New health care bill worth a look

The Signal - - OPINION - Phil KERPEN

The in­tro­duc­tion of the new Se­nate health care bill – au­thored by se­na­tors Bill Cas­sidy of Louisiana, Lind­sey Gra­ham of South Carolina, Dean Heller of Ne­vada, and Ron John­son of Wis­con­sin with an as­sist from for­mer se­na­tor and pres­i­den­tial can­di­date Rick San­to­rum – comes af­ter so many failed Oba­macare re­peal ef­forts that you can forgive the pub­lic for greet­ing it with cau­tion.

But the cur­rent law is a dis­as­ter – pre­mi­ums and de­ductibles are spi­ral­ing up­ward while the lat­est of­fi­cial es­ti­mates show 1,478 coun­ties – over 45 per­cent of the coun­ties in Amer­ica – will have just one in­surance com­pany in 2018.

The 2017 rec­on­cil­i­a­tion process pro­tect­ing a Repub­li­can health care bill from fil­i­buster ex­pires on Sept. 30. Gra­ham-Cas­sidy-Heller-John­son (GCHJ) is the last train leav­ing the sta­tion. All aboard.

GCHJ is a sim­pler bill than Repub­li­cans have pre­vi­ously of­fered. It re­peals the in­di­vid­ual man­date, which is im­pos­ing harsh tax penal­ties on peo­ple who can’t af­ford Oba­macare’s sky-high pre­mi­ums. Ac­cord­ing to the IRS, 83.7 per­cent of the nearly eight mil­lion in­di­vid­ual man­date penalty pay­ers made less than $50,000 in the most re­cent year for which data are avail­able, and 46.1 per­cent make less than $25,000.

While the Con­gres­sional Bud­get Of­fice still likes to pre­tend the man­date works, re­al­ity shows it leaves many Amer­i­cans of lim­ited means not just unin­sured, but poorer than they were be­fore.

GCHJ also re­peals the em­ployer man­date, which is hold­ing back small busi­nesses un­der 50 em­ploy­ees. Ac­cord­ing to Univer­sity of Chicago econ­o­mist Casey Mul­li­gan, the man­date has de­stroyed 250,000 jobs.

The em­ployer man­date also has in­duced many em­ploy­ers to slash hours to keep work­ers un­der Oba­macare’s 30-hour-per­week thresh­old. Many of those af­fected are ad­junct pro­fes­sors at lo­cal col­leges and other em­ploy­ees of cash-strapped lo­cal govern­ments, school dis­tricts and li­brary dis­tricts.

GCHJ re­peals Oba­macare’s lim­i­ta­tions on Health Sav­ings Ac­counts, ex­pands con­tri­bu­tion lim­its, and al­lows pre­mi­ums to be paid from them – a crit­i­cal re­form that would give em­ploy­ers the op­tion of mak­ing pre-tax HSA con­tri­bu­tions that em­ploy­ees could use to­ward pur­chas­ing plans in the in­di­vid­u­als mar­ket.

GCHJ re­peals the Oba­macare tax on med­i­cal de­vices, a ter­ri­ble tax that un­der­mines the med­i­cal in­no­va­tion we all de­pend on for longer, health­ier lives, as well as pun­ish­ing in­no­va­tive, early-stage com­pa­nies with a tax on gross rev­enues even if they are not prof­itable.

Un­like pre­vi­ous Repub­li­can bills, GCHJ re­tains the rest of the Oba­macare taxes and uses them start­ing in 2020 to fund a for­mula-based block grant to the states that re­places both Oba­macare’s ex­pan­sion of Med­i­caid to able-bod­ied work­ing-age adults and the vast sub­si­dies that flow through Oba­macare’s ex­changes.

That means a cut in fed­eral fund­ing for Mas­sachusetts, which re­ceives a vastly dis­pro­por­tion­ate share of all Oba­macare spend­ing, and to a lesser ex­tent Cal­i­for­nia and New York. (Those three states cur­rently re­ceive an eye-pop­ping 37 per­cent of all Oba­macare spend­ing.) It means in­creased fund­ing for most other states.

For all states it means real con­trol of health dol­lars and health pol­icy with­out mi­cro­man­age­ment by a vast fed­eral bu­reau­cracy. Lib­eral states could choose to main­tain Oba­macare’s ex­changes and sub­sidy struc­ture, while con­ser­va­tive states move in very dif­fer­ent di­rec­tions that em­pha­size in­di­vid­ual choice and com­pe­ti­tion.

Not every state would suc­ceed – but few could do worse than the acute cri­sis the coun­try now faces as Oba­macare crum­bles, and the most suc­cess­ful states would serve as mod­els for oth­ers whose own ini­tial ap­proaches don’t fare as well.

Un­like pre­vi­ous health care bills that sought to re­place a failed Demo­cratic one­size-fits-all na­tional vi­sion of health care with a sin­gle Repub­li­can vi­sion, GCHJ takes a more mod­est ap­proach that re­peals Oba­macare’s most griev­ous in­juries to con­sti­tu­tional free­dom and then uses a block grant to al­low the states to sort out the specifics for them­selves.

Pres­i­dent Trump wel­comed the bill’s in­tro­duc­tion, say­ing: “in­ac­tion is not an op­tion, and I sin­cerely hope that Se­na­tors Gra­ham and Cas­sidy have found a way to ad­dress the Oba­macare cri­sis.”

The pres­i­dent is right and Congress should get GCHJ to his sign­ing desk as soon as pos­si­ble.

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