Republican attempts to repeal Obamacare have descended into farce.
Politico reports that Senate Republicans don’t even want their latest bill — which would repeal the 2010 health reforms without replacing them — to become law.
“The substance of this is not what’s relevant,” said Bob Corker of Tennessee. “This a pathway to conference. That’s the only purpose in this.”
But there is no guarantee the House of Representatives will agree to a conference, which is not designed to write laws to begin with. It’s a process to iron out differences between similar bills passed by both chambers.
The reason Senate Republicans must resort to this is that they haven’t been able to unify their own behind a health-care bill, let alone attract Democratic support. Read more
Senate Obamacare Replacement Isn’t Better Than House Version
It’s hard to unite health care commentators from the left and the right, but that’s what House Republicans have done with their plan to replace Obamacare.
The left is appalled that Republicans would make health care cheaper for Americans who are well-off and leave those who currently depend on Obamacare in the cold.
The right is disappointed that the plan only eliminates the individual mandate but keeps other parts of Obamacare in place, including the principle of federal subsidies and its insurance plan requirements. Read more
Absence of Obamacare Replacement Exposes Republican Deception
Hillary Clinton has a new plan to stop what she considers “unjustified” increases in drug prices.
Slate reports that her plan comes down to European-style price control.
As president, Clinton would create a task force of regulators with the power to decide whether price increases on old, essential medicines and devices were reasonable given product improvements and the amount of competition in the market. If not, the task force would have the power to mete out punishments to companies that were trying to profiteer, potentially with fines.
Fines would still require an act of Congress, where market-friendly Republicans are likely to retain their majority in the House of Representatives and block such penalties.
Nonetheless, as Slate puts it, “Clinton is subtly sending the message that she’s comfortable moving toward a more European system in which regulators have a direct say not just in what drug companies can charge the government, but what they can charge the rest of the public, too.”
It may not happen in the first four years of a Hillary Clinton presidency, but price controls are becoming Democratic Party policy — which means they could happen eventually. Read more
Shikha Dalmia writes at The Week that American president Barack Obama’s health reforms are unraveling.
UnitedHealthcare, the country’s largest insurer, has said it may need to pull out of the exchanges next year that were created under Obamacare.
The company expects a $425 million hit to its earnings, primarily due to mounting losses on the exchanges. “We cannot sustain these losses,” said the company’s boss, Stephen Hemsley.
Other insurers could follow. Some have already raised premiums by double digits to try to make end meets, but they still can’t make the numbers work.
Young and healthy stay uninsured
According to Dalmia, who is a senior policy analyst at Reason Foundation, the exchanges aren’t working because it are mainly the old and the ill who are signing up.
When the law was passed in 2010 — over unanimous Republican opposition — Democrats said 21 million more Americans would be insured by 2016 as a result of it.
The Obama Administration now admits that at most half that number is enrolling.
The reason for this pathetic take-up rate is that the lavish benefits — in-vitro fertilization for 50-year-old women, for example — that Obamacare mandated for qualifying plans have backfired.
Obamacare introduced minimum standards for insurance plans that were meant to prevent the young and healthy from only purchasing bare-bones insurance and thus failing to offset the costs of those who actually need care.
Critics of the law — including this blog — argued against mandating coverage of everything from ambulatory services and hospitalization to maternity care and rehabilitative services. It’s one thing for the government to mandate that people get insured; telling them exactly what they need to insure themselves against is an affront to independent-minded Americans.
In practical terms, it also makes insurance more expensive than it needs to be for many.
What happens is not that people listen to Uncle Sam and buy insurance even if they can’t really afford it nor think they need it. When health insurance is already far more expensive in America than in other wealthy nations, what happens is that many simply decide to go without and risk the penalty.
This, in turn, is forcing insurers to raise prices even more, which is causing more healthy people to drop out, unleashing the dreaded adverse selection spiral.
Rather than admit defeat and start over, Hillary Clinton, assuming she succeeds Obama in 2016, would introduce price controls to fight the market’s logical reaction. And so one government intervention designed to “correct” a failure of the free market would naturally lead to the next: to correct the damage done by the first.
This blog has argued before that there is a better way: remove the impediments to free enterprise in health care, pharmaceuticals and insurance.
It should not be the state’s prerogative to decide who can practice medicine. Drug companies should not have to ask permission before putting a medicine on the market. Insurers should be able to operate across state lines and sell whatever insurance plans they want.
None of this was the case before Obamacare when half the health care market was already dominated by Medicaid and Medicare, which finance health care for the poor and seniors, respectively.
Scott Walker’s campaign for the Republican Party’s 2016 presidential nomination has so far not impressed this blog. The governor of Wisconsin seems to be trying to appeal to every constituency in his party at once and the easiest way to do that is not say anything meaningful.
On Tuesday, he finally took a step toward defining what, if nominated and elected, he would actually do. And it’s not at all bad.
Like most Republicans, Walker has criticized President Barack Obama’s health reforms and, like all Republican presidential candidates, has promised to repeal it.
Walker lists the main shortcomings of Obama’s reforms. “It was written by lawmakers who believe the federal government always knows best,” he argues. It has forced Americans — contrary to the president’s promises — to change plans because the law imposed new standards on insurance packages. It has caused premiums to rise and quite possibly depressed employment, as companies with fifty workers or more are forced to buy health insurance for all their employees under it.
The biggest oddity — and problem — in American health insurance is that the tax system incentivizes people to get it through their employer. Other developed countries with health systems that are of comparable quality to America’s but much cheaper are tailored to individuals, so people don’t lose their access to care if they lose their jobs.
Walker’s plan would move the United States in that direction. He proposes tax credits for those not insured by their employer. But, unlike Obamacare, this would not involve a federal exchange and the size of the credit would be determined by age, rather than income or family size, so there’s no need for oversight by the Internal Revenue Service.
The value of the credits would range from $900 for those up to the age of sixteen to $3,000 for those over fifty.
The Washington Examiner explains that the credits would be “refundable,” meaning that individuals would receive the same fixed amount of money regardless of their tax burden.
So if a man in his 50s owes $2,000 in taxes and claims a $3,000 health insurance credit, he’d effectively receive a $2,000 tax cut and then another $1,000 in government spending.
According to Walker, such a system would “level the playing field between those who purchase coverage through an employer and those who purchase it on the open market.”
This would ensure people are not locked into their current jobs just to maintain health insurance coverage and give people the flexibility to switch employers or even careers.
It is a more market-based approach that conservatives should like, even if it doesn’t totally remove financial support from the government.
Walker’s plan would fix another big problem in American health care and something the Democrats did not do: allow people to buy insurance outside their state.
Current law won’t let Americans to buy insurance across state lines, making it difficult for smaller insurance companies to compete nationally and limiting consumers’ choices. Allowing nationwide competition should bring down premiums.
Walker would also raise the amount Americans can save tax-free in health savings accounts — to $6,250 per year for individuals and $12,500 for families. Being able to pay more care out of pocket should reduce the need for comprehensive insurance plans, again, saving people money.
These changes, as well as the elimination of regulations from the 2010 Affordable Care Act, would help reduce premiums by as much as 25 percent, according to Walker.
There are some question marks. The plan promises “additional reforms” to prevent insurance companies from denying coverage to customers with preexisting conditions — but it doesn’t spell out what those reforms would look like. It is difficult to imagine how this can be done with “incentives” alone when Walker rules out mandates.
Given that 70 percent of Obamacare enrollees were covered through an expansion of Medicaid and given that the program is projected to cost as much as $786 billion, or 3.1 percent of national economic output, by 2022, no health reform is complete without an overhaul of this entitlement program.
Walker proposes to reorganize Medicaid into smaller pieces: one for low-income families, which is what Medicaid was originally supposed to do, and another for Americans with disabilities and poor seniors. If this will save enough money to keep the program afloat is a question for the number crunchers.
At least Walker has a plan, though, and there are some good ideas in it. Now let’s hear what the other candidates propose to do other than repeal Obamacare “on day one”.