ACA vs. AHCA: Seek­ing happy mid­dle

Honolulu Star-Advertiser - - INSIGHT - By Robert Graboyes ——— Robert Graboyes is a se­nior re­search fel­low with the Mer­ca­tus Cen­ter at Ge­orge Ma­son Univer­sity.

Win­ston Churchill once sent a dessert back at a restau­rant with the com­plaint, “Take away this pud­ding; it has no theme.” That de­scrip­tion ex­plains Re­pub­li­cans’ tepid sup­port for the Amer­i­can Health Care Act (AHCA) — their ve­hi­cle for “re­peal­ing and re­plac­ing” the Af­ford­able Care Act (ACA, or “Oba­macare”).

What­ever one thinks of the ACA, it had a theme: a golden fu­ture with more peo­ple cov­ered, lower costs, more choices, great web­sites, lower bud­get deficits, and doc­tors and plans you could keep. While most of the prom­ises proved spu­ri­ous, the over­ar­ch­ing goal was in­tu­itive, com­pre­hen­si­ble and ap­peal­ing to a large chunk of the Amer­i­can elec­torate.

In con­trast, the AHCA col­lates dozens of wonky tech­ni­cal adjustments: fed­eral pay­ments to states; el­i­gi­bil­ity re­quire­ments for Med­i­caid; elim­i­na­tion of Dis­pro­por­tion­ate Share Hos­pi­tal cuts; per-capita al­lot­ment for med­i­cal as­sis­tance; re­peal of cost-shar­ing sub­si­dies; pa­tient and state sub­sidy funds; greater age vari­a­tion in in­sur­ance pre­mi­ums; elim­i­na­tion of nu­mer­ous ob­scure taxes; etc.

In 2010, a siz­able per­cent­age of Amer­i­cans could re­cite by heart and un­der­stand the ma­jor prom­ises ACA sup­port­ers were mak­ing. In 2017, try this three-part ex­er­cise: Gather a group of peo­ple more than 50 miles from Wash­ing­ton. Ask them to name and ex­plain five AHCA pro­vi­sions. Lis­ten for the sweet sound of crick­ets. Per­haps some­one will say, with hes­i­ta­tion, “It re­peals and re­places Oba­macare?” But it doesn’t. At best, it slightly bends the ACA to­ward the con­cepts of mar­kets and fed­er­al­ism — al­beit un­con­vinc­ingly. Yes, one pro­posal would let states per­mit in­sur­ers to charge older peo­ple more than five times what younger peo­ple pay for health in­sur­ance; but will states ac­tu­ally do this, thereby butting heads with AARP and older vot­ers?

An­other pos­si­ble pro­vi­sion — “in­vis­i­ble high risk pools” (IHRPs) — would sharply al­ter how we fi­nance health in­sur­ance cov­er­age for peo­ple with ex­pen­sive pre-ex­ist­ing con­di­tions. The ACA sub­stan­tially raises health­ier peo­ple’s pre­mi­ums to pay for sicker peo­ple. IHRPs would al­low health­ier peo­ple to pay lower pre­mi­ums, with tax­pay­ers sub­si­diz­ing pre­mi­ums for sicker peo­ple. Af­ter a half-hour con­ver­sa­tion on the in­tri­ca­cies of IHRPs, an at­ten­tive re­porter re­cently asked me, “If healthy peo­ple pay less in in­sur­ance pre­mi­ums but more in taxes to sub­si­dize sick peo­ple, does that ac­tu­ally make them bet­ter off?” I com­pli­mented his as­tute ques­tion and said the an­swer comes down to “Who knows?” Like the ACA, the AHCA would cre­ate win­ners and losers, with no broad philo­soph­i­cal prin­ci­ples de­ter­min­ing who falls on which side of the line.

The ACA al­lowed its pro­po­nents to claim a great vic­tory, even if the re­sult was an in­co­her­ent dog’s lunch of a law. Per­haps, like the ACA, the AHCA’s great­est virtue lies not in pol­icy but in pol­i­tics — in this case, the abil­ity to claim a par­tial ACA re­peal.

If the AHCA al­lows Re­pub­li­cans to claim “we re­pealed and re­placed Oba­macare” while Democrats can con­tinue to claim “Oba­macare is here to stay,” then per­haps this will ease the long­stand­ing par­ti­san blood feud and al­low a greater fo­cus on im­por­tant points of health care pol­icy that both sides have largely ig­nored. Those ig­nored points in­clude Medi­care’s Soviet-style price con­trols, which dis­tort the pro­vi­sion of care through­out the econ­omy and pose a mor­tal risk to the fed­eral gov­ern­ment’s sol­vency. Or the Food and Drug Ad­min­is­tra­tion’s cum­ber­some, an­ti­quated struc­ture that slows the de­vel­op­ment of new drugs and de­vices and makes ex­ist­ing ones more ex­pen­sive. Or fed­eral and state laws and reg­u­la­tions that sti­fle com­pe­ti­tion among hos­pi­tals. Or that states sub­ject care to a bog of anti-com­pet­i­tive reg­u­la­tions con­cern­ing pro­fes­sional li­cen­sure, cer­tifi­cate of need, scope of prac­tice, cor­po­rate prac­tice of medicine, telemedicine, di­rect pri­mary care, and more.

If the in­ter­twined ACA and AHCA make it pos­si­ble to move ahead and fo­cus on these prob­lems, then hur­rah for that.

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