Republicans Take Control in Washington

The voters have spoken, returning former President Trump to the White House with Republican majorities in Congress. The election will have significant implications for the direction of health policy.

President Trump’s victory last night represents an opportunity to build on the health care successes of his first term, which expanded choice, competition, and transparency. The Biden administration pursued a set of policies that benefited special interests, and it’s time for a different direction that empowers patients, reforms government programs – including by eliminating waste, fraud, and abuse – and restores trust in public health agencies.

Paragon has spent much of the past three years evaluating government health programs and putting together a set of recommended reforms. Here is a review of some of our key research that can inform policymaking in the coming years.

The Affordable Care Act

There are three serious problems with the ACA: 1) proliferation of low-quality coverage that worsens care for the sick, 2) enormous fraudulent and wasteful spending that does not improve health, and 3) the loss of families’ ability to buy preferred coverage or access it from small employers. Vice President-elect J.D. Vance made smart comments about the failings of the ACA and how policy could be improved. Paragon has done work on all these areas.

Health actuaries have produced reports for Paragon on how the ACA has significantly underperformed expectations, with almost all the net coverage gains coming through Medicaid, and on the trend toward lower-quality and narrow-network plans in the exchanges, along with recommendations for improving health plan quality.

In The Great Obamacare Enrollment Fraud and a follow-up report, we exposed and quantified massive fraud in the Obamacare exchanges that benefits insurers, unscrupulous brokers and lead generator companies but costs taxpayers tens of billions of dollars. This fraud is a direct result of expanded subsidies to health insurers, which have produced windfall profits for them and enormous waste.

Paragon developed a policy reform that would provide lower-income exchange enrollees an option to receive a portion of their subsidy as a health savings account deposit rather than as a subsidy directly to health insurers. Additionally, Paragon has analyzed how the ACA market was not negatively affected—and was actually better on enrollment, premiums, and insurer competition—by states permitting short-term health plans. Paragon led opposition of a Biden administration policy to lessen consumer protections by reducing the amount of time people could have coverage through a short-term plan.

Other Private Health

Paragon’s Theo Merkel, who led much of the work on the Trump administration’s price transparency rules, authored a comprehensive analysis of the status of the rules and recommendations to improve compliance and the utility of the price information.

Theo and I coauthored Follow the Money: How Tax Policy Shapes Health Care, a paper that contained a comprehensive analysis of the tax provisions related to health coverage and care. We make a series of reforms that could inform health-related actions in a reconciliation bill, including an expansion of HSAs, building on the Trump administration’s individual coverage health reimbursement arrangement rule, and reforming Obamacare subsidies.

Paragon released a report on the benefits of Association Health Plans, advancing policies that enable small businesses to obtain the same advantages that larger employers receive when offering coverage.

Medicaid

The Biden administration decided to let the Medicaid welfare program grow to unprecedented levels by extending the COVID-19 public health emergency through the spring of 2023, which inhibited states from conducting basic eligibility checks. This led to 18 million Americans on the program in March 2023 who were no longer eligible for it, most of whom had other coverage. For these enrollees, the government was making large payments to insurers on behalf of people who used no health care.

Today, Paragon is releasing a new policy brief from Jackson Hammond on recent Medicaid rules from the Biden administration that significantly increase federal spending, raise costs for nursing homes, and benefit well-connected insurers and hospital systems with up to $250 billion of additional government spending over the next decade.

The Medicaid program is not serving those whom the program was designed for. In a report examining the likely ramifications if Florida were to adopt the ACA Medicaid expansion, we found that nearly two-thirds of new enrollees would simply replace existing coverage and that the fiscal cost would be substantial for both the state and federal government. In expansion states, existing Medicaid enrollees have had much greater difficulty obtaining doctor appointments and have been forced to go to the emergency department for non-emergency services.

The federal government should not discriminate against traditional Medicaid enrollees—low-income children, pregnant women, seniors, and the disabled—in favor of the expansion population of able-bodied, working-age adults. There is no good rationale for the federal government paying a much higher percentage of state Medicaid expenses for expansion enrollees than for traditional enrollees. An important Paragon policy proposal would end this discrimination and help traditional enrollees by equalizing these percentages over a decade.

Medicare

Paragon has produced several analyses of existing problems with Medicare payment policies as well as proposed reforms to preserve and enhance the program for future generations.

Paragon research has highlighted how current policy in traditional fee-for-service Medicare has failed to improve quality of care and stifled innovation in the health care sector. It has offered recommendations for how Medicare should pay doctors and how to improve the program’s finances, including by reducing excess spending on hospital services through site neutrality.

Paragon has also published an extensive set of recommendations to improve Medicare Advantage by increasing its cost effectiveness, advancing policy parity with traditional Medicare, and boosting the quality and flexibility of MA coverage. These policies would enable MA to transform Medicare as a whole as it grows in popularity.

Finally, Paragon has highlighted the harmful impact of the Inflation Reduction Act’s drug pricing provisions on the Part D prescription drug program, including by impeding the development of future cures and availability of coverage options.

Public Health

Paragon, under Dr. Joel Zinberg’s leadership, has been dedicated to evaluating what is important for improving Americans’ health and to examining the harmful policies and programs of various government public health agencies. He has suggested reforms that would improve pandemic and biological threat prevention and response, maintain and strengthen individual freedoms, and resist the politicization of government health agencies.

Paragon’s Freedom Wins report showed that states that prioritized personal freedom and fewer COVID-19 restrictions achieved similar health outcomes, but far better economic and educational results, than states that followed recommendations for severe lockdowns.

Paragon’s work highlighting the pandemic missteps at the Centers for Disease Control and Prevention—an agency never fully authorized by Congress—has underscored the need for a major overhaul that refocuses the agency on its core mission of protecting Americans against communicable diseases. Accountability, transparency, and a streamlined organizational structure are essential to restoring public trust. CDC reform should streamline an agency which now focuses more resources on trendy topics such as health equity and on scientific efforts that duplicate areas that are already addressed by other agencies than it does on infectious disease prevention and treatment.

Paragon’s work highlighted and criticized the Food and Drug Administration’s attempt to regulate laboratory-developed tests, threatening innovation in essential diagnostics, and efforts by the FDA to play doctor and give medical advice.

To improve agency decision-making and protect the public from administrative overreach, Paragon published recommendations supporting the restoration of Good Guidance Practices to ensure transparency, accountability, improved policies, and a regulatory process that serves the public, not the administrative state. GGPs are essential to prevent federal agencies from wielding unchecked power through informal “guidance” that bypasses public scrutiny.

All the best,

Brian Blase
President
Paragon Health Institute