“Skeletal Descriptions Of Planlike Concepts”: How The Presidential Race Is Making The GOP’s Health Care Ideas Even Worse
Every major national Republican is sure that they want to repeal the Affordable Care Act. They are much less clear about what, if anything, they would do after stripping insurance from millions of people. Two plausible Republican nominees for president — Scott Walker and Marco Rubio — issued health care plans this week. And…let’s just say there’s a reason Republicans spend a lot more time on the “repeal” part of the “repeal and replace” equation.
Indeed, to call these positions “plans,” as opposed to gestures in the direction of having a policy alternative, is probably too generous. As Jon Chait of New York puts it, they are “not so much plans as skeletal descriptions of planlike concepts.” Still, even in larval form, Walker’s plan contains several elements that are common to most Republican health care proposals, and that if enacted would result in horribly unpopular policy disasters. Here are the main features:
End the individual mandate
Most individual components of the Affordable Care Act are popular; the requirement that people carry insurance or pay a tax penalty is not. And since the mandate was very nearly the lever that gave a conservative Supreme Court majority a pretext to declare the ACA unconstitutional, Republicans have also convinced themselves that it is one of the greatest threats to liberty ever seen. So it is inevitable that any Republican proposal will advocate eliminating it, as Walker’s does.
The problem is that the popular parts of the ACA can’t be divorced from the mandate. If people are permitted to free-ride, the health insurance market can’t work. Multiple states tried to initiate ACA-like reforms without a mandate, and it was a disaster — young and healthy people decline to buy insurance knowing they can get it if they fall sick, premiums increase, more people drop out, and the market collapses. This is why President Obama — who pandered during the 2008 primaries by putting forward a plan without a mandate — recanted as soon as he was in a position to actually try to get a law passed.
Make state regulations ineffective
Whenever conservatives have a policy they would prefer not to defend on the merits, the language of federalism comes in handy. In health care, virtually all Republican plans argue for permitting the purchase of insurance across state lines. Walker’s is no exception: “My plan would allow individuals to shop in any state to find health insurance that covers the services they need at a price that fits the family budget.”
In the abstract, a policy of permitting people to shop for insurance across state lines sounds attractive. In practice, it would be a regulatory race to the bottom. Insurance companies would gravitate to the states that place the fewest regulations on insurance industries. It would therefore become easier for insurance companies to deny claims, rescind insurance (or refuse to give it in the first place), and impose hidden costs. If you think credit card companies should be a model for health insurance companies, then Walker’s plan might sound like a good idea. If you’re thinking more clearly, it’s obviously a terrible one.
Make it easier to sell junk insurance
Walker’s plan would reduce federal regulations as well. The Affordable Care Act’s requirement that insurance actually cover things would be eliminated, as would other provisions such as the popular requirement that children be allowed to stay on their parents’ plan until age 26. Other provisions of the ACA, like the ban on discrimination based on pre-existing conditions, would be seriously weakened. So at the same time as Walker’s plan would effectively eliminate many state regulations, it would also leave the insurance companies mostly unsupervised by federal regulations as well.
Conservatives would defend this awful idea by posing a choice between “regulation” and “competition.” But the problem is that health care simply lacks the features of a competitive market. There’s a reason why other liberal democracies have more state intervention into health care than the United States, not less. And by the way, they all cover more people for significantly less money.
Attack the poor
Walker’s politics are not about small government. After all, he thinks that abortion should be illegal even when necessary to save a woman’s life, and he just approved a $250 million gift of taxpayer money to hedge fund billionaires to build a basketball stadium. Rather, his politics are about assisting the rich and powerful at the expense of the poorer and less powerful.
His health care plan is no exception. Like the ACA, Walker’s plan would offer tax credits to allow people to purchase insurance. But Walker’s tax credits would be distributed on the basis of age, not income. The result, as Jeffrey Young and Jon Cohn demonstrate, would be a disaster for the non-affluent, as insurance would become unaffordable for many people at any age. And in addition, Walker also advocates savage cuts to Medicaid. The callousness Walker showed in refusing the ACA’s Medicaid expansion in Wisconsin is reflected in his health care plans.
So Walker’s plan would be an utter disaster if implemented. But it’s not just about Walker. Amazingly, some conservative candidates and pundits attacked Walker’s plan from the right. A spokesman for also-ran candidate Bobby Jindal accused Walker of collaborating with Bernie Sanders to create a plan that would make health care far less accessible to the non-rich.
Essentially, Republicans look at the state of health care circa 2009 — in which more than 16 percent of Americans were uninsured, and in which insurance companies could abuse consumers in a number of ways — and argue that even fewer Americans should have insurance and the quality of the insurance should be much worse. This is one of the many reasons that the contemporary Republican Party is simply unfit to govern at the national level.
By: Scott Lemieux, The Week, August 21, 2015
“A Vague Hand-Waving Promise Is Not A Plan”: The Republican Plans To Replace Obamacare Have Been Tried, And They Failed
Before Obamacare, the individual insurance market for people who could not get health care through their job was a nightmare. The only way for insurers to make money was to avoid getting stuck with customers who would rack up high medical bills, forcing them to expend enormous time and expense to screen potential customers for preexisting conditions. Even people who could find plans with affordable premiums had to sign contracts loaded with fine-print exclusions leaving them responsible for unexpected costs. Obamacare overhauled that market, eliminating insurers’ ability to screen out healthy customers. In the new, regulated individual markets, people buy plans regardless of their prior health status. This has been a godsend to those unable to obtain coverage before.
Republicans would repeal all these new protections. But never fear, conservatives insist. In their place will be new protections. Ramesh Ponnuru, writing in National Review, points to two protections put in place by Scott Walker’s proposal, which is the prototypical Republican “see, we do too have a plan to replace Obamacare” plan.
Ponnuru mentions two protections. The first is a provision that would “bar insurers from charging higher prices to sicker customers provided they had maintained continuous coverage.” Republicans have taken to using this line a lot, because it sounds to the average person tuning in a lot like a promise to protect people with preexisting conditions, but the last six words are crucial. Maintaining continuous coverage is really hard. We know this because Congress passed a law in 1996 letting people who have employer-provided insurance keep their plan if they maintain continuous coverage. It has proven nearly useless. Maintaining continuous coverage is really hard for people who have financial distress, and it’s harder if the insurance company has every incentive for you to miss a payment or fail to dot one of your i’s or cross one of your t’s, so they can kick you out. And, of course, in a market where insurers can charge higher prices to sicker customers, “maintaining continuous coverage” means buying insurance that’s really expensive and can deny you coverage for lots of treatments you need.
The second provision is high-risk pools. This is a special market for the customers with the most expensive medical needs. Many states have tried high-risk pools. They also work really, really badly. There are all sorts of practical barriers that make it hard to operate a special insurance system for people with the most expensive conditions. For instance, how do you determine eligibility? Tens of millions of Americans have something in their medical history that makes them a less than perfect risk, from the insurance company’s standpoint. Where do you draw the cutoff for eligibility? And how do you keep insurance companies from skimming the high-risk pools, too — after all, they’ll want to cover the least costly people in the high-risk pool, not the most costly ones.
Even if it is possible to devise solutions to these problems, the biggest single impediment is that high-risk pools cost money. There’s no magic secret in a high-risk pool that makes insurers able to sell affordable insurance to people who need lots of medical care. And where would Republicans get the money to finance the high-risk pools? They don’t say. And they all have signed the Grover Norquist pledge that they will never raise taxes under any circumstances — even if aliens come to Earth and threaten to destroy humanity unless the president agrees to raise taxes by a single penny.
The funding problem is not ancillary. There’s an old joke in which a chemist, a physicist, and an economist are trapped on a desert island, and some cans of food wash up onshore. The physicist devises a plan to smash open the cans. The chemist comes up with a plan to heat them open. And the economist says “assume a can opener.” This is the problem not just with the high-risk pools, but the Republican health-care plans as a whole. They assume the availability of funding, but the party is theologically opposed to raising revenue of any kind. Like having a can opener, if the Republicans were able to overcome their fanatical opposition to revenue, the problem wouldn’t exist in the first place. Any reform that assumes Republicans will find a way to fund it is assuming a can opener. It’s premised on a fantastical assumption. That is why, in the absence of some concrete way around the no-taxes-ever problem, a vague hand-waving promise can’t be called a real plan.
Before Obamacare took effect, different measures were tried to reform America’s cruel and dysfunctional individual health-care marketplace. The continuous-coverage protection and high-risk pools both failed. One thing that succeeded was tried in Massachusetts, by Mitt Romney. The Obama administration decided to build that model out nationally, and it has worked very well — premiums have actually come in well under projections. But since it was Obama’s plan, Republicans oppose it. But since Obamacare is working, they need to have something they can say they’ll replace it with, and they’ve turned to the things that have already failed.
By: Jonathan Chait, Daily Intelligencer, New York Magazine, August 21, 2015
“They Show That They Still Have No Answer”: Scott Walker, Marco Rubio Propose ‘Plans’ To Replace Obamacare
Today, Scott Walker and Marco Rubio have published plans — really, not so much plans as skeletal descriptions of planlike concepts — to replace Obamacare. Their fundamental dilemma is that Obamacare provides a popular benefit to millions of voters. Appealing to the conservative base demands they eliminate the program that provides this benefit. Appealing to the general election requires them to promise something to compensate the victims of repeal. How will they fund that something? This is the basic problem that for decades has prevented Republicans from offering a health-care plan. Rubio and Walker show that they still have no answer.
The usual pattern in politics is for politicians to turn complex problems into simple ones. But covering the uninsured is a simple problem they want to make complex. The main reason people lacked insurance before Obamacare is that they did not have enough money to afford it. Some of those uninsured people had unusually high health costs. Some of them had unusually low incomes. Boiled down, Obamacare transferred resources from people who are rich and healthy to people who are poor and sick, so the poor and sick people can afford insurance.
It cuts funds, but not benefits, from Medicare. And it transfers resources to sick people through regulations. The individual insurance market is reorganized so that insurers can’t deny essential health services or jack up prices to people with preexisting conditions. This means people with expensive medical needs pay less, and people with cheap medical needs have to pay more. Repealing Obamacare means eliminating all these forms of redistribution from the rich and healthy to the poor and sick. And replacing them with … what?
Walker and Rubio are fairly clear about their plans for regulating the insurance market. They want to go back to the pre-Obamacare, deregulated system. They’d eliminate the requirements that insurance plans cover essential benefits, and let them charge higher prices to sicker customers. That’s good for people who have very limited medical needs (as long as they never obtain a serious medical condition, or have a family with somebody with a serious medical condition). It’s bad for people who have, or ever will have, higher medical needs.
Both Walker and Rubio promise to take care of people with preexisting conditions by creating separate “high-risk pools.” That is a special kind of insurance market for people with expensive medical conditions. As you may have guessed, insurance for people with expensive medical needs is, well, expensive. Making that insurance affordable therefore requires lots of subsidies from the government. Where would Walker and Rubio get the money for that? They don’t say.
Both the Rubio and Walker planlike concepts share a basic structure and an extreme lack of detail. Walker’s document is a few pages padded out with ample white space. Rubio’s op-ed, which repeats the talking points of another op-ed from a few months ago, contains even less information. And the lack of detail is not a matter of filling in the fine print. Both Walker and Rubio have signed the Grover Norquist pledge to never raise a single penny of tax revenue ever, under any circumstances.
Both Walker and Rubio propose to cut funding for Medicaid, but this doesn’t create much room to subsidize coverage, since Medicaid is already much cheaper than Medicare or private insurance. Indeed, the main conservative complaint about Medicaid is that it is so cheap that many doctors refuse to see its patients. Republicans are willing to cut Medicaid because they’re generally willing to cut programs that focus on the very poor, but there’s not much blood to be drawn from this stone.
It is tempting to treat the lack of specifics in the Republican health-care plans as a problem of details to be filled in. But it is not a side problem. It is the entire problem. They will not finance real insurance for the people who have gotten it under Obamacare, nor will they face up to the actual costs they’re willing to impose on people. The party is doctrinally opposed to every available method to make insurance available to people who can’t afford it. They have spent six years promising to come up with an alternative plan, and they haven’t done it, because they can’t.
By: Jonathan Chait, Daily Intelligencer, New York Magazine, August 18, 2015
“Obamacare By Any Other Name”: An Unnecessarily Complicated Way To Undo Harm Caused By A Crisis Of Their Own Creation
This is kind of brilliant; it might be the perfect illustration of the state of the modern GOP. The Examiner’s Byron York is reporting that a group of GOP senators is working on a plan to undo the damage that would be done if the Supreme Court rules against the government in King v. Burwell.
For those not familiar with it, the case, which the court will hear next week, turns on the question of whether people who buy health insurance in federal exchanges (in the 34 states that didn’t set up these Obamacare-mandated marketplaces) are eligible for tax subsidies to help pay for health care.
If the court does knock out the subsidies, it could cause havoc in insurance markets – a recent RAND Corporation study estimated that 8 million people could lose their insurance, while the American Academy of Actuaries warned Secretary of Health and Human Services Sylvia Burwell this week that companies could be facing insolvency if the King ruling drives the markets into death spiral territory.
So on the one hand conservatives would come close to achieving their goal of wrecking Obamacare at any cost; on the other hand, they’re starting to realize there would actually be, you know, a cost, both in human and political terms. “We’re worried about ads saying cancer patients are being thrown out of treatment, and Obama will be saying all Congress has to do is fix a typo,” one senior GOP aide told York. (No doubt the actual fact of cancer patients being thrown out of treatment would also be upsetting to this aid.)
So Republicans are looking for a way to restore the government expenditures they have worked so hard to eliminate. Well, not the actual expenditures; a totally different set that would perform the same function but – this is important – would be called something else that didn’t have the word “Obamacare” in it. “GOP lawmakers have decided to keep the money flowing,” York wrote. “Maybe the payments won’t be called subsidies, but they will be subsidies. The essence of Obamacare – government subsidizing the purchase of health insurance premiums – will remain intact.”
Of course, the senior GOP aide’s hypothetical Obama would be correct: All Congress would have to do to fix a harmful King decision would be to pass a law saying that people in the federal exchanges are in fact eligible for the subsidies. But the modern GOP isn’t big on taking the most direct route to the conclusion at which they’ll inevitably arrive. (See, for example, the current ritualistic huffing and puffing from House Republicans – yes, we’ve seen this show before – and various fallback positions en route to the inevitable full, clean funding of the Department of Homeland Security.)
This is the apotheosis of the 21st century GOP Congress: It is seeking an unnecessarily complicated way to undo or prevent harm caused by a crisis of its own creation. This is the fiscal cliff, again; this is the shutdown fight, again; this is the debt ceiling fight(s) all over again.
And it’s also important to keep in mind that this effort to undo the GOP’s avowed goal is angels-on-the-head-of-a-pin stuff. Five years on, the GOP has yet to produce a plan encompassing the latter half of their “repeal-and-replace” mantra; merely ensuring insurance for 8 million people is presumably an easier lift, but no one should hold their breath waiting for a unified Republican plan. This is especially true given that the party’s activist base will label any such effort as an embrace of Obamacare.
Probably nothing will see the light of day. But if the GOP can produce a bill to fix its problem, you can bet that first we’ll repeat the same kabuki where GOP hardliners dream up the demands they’ll make in exchange for ending ongoing harm to the economy. To borrow a maxim from “Battlestar Galactica,” all of this has happened before, and will happen again.
By: Robert Schlesinger, U. S. News and World Report, February 27, 2015