The com­ing sin­gle-payer health care sys­tem

The Washington Times Weekly - - Commentary - By Peter Morici

Pres­i­dent Trump’s threat to with­hold sub­si­dies from in­sur­ance com­pa­nies and con­gres­sional staff to pur­chase in­sur­ance will not likely re­sult in Repub­li­cans agree­ing on a plan to re­place Oba­macare. That sets the ta­ble for Democrats to fur­ther so­cial­ize Amer­i­can medicine.

By re­quir­ing most Amer­i­cans to ob­tain health in­sur­ance — ei­ther through em­ploy­ers or on govern­ment-run ex­changes — the Af­ford­able Care Act (ACA) promised to bring more healthy peo­ple into in­sur­ers’ risk pools and sub­stan­tially lower pre­mi­ums.

By ex­pand­ing Med­i­caid, the ACA sought to en­sure ac­cess for low-in­come and un­em­ployed in­di­vid­u­als — in­clud­ing those who refuse to look for work.

Ac­cord­ing to the Kaiser Fam­ily Foun­da­tion, only 13 mil­lion ad­di­tional in­di­vid­u­als ob­tained cov­er­age, while 28.5 mil­lion re­mained with­out in­sur­ance. Even with gen­er­ous sub­si­dies, 57 per­cent said in­sur­ance cost too much or could not ob­tain cov­er­age.

Many healthy young peo­ple chose to pay fines rather than hefty pre­mi­ums on poli­cies im­pos­ing high de­ductibles, and many added to the in­sur­ance rolls were sicker and needed more care than an­tic­i­pated.

In­sur­ance com­pa­nies lost con­sid­er­able sums, raised pre­mi­ums by an av­er­age of 25 per­cent for 2017 and sim­i­lar in­creases are an­tic­i­pated for next year. Many with­drew from the pro­gram, leav­ing one-third of all coun­ties with only one car­rier in 2017, and at least some coun­ties in sev­eral states will have no com­pany of­fer­ing in­sur­ance in 2018.

Had Hil­lary Clin­ton been elected, the ACA still would have faced for­mi­da­ble chal­lenges. More young peo­ple would have opted to pay a fine rather than bear an­nual dou­ble-digit rate in­creases.

Pres­i­dent Trump has is­sued an ex­ec­u­tive or­der in­struct­ing fed­eral agen­cies to “waive, de­fer, grant ex­emp­tions from or delay im­ple­men­ta­tion of any pro­vi­sion or re­quire­ment” of the ACA that im­poses a bur­den “to the max­i­mum ex­tent per­mit­ted by law.” If faith­fully im­ple­mented, this would en­cour­age more em­ploy­ers to quit of­fer­ing cov­er­age, more in­di­vid­u­als to drop out of the sys­tem and send the govern­ment-run ex­changes into a death spi­ral.

The House bill and var­i­ous Se­nate pro­pos­als failed to muster enough pub­lic sup­port to com­pel con­gres­sional pas­sage be­cause, like the ACA, those failed to ad­dress the core is­sue. Amer­i­cans pay too much for health care — ev­ery­thing from drugs to our ter­ri­bly ex­pen­sive tort sys­tem.

Lack­ing gen­uine cost con­trols and tort re­form, no Repub­li­can plan could of­fer to sub­stan­tially lower pre­mi­ums.

Ger­many has a pri­vate in­sur­ance sys­tem but spends about 11 per­cent of gross do­mes­tic prod­uct on health care whereas the United States spends 17 per­cent. The dif­fer­ence is not qual­ity or ac­cess to care but price con­trols — for ex­am­ple, new drugs are priced ac­cord­ing to how much they im­prove treat­ment.

Repub­li­cans in Congress are ide­o­log­i­cally op­posed to reg­u­lat­ing prices, and led by Se­nate Ma­jor­ity Leader Mitch McCon­nell and House Speaker Paul Ryan, they failed to prop­erly frame the Med­i­caid re­form is­sue.

No con­ser­va­tive was talk­ing about push­ing the dis­abled, moth­ers and poor chil­dren off Med­i­caid, as Se­nate Mi­nor­ity Leader Charles Schumer im­plied. In­stead, by im­pos­ing work requirements for the able-bod­ied, they would force off the rolls those who refuse to help pull the wagon like the rest of us.

The Democrats were able to play on the fears that Repub­li­cans were bent on vic­tim­iz­ing help­less cit­i­zens. Sens. Shelley Moore Capito, Lisa Murkowski and Su­san Collins of wel­fare-de­pen­dent states West Vir­ginia, Alaska and Maine led the charge to pro­tect the rights of the in­do­lent to mooch off the rest of us.

Democrats are now of­fer­ing to work on a bi­par­ti­san fix for Oba­macare, but an ef­fec­tive so­lu­tion would re­quire dra­mat­i­cally in­creased sub­si­dies for in­sur­ance sold on govern­ment-run ex­changes, and in­creased fed­eral out­lays for Med­i­caid as many of the 19 states yet to opt into Med­i­caid ex­pan­sion do so.

En­ti­tle­ments al­ready ac­count for 60 per­cent of the fed­eral bud­get, and Repub­li­cans are likely to balk at the fund­ing nec­es­sary to make the ACA palat­able to most Amer­i­cans for the long term.

When the sys­tem ul­ti­mately collapses, the Repub­li­cans, hold­ing con­trol of the White House and Congress, will take the blame.

Look for the Democrats to take con­trol of the govern­ment by 2020 and im­pose price con­trols through a Bri­tish-style sin­gle-payer sys­tem.

Es­sen­tially, they will im­pose Med­i­caid for all. Doc­tors, hos­pi­tals, and drug and health in­sur­ance com­pa­nies will take a hair cut. Amer­i­cans will get their health care with the same speed and re­li­a­bil­ity of the Post Of­fice.

Most of us will long for the good old days be­fore Oba­macare. Peter Morici is an econ­o­mist and busi­ness pro­fes­sor at the Uni­ver­sity of Mary­land, and a na­tional colum­nist.

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