Non Existent Universal Healthcare Plan From the Right
Posted on February 8, 2017
It’s been 6 years and some 60 votes to abolish Obamacare without a replacement (except “We are going to have a GREAT plan. I PROMISE!”). Being in charge has forced the Republicans to start specifying an actual plan. As of now, Paul Ryan’s brand new “Better Way” plan is the leading contender, and 3 of the 4 Kansas Congressdenizens have signed on to it.
I’m not saying Obamacare has no serious flaws. I am saying the right wingers in the US congress are out to make them worse.
Right wingers have three realistic objections to Obamacare:
1. Insurance prices too high
2. Insurance prices going up too fast
3. The much hated tax on people who don’t buy insurance.
None of their plans do anything useful on #1 or #2, and all of them actually remove some price controls.
On #3, all of them do remove the tax on failure to buy insurance. That means:
1. More people won’t buy insurance.
2. To partly offset that they will offer much bigger subsidies to health insurance–leading to a large deficit in the budget. (Suddenly deficits don’t matter.)
3. According to all models the number of uninsured will increase. Since uninsured people tend to be healthier than average, insurance premiums will tend to rise.
Also more insured people will show up at emergency rooms, increasing costs shifted to everyone else.
All the rest is smoke and mirrors.
The Ryan plan and nearly all other current or likely future Republican plans share many common features:
1. They eliminate the goal of universal coverage, and will actually increase the number of uninsured. (Obamacare reduced uninsurance by around half, and could have done more, given Republican cooperation that wasn’t forthcoming.)
2. They drop guaranteed coverage, replacing it with a fig leaf. Welcome back preexisting condition limits, with some exceptions. (Obamacare guaranteed coverage.)
3. They will bring back a lot of cherry picking. (“Cherry picking” is a fundamental insurance market failure. It means that insurance companies cherry-pick the healthy clients, and either refuse to cover folks (for example, with pre-existing conditions) who really need insurance or else charge very high premiums. Obamacare largely eliminated it.)
4. To handle the overflow from cherry picking, they set up state-wide risk pools for the uninsurables, subsidized by the federal government. There is no guarantee the subsidies will be large enough, meaning that eventually they won’t. (Obamacare didn’t need risk pools because there was guaranteed coverage.)
5. To offset lost insurance, they expand Medical Savings Accounts, which is a form of self-insurance. (Any rational person would prefer real insurance to MSAs. Obamacare reduced the need for MSAs.)
6. They call for multi-state insurance markets, which is a way of diluting state regulation/protections. (Obamacare didn’t.)
7. They call for very large new federal expenditures, without (as yet) any designated funding source. (Obamacare was revenue neutral.)
8. They tend to be very complicated, with important small print. And yet they are vague and underspecified, even at this late date. (Obamacare is an actual functioning law)
9. They take this opportunity to make lots of unnecessary changes in Medicare, as a sort of drive-by shooting. E.g., they are pushing increased privatization and other changes. This is their stealthy way of getting around the electric rail of angry retired people. (In my opinion, Obamacare made no detrimental changes in Medicare.)
10. They also mess with Medicaid. Their primary goal is to block-grant it, which is a back-door way to underfund it. (Obamacare fully funded Medicaid.)
11. There is a design constraint: they must make not reduce aggregate insurance company profits. (Unfortunately, Obamacare was profitable for insurance companies, as a deal to keep them from opposing its passage.)