10 Mar The House GOP’s American Health Care Act (AHCA) From 30,000 feet to Ground Zero The WRONG Direction for America
Claiming that the GOP has repealed Obamacare by proposing the AHCA is like claiming that government had repealed slavery by proposing indentured servitude.
America survived from 1776 to 2010 without government-controlled healthcare, and our experience under the ACA proves we were better off without it.
Discussing what is wrong with the House GOP’s American Health Care Act (AHCA) requires for starters the big picture analysis (30,000 foot) of the ACA. After that I have summarized some of the most onerous provisions of the AHCA; what conservatives should demand; and laid out the simple truth that we CAN fix this.
The 30,000-foot level Analysis
Obamacare, the 2010 Affordable Care Act (ACA) was:
- Based on fraud, on a big fat lie. There was no health care or health insurance crisis requiring the federal government takeover of the entire healthcare system. A full 85% of Americans were content with their healthcare and health insurance before ACA was passed. Needed tweaks to the system for lower income Americans and the chronically uninsurable did not necessitate the takeover of the entire system.
- Sold with lies. “If you like your insurance … If you like your doctor…”
- Deliberately designed to fail, with the goal of moving to the ultimate leftist dream of single payer, pure socialized medicine. And the ACA is failing.
- A direct stab to the jugular of the free market system that up until that point had made our healthcare system the best on earth. Democrats passed it despite polls telling them America did not want it.
- Written, and expanded via regulation, to squeeze, strangle, monitor and control every single American’s health insurance policy, and nearly every aspect of health insurance and healthcare in America.
- Designed to plant the seeds of dependency in every citizen’s heart, to argue that we all have a “right” to healthcare guaranteed by the government. It was designed to dis-incentivize Americans from thinking that they have primary responsibility for their health and health care. Another leftist goal.
- A power grab. Democrats boldly grabbed as much government control of the healthcare system as they could. The GOP needs to be equally bold in grabbing back as much freedom and free market control of the system as they can.
This is the big picture story of WHY the GOP must repeal the ACA in its entirety as a stand-alone bill. To take the unequivocal stand that America rejects government-controlled healthcare. Repeal the idea that the federal government runs healthcare.
I am the first to acknowledge that some conservative demands are unrealistic, and that messaging about healthcare is tricky and important. But we can handle this.
What a recommitment to free markets means for healthcare policy:
Beyond full repeal, any GOP healthcare legislation at the federal level should be targeted on:
- Freeing up insurance companies to develop more policy choices based on market based considerations and actuarial formulas that take into account the health condition of the insured
- Removal of all but the poor, children, and the disabled, from Medicaid-provided insurance, and transitioning them to traditional insurance
- Re-engaging Americans with a renewed sense of personal responsibility so they shop for insurance policies like they shop for homeowners’ or other forms of insurance, by comparing policies, coverage details and prices
- Re-introducing the idea that health care is a necessity and a responsibility, not a right. Individual responsibility MUST be the operating assumption
- Leaving the private insurance market and the 85%+ percent Americans who can buy insurance on their own (or get it via employment), alone
- Permitting more freedom to insurers including increasing competition by allowing selling insurance across state lines. Making selling across state lines a meaningful alternative may require a change in the network-negotiated pricing model used by insurers, but, so what? Why agree that insurers must limit their pricing options to past models?
- Caring with the chronically uninsurable and those unable to pay for healthcare or health insurance using methods that do not interfere with the free market based insurance that should be available for everyone else.
Some of the problems with the AHCA
- The overarching objection to the AHCA is that it blocks free market principles from operating. It keeps too much of the federal government’s nose in the tent of our healthcare and health insurance system.
- The AHCA retains federal government interference in pricing of healthcare insurance policies, so market-based factors, the reality of the actual costs of the policy, are ignored.
o In a free market, insurance policies are priced based on combining risks, and accurately assessing the risk an insurer is taking with potential policyholders. Insuring a 60 year-old obese diabetic smoker is a bigger risk than insuring a perfectly healthy 25 year-old.
o Obamacare limited the permissible range of policy prices to a 3 to 1 ratio. The GOP “repeal” changes that ratio to 5 to 1, based on age only. But the 60 year-old may be more than 5 times the risk than the 25 year-old. So the insurer sells the policy for less than its actual cost, or charges the 25 year-old more than is fair.
o Forcing an insurer to sell a policy for less than the cost it will incur, is like forcing a baker to sell a loaf of bread that cost him $1 to bake, for 10 cents. Eventually the baker will be out of business, or he will look for ways to make a cheaper, lousier loaf.
o No matter the precise ratio, this is the federal government imposing price controls, and price controls never bring about the efficiency that free markets do. Let insurers price their policies based on actuarial risk—and competition.
- The AHCA gets rid of the Obamacare individual and employer mandates, which is good, but substitutes a different penalty by requiring insurers to charge a 30% higher premium to a policy applicant who has had a significant period of non-coverage over the previous 12 months. So no mandate, but a penalty, AND a further interference in policy pricing. More meddling.
- The House GOP’s AHCA introduces tax credits, which will accelerate the ‘thought-move’ toward healthcare as an entitlement. Tax credits are a vehicle some economists support to level the playing field between Americans who get their insurance through their employer (so paying premiums is not an out-of-pocket expense to the individual), and those who pay for it themselves. Those who pay for it themselves are newly incentivized or rewarded for buying insurance—which in theory will have the effect of expanding the base of covered Americans. But regardless of whether the theory works in practice, this is Washington, D.C. political engineering using the tax code—only it’s supposed to be better when the GOP does it instead of the Democrats. Conservatives ought to be on the side of free market dynamism, not political engineering. Conservatives should push for policies that keep prices down by fostering competition, not ones that accelerate momentum toward making healthcare into a new and expensive entitlement. If the AHCA went much farther than it does toward fostering competition, the tax credit concept might be palatable, but it doesn’t, and so it isn’t.
- The AHCA allows the further expansive explosion of Medicaid coverage, with a phase out starting in 3 years.
o Currently about 40% of Americans have a government health insurance plan, either Medicare, Medicaid or veterans’ programs.
o Since Obamacare passed, 11.7 million Americans have enrolled in Medicaid, and about half of them were previously insured in a private health plan.
o So Obamacare transferred private health insurance holders, to government-funded healthcare. Bad trend. Expanding Medicaid to cover those who are not poor or disabled increases government dependency, the opposite of the goal conservatives should have.
o In fact, the entire decline in the number of uninsured under Obamacare is due to people going on Medicaid or some other government-funded healthcare. (Now do you see the Obamacare-designed-to-fail-in-order-to-move-to-single-payer theme?)
We can and will care for the needy
- No one is advocating or will tolerate ignoring the needs of the poor, or the chronically uninsurable.
- There is no need to leave any Americans in the lurch as we make our way back to freedom. Obamacare can be repealed in its entirety while still protecting individuals and families currently insured under the Obamacare exchanges. The Obamacare exchange policies are already funded through mid-year, and can be funded for longer than that if needed, as we move toward having new choices in place.
- Americans will find a way to help those truly unable to pay for needed healthcare, which could include Medicaid reforms. But that commitment does not need to involve forcing private insurers or policyholders to embrace government orchestrated and priced policies.
- The fact that Americans with pre-existing conditions have found getting insurance difficult, is the radical Left’s linchpin for demanding that insurers cover them under policies subsidized by government mandates, which are a form of socialism and of price controls, both bad ideas. There are numerous better and more conservative solutions for helping our fellow Americans who are chronically uninsurable, that leave the insurance industry robust and competitive. State-based risk pools are one solution.
Lobbyists and $$
GOP House Speaker Paul Ryan is consistently the recipient of very large campaign donations from the big insurance and pharmaceutical industries, both of which prefer the freedom from competition that government controls and meddling tend to perpetuate. Over his career in Congress, insurance has been the top industry donor to Ryan just after retired people.
Keep in mind that Speaker Ryan and others in Congress are grateful for and motivated by the donors that keep their campaigns and political careers alive.
We Can Win this Fight
The numbers and the process
Supporters of the AHCA are trying to frighten conservatives into thinking the AHCA bill is the only possible solution to repeal and replace Obamacare. This is false.
First, the numbers. The GOP has 237 House seats and cannot lose more than 19 votes to get ACHA passed. In the Senate, the GOP has 52 Senate seats and cannot lose more than 2 votes.
As of this writing, the GOP does not have the votes for AHCA to pass in the Senate for sure, and they are wobbly at best in the House. Time to lobby your Senators and Members of Congress.
Second, the process. Contrary to what some GOP elected officials who are afraid to go for the robust full repeal and replace later plan are saying, 51 Senators can fully repeal Obamacare via reconciliation, without fear of filibuster by the Democrats. The Democrats cannot stop repeal, if the GOP is willing to fight.
Third, once the ACA is repealed, the GOP can pass healthcare related legislation, or a replacement if that is their preference, in the House by majority vote, and in the Senate using other Senate rules including the two-speech rule.
We need to assume the Democrats will not cooperate at all in the repeal and in future legislation. That is just fine. Remember that we have acquired control of the House, the Senate and the White House in very large part because of the Democrat Party’s imposition of government run healthcare.
GOP, take a page out of the Democrat playbook. Play hardball. Do the right thing and repeal, and only replace piecemeal with actually needed fixes that honor freedom and free markets.
In closing … real life
A dear friend told me that her sister has numerous health problems and is chronically uninsurable, and has insurance under an Obamacare exchange policy. Her message to me was “the GOP should not repeal Obamacare without making very clear to my sister and others in her position what will happen to them.” I agree.
A hairdresser friend of mine told me that she could afford to buy her own health insurance policy until Obamacare (the ACA) became law. After the ACA, she pays higher premiums, a big deductible, finds fewer of her needs are covered, and can barely afford to keep her coverage. She’s a Democrat but wants the GOP to repeal Obamacare.
The ACA cost caused countless Americans to lose their fulltime jobs, and to lose the doctors and the insurance policies they wanted to keep.
Stories like these are more persuasive policy arguments than all of the bullet-pointed data above.
GOP voters swarmed to the polls in 2016 based on promises of full ACA repeal, and an end to government meddling and overreach in healthcare. The AHCA does not come close to that promise.
Promises of future further fixes coming may be genuine but the reality is unlikely. With trade deals, the border wall, the refugee situation, tax reform and dozens of other YUGE issues coming down the pike, revisiting the politically volatile healthcare debate is very unlikely.
Getting this first repeal bill done right is of utmost importance.
Time to speak up, and get our healthcare system back on free market rails.