Republicans Save Obamacare:
And Actually Make it Worse!
By Richard Moss MD
Taking something away once given is nigh impossible in a democracy. Just ask the Republicans in Congress. Obamacare was a giveaway for millions of Americans. It was also fatally flawed. After a trillion dollars spent and massive cuts in Medicare reimbursement, premiums and deductibles have soared. Consumers did not keep their doctor or their plan. The nation’s largest insurers have jumped ship. Bailouts of insurance companies will be required. States and counties across the land have only one insurer. The Affordable Care Act is unaffordable for tens of millions of Americans not being subsidized.
The ACA needed one thing: to be given a merciful death. Repealing Obamacare was the single issue that gave Republicans historic wave elections, federal monopoly power, and overwhelming dominance in the states.
But instead of repealing it, the Republicans have saved it, and in more grotesque form. The new bill will lead to an even more rapid collapse of healthcare markets in America, only this time with Republican fingerprints all over it.
Officially known as the American Health Care Act, it has attracted a variety of monikers including RINO Care, Obamacare lite, and Trumpcare. But Trumpcare is appropriate. The President should have taken the lead, but he didn’t. Instead he handed it over to the Republican Establishment, the McConnells and Ryans in Congress, and in so doing has let down his voters and the country.
The flaws of Obamacare are legion but two are crucial. These are “guaranteed issue” and “community rating,” the cost-drivers that have made Obamacare unsustainable. Guaranteed Issue allows consumers to buy insurance regardless of health status. Community Rating, requires insurance companies to charge the same price. Imagine forcing life insurance companies to charge a 75 year old the same as a 25 year old, or coercing auto insurance companies to charge the same after a car accident as before, and you will understand the economic illiteracy of Obamacare. It is not insurance. It is a giveaway.
These two features of Obamacare incentivize consumers to defer purchasing insurance until they must have it. They deprive health insurance companies of the necessary balance of healthy buyers to less healthy ones, which pools risk and keeps premiums down. By driving healthy consumers out of the market, and leaving only the unhealthy ones, you drive up rates, increase the ranks of the uninsured, and destroy the market place. These two interlocking mechanisms account for the unfolding “death spiral” of Obamacare. Trumpcare preserves these two features thus ensuring its own ultimate failure and collapse.
There are other odious components of Obamacare including the individual and employer mandates, both of which are unconstitutional, notwithstanding Chief Justice John Roberts’s sophistry in 2012. The employer mandate has been a dead weight on the economy and a boon for part time work. Insurance mandates require a minimum “essential” package including items like sex change surgery and prostate care for women that drove up rates as well. The absence of a cap on payments also served to increase premiums. But guaranteed issue and community rating were the primary mechanisms behind the escalating premiums and deductibles.
Trumpcare eliminates the employer and individual mandate (and various Obamacare taxes), the “funding” mechanisms of Obamacare. Conservatives would normally rally behind such measures, but only if insurance mandates, guaranteed issue and community rating were similarly terminated. Absent this, Trumpcare will exacerbate the death spiral of the market place as consumers will now have less incentive to buy insurance and employers will dump their plans. The individual mandate is replaced by a 30% increase in insurance premiums for anyone dropping their insurance, which will do nothing to prevent individuals from dispensing with costly insurance. Eliminating the mandates and taxes thusly will blow a hole in the budget and cause further market dislocation.
Trumpcare also bankrolls individuals and families earning $150,000 up to $14,000 a year, phasing out above that but still theoretically subsidizing consumers with incomes above $200,000, a massive new entitlement. It preserves the Medicaid expansion and does not freeze enrollment until 2020 thus incentivizing states to expand their Medicaid rolls. It also promises $100 billion in subsidies to the states to assist the poor and to create risk pools. The regulatory, subsidy, mandate cost-drivers of Obamacare are all in place or enhanced. It is a bill only a Democrat could love.
Republicans should repeal Obamacare with the same bill they repeatedly sent to Obama to veto the last seven years. Then, it was empty political theater. Now, with a Republican President, they are afraid to. They could extend it a year providing time for recipients to make other arrangements. Instead Trump, the hackneyed Republican leadership in Congress, and vested interests have teamed up not just to preserve Obamacare but make it worse. There has been no draining of the swamp. This is the swamp. The Trump Revolution has been derailed.
March 17, 2017
Brief Bio: Richard Moss MD is a practicing Ear Nose and Throat Surgeon, author, and columnist who resides in Jasper IN. He lost his bid for the Republican nomination for Congress in Indiana’s 8th district in 2016. Find more of his essays and blog posts at exodusmd.com. Also find him on Facebook, Twitter, YouTube, and Instagram.