Dr. 51 Votes: or how the GOP philosophy on healthcare has changed but its bill still has no direction

In all the hoopla of Obamacare (Affordable Care Act) repeal efforts, it’s been challenging to see the forest from the trees: what exactly is being changed, why it’s going to be better, how many people will lose insurance, will there be “freedom of choice” and just what exactly does that phrase that mean, etc.
My focus has and always will be with the facts, those being that according to the non-partisan Congressional Budget Office (CBO) at least 20 million people will not have insurance once the House or Senate bill is passed. But one thing I, and I believe many have overlooked while being so in the weeds of numbers and insurance lingo, is the philosophy behind what are now three versions of published GOP ACA repeal and replace bills. If you noticed, all three versions of the bill involve subsidizing private insurance for Americans; i.e. using dollars collected from taxes or diverting them from other funds to private individuals to use.
I have to admit that I didn’t notice this when the bills were released, I was more so distracted by the CBO score, but the pivot is a huge change in standard GOP ideology, seeing as many in the GOP call for an end to “hand-outs” like giving money to people to buy things with. Avik Roy, opinion editor for Forbes Magazine, journalist and policy advisor and the co-founder and president of the Foundation for Research on Equal Opportunity, a conservative-based think tank, recently pointed out this fact to me in one of his columns and guest interviews.
Ever since Obamacare was put into law in 2009, Roy has been striving to create policy with a conservative-based approach that was founded on universal healthcare, but through private insurance and less government intervention and regulation (his plans are documented in two versions of the plan Transcending Obamacare). Roy argues that the American Health Care Act (AHCA), the Better Care Reconciliation Act (BCRA), and its revision, show a ideological shift that has not been seen yet, by the GOP. Honestly, he’s right. I have to give credit where credit is due: putting the amount of tax-funded subsidies aside for a moment, the GOP has decided that it will do some form of wealth redistribution to benefit the poor.
Some would say that Obamacare functions off the same principles of using tax-funded subsidies, why isn’t credit being given to Democrat law makers for such an innovation in 2009, and they would be right: there is no credit. If you support the GOP bill for its subsidies, then you have to support Obamacare’s subsidies. You can disagree with the Medicaid expansion, which is the real point of contention between the two parties’ final goals of health insurance markets, but it’s ok to like some parts of something. But while the broader GOP has decided that subsidies are now a pre-requisite to any bill, the real question lies in how to get the most people, the most insurance, hence a race to get to 51 votes in order to pass the bill through reconciliation and avoid a Democrat filibuster.
Roy argues on the podcast The Ezra Klein Show that there are parts of the BCRA that he’d like changed, but the broader vision is what he’s holding out for. However, just because you support the grand vision of something, doesn’t mean you ignore what’s happening to get there.
In order to get to 51 votes, the revised version of the BCRA is keeping the Obamacare taxes of a “3.8 percent tax on net investment income for individuals earning more than $200,000 and couples earning more than $250,000; and an 0.9 percent surtax for the Medicare insurance program for the elderly on people with those incomes,” according to Reuters. The bill removes the tax increase on medical device manufacturing, crucial in the federal governments funding to the expansion of Medicaid, which only furthers the GOPs commitment to defunding Medicaid, but only after 2025.
The new plan implements a Ted Cruz-based amendment, in which insurance companies can sell deregulated insurance plans that only cover catastrophic events, as long as the insurer offers plans that have the essential health benefits of Obamacare (covering pregnancy, maternal care, prescriptions, mental health, etc.). It also adds $70 billion to an already $112 billion to be used as cost-sharing subsidies for those that are a drain on health insurers (those usually with high medical costs or pre-existing conditions). The bill also sets aside $45 billion to help fight the opioid epidemic, but doesn’t actually go into detail about how it will accomplish that.
Several senators were on the fence about the bill — even losing two senators the GOPs bill could be dead. Many are considered Moderate Republicans who live in states that took the Medicaid expansion under Obamacare and have received great results in doing so. Any slash to Medicaid could cost a re-election bid. Senate Leader, Republican Mitch McConnell has been forced to revise the bill with the new taxes and amendments, hoping that its enough to sway the on-the-fence voters. The only issue is that this bill was created was to try and get 51 votes, yet there is no clear direction on what this bill’s goals are, or even a reflection of the GOP values and principles.
Avik Roy argues that the subsidies are necessary in creating a market that doesn’t rely on Medicaid. The bill does this, but the drop off from Medicaid to the standard that the BCRA is using (a bronze plan that covers about 58 percent of a customer’s health costs, while Obamacare uses the silver standard, which covers 70 percent of a customer’s healthcare costs) will create scenarios in which people will go from getting coverage completely paid for, to being dumped onto insurance plans that cover less and cost more. The deregulation resulting in selling skimpy plans at low cost and selling plans that actually cover health costs essentially creates a high risk pool that millions of people will join, which only raises premiums higher. If people choose to have skimpier plans, insurance companies will not make enough money to offset the costs of those who bought more extensive coverage, which means that insurance companies will need to raise premiums for those who have extensive insurance, resulting in the federal government setting aside more than the nearly $200 billion that they set aside now. The problem with high-risk pools is that it will always cost more money, and costs will always go up, all the way to the point when most Americans will be in this pool, resulting in a health insurance market collapse because there is no longer money to fund them.
Not to mention the fact that all this bill does is inflate the pockets of hospital CEOs, who can freely charge what they want for anything. Before Obamacare, hospitals absorbed the costs of people who didn’t have insurance and couldn’t afford surgeries. This resulted in hospital CEOs, charging those with insurance more money, which caused premiums to go up. One valid criticism of Obamacare is that the bill did nothing to regulate price. In fact, by guaranteeing coverage to millions, hospitals could freely charge more money for MRIs because they would be forced to be paid that amount. The healthcare industry is the only industry, in America, where advancements in technology do not result in cheaper costs.
No one predicted that Obamacare premiums would go up on an average of 22 percent. Why aren’t we predicting this as a possibility for this bill, since it functions the exact same way Obamacare does? Iowans virtually only have one insurer covering them. Why do we assume that they will come back if this law, which functions on the exact same model as Obamacare, guarantees the same process?
All of this harks back to the liberal argument of achieving universal healthcare through the state. Because there is no standard of what is considered “good” insurance among conservatives for an individual market, and there is no focus on why costs go up for insurers. The federal government says that the minimum car insurance someone needs is to cover the other vehicle’s damages. In this country, we can’t agree on that, and until we do, arguments on healthcare are passing a hot potato until markets collapse and liberals get a shot at controlled costs through state-sponsored insurance.
The end result of this bill if passed, means that people get handouts for bad insurance and for expensive insurance, and the government agrees to fund it through cost-sharing subsidies, until it has no money left.