Opinion: Trump policy will lead to more affordable coverage

Donald Trump's surprising victory in Tuesday's presidential election raises a host of questions about what will happen over the next four years.

But one thing is certain-Obamacare's days are numbered.

PipesMore than any other issue, the president-elect and the Republican congressional majority agree on the need to repeal and replace President Obama's signature health law. Better yet, despite Democrats' accusations to the contrary, the GOP has a replacement plan ready, too.

That plan is part of House Speaker Paul Ryan's "A Better Way" reform agenda. It should be converted into legislation-complete with cost estimates-and be the first bill that Congress sends to Trump's desk after inauguration on January 20.

Ryan's plan would replace Obamacare's cost-inflating individual mandate and guaranteed-issue with a less onerous-and more affordable-coverage guarantee. It would eliminate the employer mandate and ban insurers from denying coverage to anyone who had maintained continuous coverage over the prior year.

That would give consumers a strong incentive to get-and stay-covered, rather than buying insurance prior to receiving treatment when they are sick and then cancelling it immediately afterward, as Obamacare effectively encouraged.

In place of Obamacare's complicated scheme of income-based insurance subsidies, the GOP would offer refundable tax credits directly to individuals. The credits would be pegged to age, with older Americans receiving more generous assistance.

Individuals and families could use their tax credits to purchase whatever coverage suited their needs and budget. No longer will they be confined to a limited array of government-approved essential benefit options on a state or federal exchange.

And if they choose a plan that costs less than their age-based tax credit, they can deposit the difference in a Health Savings Account to cover future out-of-pocket medical expenses.

Patients unable to find affordable coverage in the private market, particularly for those with chronic or pre-existing conditions, could enroll in a state-based high-risk pool. The Ryan plan would provide $25 billion over 10 years in federal assistance to these state programs.

These high-risk pools would drive insurance premiums for most Americans down even more, as the standard risk pool would contain fewer high-cost patients.

Taken together, these reforms would preserve access to coverage even as they reduced premiums by fostering more competition among insurers. And by giving ordinary patients greater control over their healthcare dollars, they would empower people to demand lower prices, price transparency, and better service in the health sector-just as they do in the rest of the economy.

Congressional Republicans have been trying for over six and a half years to repeal Obamacare and replace it with their own market-based reform package. But the law's namesake has always stood in the way. Starting in January, that will no longer be a problem.

Sally C. Pipes is president, CEO, and Thomas W. Smith Fellow in Health Care Policy at the Pacific Research Institute. Her latest book is The Way Out of Obamacare (Encounter, 2016).