The American people
will be better off! Develop programs that are affordable for those that want a
choice, and give those with pre-existing conditions a separate program. Should
work just fine!
By Michael Tanner NY Post
January 13, 2017 | 8:46pm
Republicans are
wrestling with how to repeal and replace ObamaCare. It turns out that
legislating is much more complex than campaigning. Still, ObamaCare as we know
it is unlikely to be with us much longer.
So what happens
after it’s gone? On Friday, we looked at some of the most likely provisions of
any ObamaCare replacement. They would expand consumer choices, by expanding the
use of health-savings accounts and allowing the purchase of health insurance
across state lines.
Still, there are
some people who would face challenges if the law were repealed. This includes
those with low incomes and those with pre-existing health conditions.
ObamaCare did
expand the number of Americans with health coverage by some 20 million people.
Most of those, however, received coverage not through the program’s subsidies
for private insurance but through the expansion of Medicaid.
There is ample
evidence to suggest that Medicaid provides little if any benefit. One notable
experiment in Oregon found no improvements in health outcomes from Medicaid
enrollment. But regardless, repeal of ObamaCare is unlikely to have any
short-term impact on Medicaid.
The same can’t be
said for those Americans receiving subsidies to purchase insurance through
ObamaCare’s exchanges. Those subsidies will almost certainly be cut back or
eliminated, so some people could end up paying for the full cost of their
premiums.
Of course, that
also means less of a burden for taxpayers overall, since they were picking up
the cost of those subsidies. Besides, even with subsidies, the rising cost of
premiums under ObamaCare was leaving many Americans struggling to afford
insurance.
There will
undoubtedly be winners and losers, but by bringing down the cost of insurance,
the Republican plans will leave most Americans better off.
The question of
pre-existing conditions is a much tougher nut to crack. Pretty much all the
problems with ObamaCare flow from the decision to require insurance to cover
people with pre-existing conditions — that is, people who are already sick —
without charging them more than healthy people.
Because insurers
will lose money on those sick individuals, the cost has to be offset by
enrolling young and healthy individuals, who pay premiums but require few
benefits. Since the young and healthy are reluctant to buy insurance on their
own, ObamaCare included the unpopular individual mandate in order to force them
to do so.
A mandate meant
the government had to define what qualified as insurance, hence the minimum
benefits package and the elimination of low-cost catastrophic policies. People
who liked their policies found out they couldn’t keep their policies. The
dominoes fall.
The number of
truly uninsurable people is actually quite small, and will decline further
under Republican plans to reduce insurance costs and make it easier for people
to keep their coverage if they lose their job.
Still, any
replacement plan will have to include some provision to make sure health
insurance — or at least health care — is available to people whose medical
condition makes them otherwise uninsurable.
Some GOP plans
preserve the pre-existing-conditions requirements as long as a person maintains
continuous coverage, or signs up during a limited open-enrollment period.
But people would
still game the system, jumping to more comprehensive plans or those with the
best specialists after they become sick, knowing that insurers could not refuse
them or increase their premiums. If Republicans simultaneously eliminate the
mandate, this will only accelerate the adverse-selection death spiral already
besetting ObamaCare.
The only workable
answer is to take otherwise uninsurable people out of the traditional insurance
market altogether and subsidize their coverage separately.
This may be done
through the expansion and subsidy of state high-risk pools, much the way states
handle auto insurance for high-risk drivers. Or sick individuals may be taken
out of the insurance system altogether, with their health care paid for through
a reformed Medicaid program.
However these
changes play out, it’s important to realize that no one is going to have their
health insurance suddenly snatched away. Some people may have to get their
health care in different ways, and some, who can afford it, may have to pay
more.
But the
predictions that replacing ObamaCare will mean uninsured Americans dropping
dead in the street are worth little more than fake news.
