Tag: AHCA

The Health Care Implosion

The Republican attempt to repeal Obamacare is in deep deep trouble. It does not have support from the conservative wing and has fierce opposition from moderates and liberals. It is polling at 57-16 against and has majority opposition from conservatives. The most recent CBO analysis indicates that it will reduce the deficit less while still leaving 24 million uninsured. And Trump, demonstrating the great deal-making ability he boasted about, has told the GOP that if they don’t pass it, he’s done with healthcare reform and will just leave Obamacare in place.

Why is this going so wrong? After passing dozens of repeals over the last eight years, why is the GOP in this morass of pushing a healthcare that no one likes? I think the answer is that they’re trying to deal with 2012’s problems instead of 2017’s.

Let me take a step back. As the Iraq War went south and many people demanded that we leave, I pointed that leaving Iraq was not the same as not having invaded it to begin with. Whether the invasion was right or wrong, there was a mess there that was going to get worse if we left. And indeed, our departure set the stage for the rise of ISIS.

We’re in the same place now. Repealing Obamacare is not the same as not having passed it in the first place. The last chance the GOP had for that, realistically, was 2012. Now that Obamacare is ingrained into the system, simply repealing it — even if that were possible — would be a nightmare. Insurance companies have planned out for Obamacare being there. So have individuals. We’d be talking about a major disruption of a two trillion dollar economy.

As a result, the AHCA finds itself trying to serve too many masters: giving the GOP base the instant gratification of an Obamacare repeal while not getting rid of the Obamacare provisions people like; cutting Obamacare taxes while not exploding the deficit; enacting a long-overdue Medicaid reform while trying to cut Medicaid expansion; putting together something that can pass by reconciliation. And the result is this unpopular, unconservative, hastily-revised Frankenstein mess of a proposal. It will only accelerate the collapse of Obamacare while giving the Democrats the ability to blame Republicans for the collapse of their Frankenstein bill.

The GOP needs to let the AHCA die. Maybe just pass the Medicaid reform, which they could probably get the votes for. The short-term political hit will be fierce. But then they could take a year to put together a reform package that deals with the healthcare system we have now, Obamacare and all, not the system we had before Obamacare. The end result would be a package that is much more palatable to conservatives, addresses the damage Obamacare has done to the system and makes insurance more affordable.

Put it together, have hearings, go through the normal process. And then dare the Democrats to filibuster it. At the very least, they’ll have something to run on in 2018 or 2020. And at best, they’ll pass it and fix the mess Obama handed to them.

Thoughts on the CBO Scoring

I haven’t written much about the Republican healthcare plan because it’s fairly obvious that it’s never going to happen. Another nail was put in the coffin yesterday when the CBO released their analysis of the Republican healthcare plan. The bottom line is that it would cut spending by $800 billion over ten years, cut taxes by $500 billion over ten years but increase the number of uninsured by about 24 million through both cuts to Medicaid and the elimination of the insurance mandate. The reaction has been about what you’d expect: conservative touting the deficit reduction and downplaying the uninsured numbers; liberals doing the opposite and accusing Republicans of literally murdering people to get “tax cuts for the rich”.

A few thoughts on this:

First of all, I would take any projections about the number of insured with several large helpings of salt. This number is infamously difficult to project. The CBO previously overestimated how many people were going to enroll in the Obamacare exchanges to the tune of 8-10 million. A lot will depend on what’s happening with the economy, what the states do, etc.

In many ways, the GOP is being more honest here with their CBO analysis. As McArdle reminds us, the Democrats heavily gamed the CBO projections of Obamacare:

During the process of passing the Patient Protection and Affordable Care Act, or PPACA, many of us complained that Democrats were gaming the CBO process, tossing out desperate cuts and pay-fors over and over until they got the score they wanted, in much the way video-gamers try to kill a hard boss. They ended up jamming in a bunch of provisions that made Obamacare’s finances look sturdier than they were, but realistically, had no hope of ever taking effect (among my favorites: a never-never long-term care program, and a requirement that everyone in the country had to issue 1099s to anyone who sold them more than a few hundred dollars worth of stuff). We certainly can’t accuse Republicans of that!

They also phased in the tax hikes years ahead of the spending hikes so that it appeared to balance over ten years even though it was running a deficit by the end of the window.

Second, if you want to know why so many people despise the Left, check out the verbiage being used to describe this. The Republicans are “taking away” people’s health insurance and “giving” money to the rich. They are “stealing from the poor and giving to the rich”. This is “class warfare” of the rich against the poor. This is high-grade horse manure but unfortunately what passes for thought in Left Wing circles. You can’t “take away” something that you’re giving to people free of charge. And you can’t “give” money to people that is already theirs. A more accurate description is that the Republicans are taking less from the rich to give to the poor. That’s fair enough and if you think that it is the government’s job, fine. But please stop with this “taking from the poor and giving to the rich” line. It’s nonsense and a mangling of the English language.

Third, ignore any claims that the Republicans are literally killing people here. We were told, when Obamacare passed, that lack of health insurance killed 100,000 Americans every year. If that had been the case, we should have seen a big drop in mortality since the bill was passed. We haven’t (in fact, mortality has ticked up a bit). The benefits of Medicaid, in particular, are highly disputed.

Fourth, I have no idea, given the inevitable lashing the GOP will endure, why they’ve written the bill this way. Since they’re going to be accused of murdering people anyway, why go with Obamacare Light?

Finally, let’s not forget something important. It’s not like the Republicans are fixing a problem that doesn’t exist. The ACA is teetering, with insurance rates skyrocketing, insurers pulling out of the exchanges and the beginnings of a death spiral in the individual insurance market. The problem with the ACA is that it did nothing whatsoever to make insurance “affordable”. All it did was shift the burden around, taking money from one group of people to make insurance “affordable” for another. But the price of health insurance remained what the price of health insurance is. And since numerous people are deciding they would rather pay the fine than astronomical insurance rates, the system is on the brink of collapse.

The Republican plan, however, does not address this problem at all. If anything, it makes it worse, replacing the Obamacare tax with higher insurance premiums for those currently uninsured, thus making the death spiral even steeper. It’s simply a terrible idea, both financially and politically. Because if the Republicans pass this law and the Obamacare markets collapse, they will take the blame for it.

Many are suggesting that the Republicans should just let Obamacare collapse so that the Democrats take the blame. I’m dubious about this. First of all, I don’t like using millions of people’s healthcare coverage as some kind of political tool. Second, the Republicans will almost certainly be blamed anyway. In fact, many liberals are blaming Republicans right now for eliminating the risk corridors — the subsidies paid out to insurance companies to keep the exchanges afloat. That’s how bizarre politics has gotten — Democrats accusing Republicans of killing poor people by their refusal to subsidize some of the largest businesses in America. Either way, Republicans are going to be blamed for the mess that Obama has created. I don’t see that there’s a good option here. But passing the AHCA is certainly a worse option than doing nothing.

Ultimately, our efforts at healthcare reform continue to founder on the same rocks: Americans can’t make up their minds what they want. Every healthcare system in the world balances tradeoffs. Ours gives up universal coverage and affordability for quick response and rapid technological innovation. Socialized systems are universal and “free” but sacrifice availability and demand heavy taxation. What the voters seem to want is insurance where they can get all the care they want, see any doctor they want but not have to pay any money for it. That’s simply not going to happen. And until someone — Republican or Democrat — acknowledges that, we will continue to stumble from bad plan to bad plan.