A repair for health care
Untangle the mess of Obamacare
WHAT A tangled web. Now it’s all in everybody’s hair. Obamacare—or the attempts to get out of it—reminds us of the Devil’s Snare in Harry Potter books. The more you struggle with it, the more entangled you get.
Now the leadership in the U.S. Senate is talking about a straight repeal of Obamacare, but not for another two years! This keeps getting worse! If they don’t repeal this thing for another 24 months, it means we have 24 more months of Obamacare, and who knows what will happen after the next congressional elections? (If Democrats gain seats, as expected, everything is off.)
How about an alternative approach?
The country—taxpayers, politicians, We the People— should remember that the Affordable Care Act is really two different programs tied into one package. One program provides free medical care for the poor and those making up to 138 percent of the poverty line. (Where they came up with that number is anybody’s guess.) As we know, only about half of the states opted to participate in expanding Medicaid for this purpose.
In this half of the equation, many senators (and certain governors back home) are reluctant to vote to repeal this expansion because there are so many people on expanded Medicaid back in their states. Like the one you’re in now, Mr. and Mrs. Arkansawyer. History shows it is extremely difficult to take away an entitlement once it’s given. In fact, when was the last time that happened?
The second part of Obamacare is not free medical care, but rather subsidized medical care. That’s where there are a lot of problems. This is where we read of insurance companies pulling out of states, not requiring people to sign up for insurance until after they get sick, and forcing everyone into one-size-fitsall insurance with 10 essential services, ballooning the cost of health-care premiums.
A big step on fixing Obamacare would be to split the two parts and only deal with the second part to be repealed and replaced. Leave the Medicaid expansion alone. This should eliminate the resistance of senators who oppose reducing the number of those covered by free health insurance in their states. It would also eliminate the problems of the Congressional Budget Office continually saying how many millions of people will no longer have insurance.
Of course, this is not a perfect solution, with some states like Arkansas and Kentucky having expanded Medicaid, and other states like Texas not so much. But the states that did expand it will have to live with it.
There is no doubt there is going to be a day of reckoning when the federal government has to start reforming its entitlement programs, and Medicaid will be one that it has to address. Could Medicaid lower its starting point and cover people not living above the poverty line?
Arkansas’ costs from its Medicaid expansion will probably increase from around $100 million a year to about $200 million as the federal government pays less, reducing the percentage it pays from 95 percent at the beginning of Obamacare to 90 percent over the next few years. (That was written into the law.) Arkansas will just have to deal with that fiscal problem, since it is a fiscal problem our state legislators created by agreeing to the expansion in the first place. The states that did not expand Medicaid would have a lighter load, and any future expansion of Medicaid in those states can be handled by future legislation in their capitals.
Congress can take other, smaller steps now on the subsidized insurance that would help clean up this mess. First, it should address the problem of people not having to buy insurance until they get sick. This will always result in higher premiums for everyone. Imagine if you could buy homeowners’ insurance after your home caught fire. Everyone’s insurance would cost more in that case. Just as health insurance does now under Obamacare.
The House bill addresses this problem by requiring much larger premiums for people who do not buy insurance until after they get sick. Congress might even consider retaining the penalty for people who don’t buy insurance, since it is fairly nominal anyway, and that would please the Democrats. Or have different deductibles, with lower deductibles for those who buy insurance before they get sick, and much higher deductibles for those who wait till they are sick.
IF THE Congress would divide Obamacare into two distinct sections, and address one of them now, it could probably get legislation passed and reduce insurance premiums, which would encourage more people to sign up. Congress could address Medicaid and other matters when it eventually takes up entitlement reform.
Another step would be to eliminate the “one size fits all” requirement for Obamacare insurance. It goes by another more euphemistic name, the Ten Essential Services. But why not require insurance companies to offer these 10 in some packages, but also let them offer six, or eight, or 18 services in others? That would allow consumers to choose which insurance plan they want. And no doubt it would let consumers get the type of insurance they want, and many would pay lower premiums. Another word for this approach is “freedom.”
Let’s take Obamacare apart and start changing the parts that can be improved now.