How hard can it be to come up with an ObamaCare replacement, anyway … especially when Republicans have been promising to roll it back for almost seven years? Senator Rand Paul tells MSNBC’s Morning Joe hosts that his own replacement legislation will drop on Tuesday or Wednesday, and that he wants a commitment on replacement before proceeding to repeal. Paul also wants a different approach to dealing with pre-existing conditions (via Newsmax):
PAUL: I think we should have a replacement bill same day same time simultaneously exactly the same day, and we’ve been complaining about Obamacare for six years. Certainly we can have a replacement bill on the same day. I’m putting one together. It’s in legislative language, and we’ll release it to everybody Tuesday or Wednesday of next week.
When it comes to the goal of universal coverage, Paul tells Joe Scarborough, the answer isn’t a government program. It’s a market that can innovate and keep costs down through competition:
PAUL: We want more people who are working class people who can’t afford insurance to get insurance. So the main thing you have to do is the opposite of what ObamaCare did. You need to make insurance less expensive.
SCARBOROUGH: How do you do that?
PAUL: Well, you can’t mandate what’s in it. If you tell someone that insurance has to include ten different items like Obamacare did, then it will be more expensive. We should let insurance be sold to what the consumer wants. That’s what we do in every other marketplace.
In what seems like a counterintuitive move, considering the political currents at the moment, Paul suggests that those with pre-existing conditions find a different solution than traditional insurance coverage. However, his proposal for a solution is to form larger groups for better pricing leverage:
PAUL: You cannot insure against something that is already known. So if we already know that you’re dead, we can’t sell you life insurance. If we already know that you’re sick, we can’t sell you insurance against being sick. Insurance is against something that’s unknown. Now, you can take care of people and you’re going to have to take care of people, but I’ve been saying that the real sick people that already have pre-existing conditions, it’s dumb to buy them any sort of insurance, a risk pool, any of that. Putting a bunch of sick people in a pool and buying insurance doesn’t make sense. If they’re poor you take care of them through a government program like medicaid and things like that. …
What you want to do for most people is you want to have enough people able to join together to have leverage, lower prices, regardless of a pre-existing condition.
That might work theoretically, but … it’s also what ObamaCare purported to do. That was the point of the exchanges, after all; they were supposed to work as leverage to get better premium pricing by pooling all individuals into large groups that would force insurers to negotiate better prices regardless of individual health status. That was the basis of Barack Obama’s claim that an American family of four would pay $2500 a year less in premiums. It’s also the reason that ObamaCare included a must-issue mandate and a community rating mandate that forbade premium increases on the basis of pre-existing conditions. That combination drove up premiums, which pushed healthier people out of the market, which pushed up premiums even more, which drove even more healthier people out of the market … and so on.
Unfortunately, the only way to keep healthier people insured is to stop having them subsidize the risks of sicker people. Pre-existing conditions will require some sort of high-risk pools, at least on a temporary basis, and the premiums for that will probably require some sort of subsidy until those consumers get the one year of continuous coverage that exempts them from the high-risk pricing. Those should be tackled at the state rather than federal level, however.
It’s precisely this complexity that Republicans have to address, and why scoring an old bill from two years ago — as the CBO did this week — makes no sense at all. As I write in my column for The Fiscal Times, it was a nakedly political ploy by Chuck Schumer to get talking points on the cheap:
Why did CBO score an old bill that only covered part of the process, rather than wait a few weeks to see what Republicans plan to offer? The CBO report states that it was “prepared at the request of the Senate Minority Leader, the Ranking Member of the Senate Committee on Finance, and the Ranking Member of the Senate Committee on Health, Education, Labor, and Pensions.” All four are Senate Democrats, led my Minority Leader Charles Schumer (D-NY), an adamant opponent of Republican efforts to repeal Obamacare. The report gives opponents of the incoming administration some significant talking points about legislation that has long since expired but still has usefulness in driving public opinion.
Perhaps Schumer and his Senate allies should have made their argument before the 2016 election, using the previous scoring on partial Obamacare repeal. Oh, wait – they did, and they did in the 2014 midterms as well. Voters delivered their verdict on Obamacare, one of the most discussed policies in both elections, and Democrats lost both times. Reaching back to 2015 for data on an approach that is at best incomplete and at worst expired may give them some talking points, but it won’t make voters love Obamacare or turn their back on their clear decision to replace it with policies that allow for innovation, proper risk management, and economic growth.
The big question will be whether Republicans led by Donald Trump and Paul Ryan can deliver that kind of replacement. The jury may still be out on that, and the details of both repeal and replacement may still be in negotiation. Perhaps we should wait on scoring those outcomes until we see what options Republicans produce, and take our time in analyzing them. Had we done that seven years ago rather than rush a three-thousand-page bill through Congress and trust that we would know what was in the bill after it passed, perhaps we could have avoided much of the damage that has occurred since the passage of Obamacare.
Paul’s on the right path conceptually, certainly. But this time, let’s make sure we have our ducks in a row, and that we’re not falling into the same magical thinking that got us where we are now.
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