A GOP cure for Obamacare
Achance encounter with former Lt. Gov. Betsy McCaughey has convinced me that the promised repeal-and-replacement of Obamacare by national Republicans is probably going to look more like rebrandand-reduce.
McCaughey is a longtime health care advocate and early critic of Obamacare. A staunch Trump supporter, she has been urging Republican members of Congress to settle on a plan to reorganize — not eliminate — federal support for uninsured Americans.
Her nuanced opposition often gets lost in the gale of political rhetoric blowing from the nation’s capital. To hear Democrats talk about it, Republicans are hellbent on simply repealing the Affordable Care Act with no earthly idea of how to reestablish coverage for the millions of people now covered thanks to Obamacare.
That is an exaggeration. Several GOP alternatives to Obamacare are floating around, although Republicans have yet to assemble a package that will be palatable to the insurance industry and politically defensible against the the apocalyptic rhetoric coming from Democrats.
At the heart of the problem, says McCaughey, is Obamacare’s requirement that insurers accept customers who are already sick — a necessity in a country where 5% of the population accounts for 50% of medical spending. Americans with pre-existing conditions who got coverage for the first time under Obamacare represent a huge financial burden for healthier families, who are increasingly unwilling to pay higher premiums and deductibles.
“There’s a lot of hyperbole about pre-existing medical conditions. It’s got a lot of emotional appeal,” says McCaughey. “Preexisting conditions was the thing the Democrats sold the hardest. But when you look at the math, it just doesn’t work. It isn’t fair to the average Joe.”
McCaughey’s favored solution is to have states re-establish so-called high-risk insurance pools, where seriously ill people can buy high-priced health insurance. She estimates that having the federal government subsidize the pools to keep premium prices down would cost about $32,000 per patient, or $16 billion a year — a lot of money, but far less than the $43 billion paid out in annual subsidies under Obamacare.
If McCaughey’s numbers are correct, a Republican replacement could potentially save a lot of federal money and allow insurers to lower premiums for everyone else.
The problem is that Washington runs on politics, not math.
The same Republicans who have badmouthed Obamacare for nearly a decade are also staunchly anti-tax, making it hard to imagine which GOP congressional leader will publicly call for the taxes needed to hand a $16-billion-a-year subsidy to insurance companies. That could make them vulnerable to a challenge from conservative anti-tax challengers in the 2018 elections.
It would also leave them open to challenges from Democrats unlikely to give up what has worked well for years — accusing Republicans of callous indifference to the plight of uninsured Americans. It’s important to remember that Obamacare has driven the percentage of uninsured Americans to an all-time low and created a lot of grateful and happy customers for insurance companies along the way.
With partisanship at a fever pitch these days, it’s naive to think that Democratic and Republican politicians will rationally split their differences and calmly reorganize (and perhaps rename) Obamacare.
Enter Donald Trump, who has vowed to repeal and replace, but has cautioned members of Congress against getting blamed for the inevitable disruptions in the system a new plan will cause.
“I really don’t think the President-elect is going to let them dither,” says McCaughey, who is pushing for an early vote on her high-risk-pool plan.
Once Republicans agree on a proposal, the experts can figure out whether it works — not just the health economists, but the real experts: people like a self-employed Daily News reader and Obamacare supporter who contacted me recently.
“A real world example for the clueless pundits out there,” Ellen wrote. “When I moved to part-time employment in 2007, I lost employer-funded health care. My premium for an individual plan was $420 a month which I couldn’t afford — so I went without health insurance for six years.”
“With Obamacare, I got a Silver plan for $113 a month. That increased in 2014 by 7.5% to $123 a month. A 25% increase now is STILL affordable at $153 a month. Even a 50% increase to $184 would work.”
Ellen’s conclusion: “The GOP argument was B.S. in ’08 & it’s B.S. now.”
She might just change her mind if a decent alternative plan emerges. One based on math, not politics.