Vol. 172 June 1, 2017 Why Republicans Dislike Obamacare (simplified)

June 2, 2017

“You pays yer money,
and you takes yer choice.”

 

 

The #1 reason is that the Affordable Care Act (ACA) expanded health insurance to at least 23 million voters in the name of Obama, a Democrat.

The #2 reason is that Obamacare is costing the federal government more than the Congressional Budget Office (CBO) predicted.

That is because more of the uninsured enrolled in Medicaid than predicted and less than predicted bought policies through the health insurance exchanges. I am sure that there are all sorts of complex economic reasons for that, but to my mind it seems pretty simple.  If Medicare is the Gold Card of health insurance, Medicaid is at least the Silver Card.  The Medicaid card is accepted by all hospitals and ERs (by law) and many physician specialists. Even some behavioral health services can be paid for with the card. Medicaid insurance is always state-funded, and each state develops their own program.”If you know one Medicaid program, you know just one Medicaid program.”

Obamacare increased federal subsidies to states that expanded people’s eligibility ( i.e.; by raising eligible income levels) for Medicaid insurance. Federal subsidies existed for the first few years, but Medicaid costs would eventually be borne by the individual states’ taxpayers. If you are the Republican governor of a state running for reelection every four years you’re probably not enthusiastic about that. However, one Republican Governor ( Romney of Massachusetts) had already expanded that state’s Medicaid eligibility to achieve nearly 100% insured. The present Republican Governor (Baker of Massachusetts) will be very unhappy if he loses the federal subsidies to Medicaid under Trumpcare.

Health insurance exchanges were supposed to recruit into the health insurance risk pool a lot of healthy young people not covered by employer-based plans. These healthy young people would need less health care than their elders, so their premiums would be a “net plus revenue” to the insurance companies. When that “net revenue” did not appear as large as expected several companies withdrew from the exchanges with much media attention. The “individual mandate” tax which was supposed to “incentivize” the uninsured to buy policies through the exchanges was apparently too low to work.

So, the essential elements of the Republican “replacement” of Obamacare are to:
1) roll back federally subsidized Medicaid expansion and
2) do away with the health insurance exchanges with their federal subsidy of premiums and the associated “individual mandate”.

Of course, Republicans propose to keep the more popular benefits like required coverage for pre-existing conditions and coverage for children up to age 26 living at home. Obamacare also established a new standard definition of “essential benefits” such as pregnancy and other maternal benefits and put a maximum cap on premiums for the elderly. One Republican proposal would define pregnancy as a “preexisting condition” and deny coverage. Watch for further developments in evolving Senate proposals.

The predictions of the CBO in the past (since Nixon created it on the way out the Oval Office door) have been more nearly correct than those of most other agencies and organizations. It’s reputation as bipartisan and objective remains intact. The publication of Republican “replacements” before the CBO’s analysis could be carried out clearly hurt the credibility of their proposals.

Multiple evidence-based studies and the experience of all other developed countries with government-based health insurance (does NOT have to be a “single payer”) have shown that providing universal health insurance in the long run saves money;
-by providing access to medical care for all citizens,
-by enhancing the cost-effective introduction of new technology,
-and by rationalizing the resource allocation of a defined budget.

We have a history of difficulty in taking the long view. For example, the initial enthusiasm for preventative/wellness programs exhibited by the early HMOs eroded considerably when they realized that the policy holder might not be with the same insurance company when the time came years later to reap the benefits of good health (less medical care expenses).  Certainly Governors, congressmen, and other public officials with short 2, 4, or 8-year terms have little incentive to always appreciate the long-term cost benefits down the road. (“No regulations to fight against climate change” comes to mind)

So as “they”say, being either the British magazine Punch in 1846 or Mark Twain in 1884 in “Huckleberry Finn”,
“You pays yer money, and you takes yer choice.” 

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