GOP’s toxic healthcare choices
President Trump likely surprised many supporters when he told Bill O’Reilly in their Super Bowl interview that formulating a plan to replace the Affordable Care Act was “very complicated” and might not be finalized “until sometime into next year.”
That sounded very different than what he’d said during the campaign, when he insisted he would quickly replace Obamacare with “something terrific.” Instead, Trump and congressional Republicans are discovering why health reform eluded every president until Barack Obama muscled through the ACA. The American medical system is an enormously complex mechanism. Changes in it that benefit one group almost always hurt another. Every cure seems to seed a new disease.
The core problem Republicans face is that their alternatives lower costs for younger and healthier people, many of whom vote Democratic, while raising costs and increasing risk for older and less affluent people with greater health needs, most of whom vote Republican.
That’s partly because the ACA has radically reduced the uninsured rate for the blue-collar whites central to Trump’s electoral coalition, from 20% to 12%. Even more important, the ACA systematically encourages the pooling of risk: The law asks the young and healthy to pay more so that those who are older and sicker can pay less. Under the ACA, young people also pay more now to reduce their own costs when they are older.
Conservatives view such risk sharing — from the mandate on individuals to buy coverage to limits on how much insurers can vary premiums based on age — as forms of government coercion that raise prices. In response, the principal Republican alternatives unravel that risk sharing. Many younger, healthier people might gain in that process. But the big losers would be older, working-age people not yet eligible for Medicare. That age group is predominantly white and now solidly Republican. Whites older than 45 provided most of Trump’s votes; almost three-fifths of House Republicans represent districts where the median age exceeds the national average.
The Republican plans shift costs from young to old first by repealing the ACA’s individual mandate. The mandate, though disliked, underpins the law’s popular requirement that insurers sell coverage to all consumers at comparable prices, regardless of prior health conditions. Without the mandate, people could wait until they are ill to buy coverage, knowing that insurers would have to sell to them. That would produce unsustainable losses for insurers. Only by requiring people to buy insurance when they are healthy can the law guarantee it will be available when they are sick.
To maintain the requirement on insurers to sell, while eliminating the mandate on individuals to buy, the leading GOP plans instead create a “continuous coverage” rule. The rule says insurers must sell, at comparable prices, to anyone who has maintained insurance without a break in coverage, regardless of their health status. The rule is intended to incentivize people to purchase insurance without the mandate’s absolute requirement.
The problem is that the Republican plans eliminate the ACA’s requirement that all insurance policies provide robust minimum benefits like hospitalization and maternity care. Under a continuous-coverage system, that means healthy people could buy inexpensive skeleton plans and only shift to more inclusive coverage when they get sick, knowing insurers must sell it to them. That could cause insurers to stop offering comprehensive plans on the individual market, turning that entire market “bare bones,” in the words of Rand Corp. economist Christine Eibner.
That risk is compounded by another GOP proposal: allowing any insurance policy approved in one state to be sold in every state. The ACA already allows interstate sale when all the affected states agree. But no insurer or state has pursued such cross-border sales, largely because out-ofstate companies can’t compete with local insurers in building an affordable network of doctors and hospitals.
By eliminating minimum benefit requirements, though, the GOP proposals change the equation. The GOP plans would allow an insurer from a lightly regulated state to offer a low-benefit, low-cost plan that peels away younger and healthier consumers in states that require more complete coverage. If only those with greater health needs were left to buy the comprehensive coverage in more regulated states, medical costs would skyrocket — again raising the risk that no insurer would even sell such comprehensive coverage.
Health-savings accounts, another GOP mainstay, would further unravel risk sharing. Those tax-free accounts, which consumers use to pay medical costs directly, appeal most to healthy people with few bills. If healthy people abandoned comprehensive insurance for such accounts, those with greater needs would again face rising costs and diminished availability of adequate coverage. GOP proposals to allow greater age variation in premium rates push in the same direction.
Reflecting the parties’ philosophical divide, the Republican plans prize choice and autonomy while the ACA stresses solidarity. But the practical effect of the GOP alternatives is to advantage the young and healthy over the old and sick. That’s an uncomfortable equation for a Republican Party now reliant on the votes of older whites. In health reform, the toughest challenge for Republicans may be upholding the Hippocratic Oath — first, do no harm — for their own voters.