Whenever Republicans and Democrats clash on health care, Republicans are almost always on the defensive and they almost always lose the debate.
But first, their track record. Republicans have done three things that help liberate people from the burdens of Obamacare. They have (1) effectively eliminated the individual mandate, (2) allowed the purchase of short-term insurance, which is not subject to Obamacare’s regulations, and (3) allowed association health plans, which are also less rigorously regulated than Obamacare individual market plans.
In support of these changes, a recent report by the Council of Economic Advisers (CEA), Deregulating Health Insurance Markets, finds that the people who benefit from these changes will experience a gain worth $45 billion a year. The CEA concedes that as healthier people exit the (Obamacare) exchanges for less expensive alternatives, premiums will rise for middle-income enrollees with health care problems. But it concludes that the benefits to those who gain far outweigh the costs to those who lose.
For economists, that might settle the issue. But Democrats believe they recaptured the House of Representatives because of health care. In a recent congressional hearing, they argued that Republican reforms weaken the protections of Obamacare. Although only about 5% of people with private insurance are buying individual plans, just about everyone with employer-provided insurance views the individual market as the market of last resort. It’s where they would turn, should they become too sick to continue working.
Democratic scare tactics will continue to work with voters unless Republicans can come up with better answers.
Here are four Republican mistakes.
- Republicans are usually unable to explain why young, healthy families choose “skimpy” plans (short-term insurance) over “comprehensive” plans (Obamacare) and why that is the right choice, even when the out-of-pocket premium is the same.
Suppose you have a choice between a plan with a $10,000 deductible and $1 million of coverage and a plan with no deductible but only $25,000 of coverage. Suppose the premium for the two plans is the same. Which would you prefer?
For people with high incomes and high net worth, this is a no brainer. They would choose the former option in a heartbeat. (By the way, these are the types of people who designed Obamacare.)
But young, healthy, low-income families living paycheck-to-paycheck invariably prefer the latter option. How do we know that? Because that’s the kind of insurance they and their employers chose to buy before there was Obamacare.
Unlike Obamacare, with outrageously high deductibles, this kind of insurance makes it easy for the family to get into the health care system. But it may require reliance on a social safety net for really expensive treatments.
- Republicans do not seem to understand that public insurance and private insurance must complement each other, and they are unable to explain how the complementarity is going to work when they advocate limited benefit insurance.
The Democratic (Obamacare) approach to health insurance reform was to force private insurance to pay for almost everything. That’s strange, when you remember that Democrats tend to think public insurance is better anyway.
Democrats are partly right. Sometimes public is better than private. Before there was Obamacare, the CHIP program paid for the continuing care of birth defects like Jimmy Kimmel’s son, in many states regardless of income. Moreover, some birth defects are related to pre-natal care and that is sometimes related to social problems that private insurers aren’t good at dealing with anyway.
Parkland Memorial Hospital in Dallas has one of the best programs in the county for administering prenatal care to low-income, often-undocumented mothers. Private insurance isn’t likely to top that.
Substance abuse is another area I would relegate to the public sector. Some programs, (like Alcoholics Anonymous and Al Anon) are free. For opioid abuse, the best treatments are highly specialized and outside the expertise of most private insurers.
Let coverage for substance abuse, birth defects, and perhaps other conditions be a private insurance option. But don’t require it. Provide public sector funding instead.
- Republicans have never been able to explain convincingly how care for people with pre-existing conditions will be just as good or better under any proposal they have ever favored.
Pete Sessions, Mark Meadows and other House Republicans had the right idea. They proposed a House resolution on pre-existing conditions last year. It said that in any reform of Obamacare, states must:
- Guarantee that people with health problems will get better health insurance.
- Set as an attainable goal: People who migrate from the group market to the individual market should be able to find similar insurance in terms of price, quality and access to care.
- Allow health plans to specialize and offer better care for such conditions as cancer, heart disease and diabetes.
In a previous post, I explained how those goals can be achieved.
- While everyone agrees that the healthy subsidize the sick under Obamacare, Republicans have never explained the alternative. Who should subsidize the sick and how should that subsidy work?
Federal tax policy for many decades has encouraged people to obtain non-portable insurance from their employers. Yet, when they become too sick to work, they must buy in the individual market.
Obamacare’s solution is to let the group insurer collect premiums for an entire work life but force an individual insurer to pay all the costs once illness has struck. That doesn’t make sense.
A better solution is to allow the states to impose a small premium tax on all group insurance for the express purpose of paying for above-average-cost patients who migrate from the group to the individual market. Employers could avoid the tax by helping their employees buy individually owned insurance – which travels with the employees from job to job and in and out of the labor market.
Until Republicans better understand these issues and improve their arguments, health care debates will not go well for them.