Should consumers be compelled to buy health insurance? Should the government regulate prices for health care services? Such questions should guide understanding and evaluation of reform proposals. (Photo: Shutterstock)

Single-payer. Medicare for All. Medicare for more. Public options. ACA repeal. There are a lot of competing ideas as to what the best way to reshape our health care system is, and legislators continue to debate at the state- and national level, all with little to show for it.

Why is it so hard to develop a clear vision for health care reform? The issue lies, in part, in how vague and encompassing the term is. For some, the goal of health care reform is to lower health care costs, while for others it's about removing barriers and increasing access to care.

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"Candidates and others describe their plans using such terms as universal coverage, single payer, Medicare for All, public option, market-based reforms, and protections for pre-existing conditions," the Urban Institute's Linda J. Blumberg writes in a recent paper. "But watching debates, listening to news reports, or attending public forums can leave people confused about what each plan includes and uncertain about the differences between them."

In her paper, "Cutting through the jargon," Blumberg presents five questions that policymakers (and the constituents voting for them) should consider when evaluating a health care reform proposal, as well as the benefits and trade-offs of different responses to each.

1. How broadly should the costs of the sick be shared with the healthy?

One common critique of Medicare for All is the increase in government spending and resulting taxes on Americans. For some, the increased taxes will be cancelled out by the decrease in out-of-pocket spending, but not for all.

"How much health care costs are shared depends on how much people of different health statuses share in the population's total health care costs," Blumberg writes. "For example, many people enrolled in an insurance plan that covers few benefits or requires lots of out-of-pocket spending when accessing care does not spread health care risk much. Large numbers of people contributing to a comprehensive insurance plan does. Large numbers of enrollees with low health care risk in their own separate insurance plan do not spread costs broadly, while large numbers of people of diverse health care risk do."

Our current market-based system uses segmented systems of risk (and costs calculated accordingly), while a single-payer system would spread the risk across the entire insured population.

2. How important is reaching true universal coverage? How many US residents must be insured?

Under true universal coverage, everyone would be covered by insurance–whether they want to be or not. The ACA sought to encourage insurance enrollment through both financial incentives (subsidies) and penalties (the individual mandate). Still, many Americans remain uninsured, for a variety of reasons.

A truly universal system would seek to offer coverage to everyone, using methods such as greater financial incentives and automatic enrollment. But, writes Blumberg, "The trade-offs become political backlash associated with compelling full participation and requiring households to contribute to the costs either through premiums (e.g., some hybrid public-private approaches) or taxes (e.g., single payer) versus leaving some people uninsured, along with the resulting uncompensated care and unmet medical need."

3. How generous should federally financed subsidies of premiums and cost-sharing be?

One major issue with our current health care system is the high cost of seeking care. Even for those who never visit a doctor, the monthly insurance premiums can be a significant financial burden. Many reform efforts seek to alleviate this cost burden through government subsidies, but the question of how such funding should be distributed is an issue of disagreement.

"A given amount of government funding can either be concentrated on low-or middle-income people or be spread among people of all incomes," Blumberg notes. "The former approach has a larger effect on affordability and likelihood of voluntary enrollment,but political support for reform may broaden among high-income voters if they too can expect to receive assistance."

4.How should reform options be financed?

Speaking of government subsidies, one major point of contention of any health care reform proposal is who foots the bill. Should consumers still be required to pay premiums, or should health care be paid exclusively through tax revenues?

"Premium financing spreads the costs of insurance coverage broadly across enrollees, implicitly conveying a message of personal responsibility in financing one's care and reducing the need for politically unpopular tax increases," Blumberg writes. "But premiums alone cannot develop systems that provide adequate and affordable coverage to low-and middle-income people."

5.Should there be regulations limiting the prices paid to health care providers of different types, and if so, how broadly should those regulations apply, and how should prices be set?

As recently as 2018, the United States spent $3.6 trillion annually on health care, with everyone from drug manufacturers to insurance companies and large health care systems coming under fire for what many consider inflated prices. Currently, Medicare and Medicaid cap reimbursement rates for providers, a move that some think should be expanded. The issue, of course, is balancing government regulation with free-market competition. And while set rates would result in lower costs across the board for consumers, it could potentially hurt providers and discourage health care innovation.

"The lower the provider prices are set, the greater the reduction in health care costs, but the lower is the income of health care providers," Blumberg writes. "We do not know what level of pricing would best balance cost containment, access to care, and quality of care. Plus, the more people to whom the regulated prices apply, the higher the prices may need to be to reduce access and quality concerns."

Understanding the possible answers to these questions can help consumers better understand current health care reform proposals as well as guide their opinions on future proposals. In her paper, Blumberg goes on to apply this method to three proposals: ACA repeal, ACA reform with the addition of a public option, and a full single-payer system.

"An educated consumer of public policy ideas should be aware that there is no perfect solution," Blumberg concludes. "All reforms will yield advantages and disadvantages, gains and losses. The challenge is finding a policy that represents a broadly accepted set of trade-offs."

Read more:

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• Study: Public option plans could bring premiums down
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