdom takes momentum. And you can make that happen by spreading some of your knowledge and getting us to where we need to be,” Nichols told the more than 1,000 NAHU members in attendance.

The marketplace needs competition
While legislators work on developing a replacement for the ACA, Nichols said competition within the health insurance market needs to increase. Between 2016 and the beginning of 2017 the opposite has happened, he pointed out.

“Eighty-five percent of people had choice of three or more insurers in the marketplace in 2016 and now that’s down to 57%,” Nichols said. “It means insurers have pulled out across the country.”

Nichols added that competition is also the best solution for drug pricing issues, saying because the U.S. does not want price regulation, competition will control pricing. But, he said, granting monopolies to innovators harms consumer welfare.

“We are over-encouraging innovation and we are under-encouraging competition,” Nichols said. “Either we are going get more competition in the drug market or we’re going to have a revolt and go buy our drugs from France or Canada, which would be a disaster.”

How repeal and replace can succeed
Nichols said the transition to whatever form of ACA replacement Congress decides on needs to follow the recommendations Janet Trautwein, CEO of NAHU, made in her recent testimony to the Senate HELP Committee during the hearing titled, “Obamacare Emergency: Stabilizing the Individual Health Insurance Market.”

“You’ve got to fix the special enrollment periods,” Nichols said.

Some of the other recommendation Nichols made included addressing high risk pool rules and subsides. “We’ve got to maintain momentum in moving the healthcare delivery system to value,” Nichols said. “Right now, the fee-for-service payment system does not work.”