What Will Congress Do About Obamacare?

What is going on with Obamacare, otherwise known as the Affordable Care Act?  Spirits were high about quick action in the House and even the Senate.  Ideas have not been lacking—there are several plans out there to replace the present law.  The obstacle seems to be the usual collective suspect—politicians and their obsessive worry about re-election.  It is simply a fact of life that politicians generally want (desperately?) to be re-elected once in office.  That is not likely to change, given human nature.  When we consider that fact in the context of Obamacare, one can see that different politicians have different concerns about what to eliminate and what to keep.  Should we keep the taxes?  Eliminate the taxes?  Keep pre-existing condition coverage?  Eliminate it?  Allow competition across borders?  Restrict it?  Require insurance coverage for all?  Make it optional?  And how do we pay for those who cannot afford coverage (by the way, a much smaller number than the total of people who don’t purchase coverage)?  On and on the list of concerns goes for politicians.

The result is that we begin to see resistance by enough Senators and House members that the move to “repeal and replace” has slowed down.  Perhaps that is a blessing in disguise.  I would like to see a little more deliberation.  Moreover, the law is so intertwined with so many other statutes that it will take time to sort that out.  But that said, it also seems that perhaps this slowdown is more fear than any careful consideration of the policy issues.  I can’t judge all motives—except perhaps those of the politicians at the Congressional retreat whose voices were caught on tape.  I am going to go out on a limb and make a few suggestions for action.

First, and this was an excellent insight by Philip Klein in the Washington Examiner, January 26, 2017, freeze all new enrollment in Obamacare AND allowing those who receive benefits to continue.  This action avoids the problem of simply cutting off everyone and then having no way for those who need insurance to get it and it also prevents an interminable continuation of the program.  Under this proposal, there would be a definite cutoff date for new enrollees and no new enrollees after that.This would also allow Congress to address the problem of those who can’t afford insurance by separating the problem of poverty from the problem of healthcare.  Subsidize the poor for healthcare but don’t make everyone else enter into a broken system that exacerbates the healthcare problem.

Second, we must introduce competition into healthcare.  It has been long absent.  This includes competition among insurers, among medical providers, among hospitals, and among those making medical technology.  The market ought to be wide open with no state boundary restrictions.  In addition, I would propose better ways to train more doctors by allowing more medical schools to open in all states.  State governments in collusion with state medical associations have been the major culprits in preventing this greater supply to emerge.  More nursing training and other medical professional training ought also to be allowed, private and public, though mostly private and without restrictions except basic competency, to be tested and measured objectively and without political interference.  Insurance providers must be allowed to compete across state lines for any and all health insurance products.

Third, as of now most people get their insurance though employers and when they leave that employment, they can’t “take it with them.”  Congress ought to unbundle health insurance from employer provision, so that an employee can take their insurance coverage with them as they wish, or get a new provider.  It would be up to the consumer.  Competition once again would be introduced, driving down costs and allowing innovation.

Fourth, what will we do about coverage for pre-existing conditions?  Here is a political time bomb if ever there was one.  Obviously pre-existing condition coverage is not really insurance at all but simply a subsidy.  But many people don’t care and want it to be available.  I don’t have an easy answer for that except perhaps to allow so many innovations in insurance coverage that one might be able to purchase almost any kind of or unlimited coverage for a price.  The price might be higher, but one could still get insurance.  To continue pre-existing coverage as insurance when it is not invites an incentive whereby people flee actual insurance and just wait to get sick.  This bankrupts any system over time.

Fifth, get rid of the taxes.  All of them, but especially the “Mandate.”  There should be no need of these kinds of taxes since we are no longer taxing some to subsidize others with respect to healthcare.  Any subsidies are from general revenue taxation, not special taxes.

These and other actions introduce competition, eliminate a bureaucratic (and rather dictatorial) nightmare, incentivize better quality, and provide greater choice, all at relatively low “political cost.”  Will Congress pass some or any of these proposals?  I have no idea, since I am not a prophet.  But perhaps someone out there is accidentally reading this.

8 thoughts on “What Will Congress Do About Obamacare?”

  1. Well put. I think most people, even those who would rather not see the ACA dissolved, would agree that you´ve suggested some reasonable policies.

    Can I ask, since you brought it up, what you think an ideal solution for preexisting conditions would be? After all, it´s not feasible to insure someone with guaranteed lifetime costs that exceed what they will pay, but most people (Barring the Trumps among us) need insurance for precisely those sorts of conditions. There´s an internal tension, because we need the insurance system most in the ways it is least equipped to help profitably.

  2. I don’t know that you’ve given this the serious consideration it needs before making recommendations. #2 how do you increase competition? #3 are you proposing the government get in the way of the free market and prevent employers from offering healthcare? #4 many people with pre existing conditions can’t afford the needed healthcare to survive. So yes insurance is a subsidy, for everyone. It is gambling that you will end up in that higher cost group.

    By the way, #1 I think is a great idea. #5 I disagree with from my own view point but I can see that from your viewpoint it’s a very good idea.

    1. I personally suspect that the market isn’t well suited to providing the result people want when it comes to healthcare and insurance. There’s no way to balance the cost- your life, or quality of life, hangs in the balance. What wouldn’t you pay to be healthy? To not die? In my opinion, that distorts the process to the point where the market can charge literally whatever people can (or, in many cases, cannot) afford and expect people to take them up on it. So, disclaimer, I am skeptical of of the idea at its core, and am pretty sympathetic to some form of universal healthcare. Just so my bias is out there.

      That said, I think there are some go-to answers for at least one of your questions. Competition would be increased, I commonly hear, if the inter-state limitations on insurance were lifted. He alludes to collusion between states and insurers, which would, ostensibly, dry up if the market wasn’t restrained to individual states.

      I agree with you on #3. I look forward to his explanation, because try as I might I can’t think of a way to accomplish this without large-scale intervention. Maybe that’s necessary?

      As for #4… you’re correct? I don’t know that he’s arguing that it’s not. This is the point where, referring back to my long disclaimer, I think the system breaks. Taking care of a person with a serious condition CANNOT be made profitable. Anyone who needs intensive treatment will almost definitely be unable to pay back what an insurer would have to pay for them. They are, by definition, bad for the bottom line, which is why insurance companies, given the wiggle-room, inevitably employ a building full of people to find reasons they DON’T need to give you what you paid for. It’s more profitable than covering your new-house’s-worth of bills every month.

      Good points, I just have my doubts that Dr. Clauson hasn’t thought about the implications. He’s a pretty thoughtful person, as a rule.

    2. Hmm.
      #2: I addressed competition in some detail but if that wasn’t enough, let me add that states and federal agencies should not be allowed to interfere with the choices of hospitals, insurance companies, doctors, medical schools, etc. to decide to enter a market to provide some sort of healthcare good. That opens up competition considerably. As of now, for example, many states have something called “Hospital Certification Boards” that decide where a hospital or health facility can be built and what it can provide–that is anti-competitive. Insurance coverage crossing state lines is another example. It goes on. I don’t think I need to belabor the main point.

      #3: Not proposing ti prevent them, but don’t restrict options to that only.
      #4: Insurance is not intended as a subsidy. If you want to subsidize, then do it separately, not through insurance programs.

      1. Okay I can understand your point of view. For #2 competition is severely limited where it matters most. If I have an emergency, which ED do I go to? The closest. No real opportunity for competition there. For anything else how do I make an informed decision? As a consumer I have no knowledge of the quality or price of healthcare before picking a provider.

        Insurance companies are in a position where they can encourage subscribers one way or another and that’s the only way that insurance companies can really provide value. If there’s not a move for them to become integrated into the care cycle then single payer is the most efficient option because it’s just a transaction of collect and pay money.

        Are you in favor of some form of subsidy for people who for instance have cancer? It’s part of the bigger picture of healthcare. I know what the cheapest option would be…

  3. Good post, gave greater clarity to some of my questions on this issue. In all honesty, do you think that your plan outlined in this post could actually happen?

  4. When Trump was elected and movement began to repeal ACA, people (myself included) were so excited to think this could happen that they forgot how long it took for the law to go through in the first place. If it took that long for the law to pass, of course politicians are going to take a while sorting out the details of a repeal (as mentioned in your first paragraph). I’m betting the ACA still has a long road ahead.

  5. The frustrating thing is that we have known for the longest time that these are the principles necessary to have a successful health care system, yet we have been utterly unwilling to implement them. In particular, competition would be a welcome addition, and it may actually be my personal favorite option for helping to fix the system. I sincerely hope the Republicans and Trump are able to pass something remotely resembling this plan (though I won’t cross my fingers).

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