On Monday, House Republicans at long last revealed their alternative health care plan. After seven years of campaigning on a “full repeal” of Obamacare, Republicans have come up with, to put to charitably, an underwhelming alternative.
“Trumpcare,” or “Ryancare,” or whatever-you-want-to-call-it-care, leaves in place Obamacare’s most popular provisions. This is a problem, because those provisions are a primary reason why premiums have skyrocketed under Obamacare. What’s worse, the House GOP’s plan leaves in place the provision that health insurance providers cannot deny coverage or charge more money to those who have preexisting conditions.
Now, we should expect that Democrats do not understand the concept of insurance. But Republicans, who have spent the last seven years campaigning on the economic illiteracy that is Obamacare? Coming up with the same economic incoherence is stupefying.
This Isn’t How Insurance Works
The fundamental idea behind insurance–health insurance, car insurance, or any other form of insurance–is that you are betting against yourself. You pay the insurance company some money now, and the insurance company covers your needs later if your life’s circumstances take a turn for the worse.
Because insurance is a wager, the insurance company will sometimes charge more to cover known higher-risk individuals. That’s, for example, why car insurance is more expansive for teenage boys than it is for teenage girls. High school-aged males are more likely to get into wrecks, collisions, or crashes. Because the teenage male is more likely to need the insurance, his insurance premium is higher than that of his female counterpart.
Health insurance works the same way. Previous victims of heart attacks, for example, are much more likely to require medical treatment than recently-graduated college athletes. Consequently, insurers would often charge more for people in groups that, statistically, were more likely to need expensive care.
It is not discrimination to charge more for high-risk situations. As the left would say, it is “science.”
But Obamacare–and now, Trump/Ryancare–says that is discriminatory. Thus, young people have to pay high premiums for insurance they do not want or need, in order to subsidize older folks with higher risks of having health problems.
If it Looks Like a Mandate…
Some of us are old enough to remember when Republicans were against mandates. They even sued the Department of Health and Human Services and went to the Supreme Court over it. Republicans called the individual mandate a fundamental change in the relationship between the federal government and the citizen.
But if that was true, then why does the GOP bill keep something that looks suspiciously like the mandate?
The house plan repeals the individual mandate–but replaces it with another mandate disguised as an “incentive.” Under the proposed plan, anyone who goes more than 63 days without insurance must pay a 30% “late-enrollment surcharge.” Consumers must pay this, by the way, on top of their existing premium.
If it looks like a mandate, and reads like a mandate, then it is a mandate, regardless of any John Roberts-like word games you play.
More Bad Policy To Come?
These are just two problems with the House GOP’s replacement plan, but it gets worse. Four Senate Republicans came out against the bill, not because it does not do enough to repeal Obamacare, but because it does too much. Therefore, it is very possible that the final bill will be even worse than the one the House released Monday.
For years, the Republican intelligentsia told conservatives to sit down and shut up about Obamacare. We can never repeal Obamacare while Barack Obama was still President! We needed to elect a Republican Congress and a Republican President to get it done. They even voted to repeal Obamacare over 60 times so they could go home to their constituents and say “Look, I voted to repeal Obamacare.”
But, when push came to shove, that became apparent that was all a lie. Now, it looks like Republicans were never going to repeal Obamacare, Trump or no Trump.