Replacement
Republican congressional leaders should pull the plug on passing a comprehensive replacement for Obamacare. Instead, they should bring to the floor three far more limited measures, but ones that would clarify the status quo and open the door to potentially better alternatives.
There clearly isn’t a consensus among GOP lawmakers about an Obamacare replacement. More importantly, there isn’t even a majority among GOP lawmakers for an alternative that would offer better products and more stability in the individual health insurance market.
For the individual market to work, insurers have to be free to offer products tailored to customer preferences. And pricing has to be based in substantial part on relative risk, as is the case in all other lines of insurance.
Obamacare violates both of these prerequisites. It mandates what all insurance policies must cover. And it requires insurance companies to accept all applicants and charge them the same, with limited variability based on age. The results are what we see, insurance that’s a bad deal for anyone who’s not heavily subsidized or seriously or chronically sick.
There need to be subsidies for the poor and the seriously or chronically sick. But providing those subsidies through the premium mechanism results in a dysfunctional and imploding market.
Only a minority of Republicans are prepared politically to vote to repeal Obamacare’s mandated benefits, or its guaranteed issue and community rating provisions. Consequently, the individual market structure in both the House and Senate bills replicates the fatal flaws in Obamacare.
There’s no point in substituting a dysfunctional and imploding Republican individual market for a dysfunctional and imploding Democratic one. And politically, it would be stupid. So, pull the plug.
Instead, Republican congressional leaders should bring to the floor, separately and individually, these three measures.
There are two categories of Obamacare subsidies. Premium subsidies reduce the cost of insurance and are available up to 400 percent of the federal poverty level, or nearly $100,000 a year for a family of four. Cost-sharing subsidies offset copays and deduct- See ROBB, Page 7E