Obamacare

What the GOP's Pledge Has in Common With ObamaCare

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“It’s time to do away with the old politics: that much is clear,” say the Republicans behind the new Pledge to America before they go on to propose 135mb worth of mostly old and familiar GOP ideas. (Next time, can they include a promise to learn how to compress a PDF?) Granted, some of those ideas are an improvement on the status quo, but that’s not saying much. And quite a few of them aren’t really any better.

Pledged!

For example, a big chunk of the plan involves reforming (re-reforming?) the health care system. Priority number one, of course, is repealing and replacing the PPACA, a.k.a. ObamaCare, which would be lovely, and probably popular, if they could actually do it. But as long as there’s a Democrat in the White House, that’s an aspirational goal rather than a practical one. Still, as Hollywood proves every year, we’re all suckers for stories featuring The Underdog Who Faces Impossible Odds or The Crazy Dreamer Who Dares to Dream Big, so sure, why not?

Repeal won’t be easy (to put it very mildly), but at least there's plenty of agreement that it would be a nice thing to do. Replacement, though, is where things get tricky. The GOP is also pledging to allow the purchase of health insurance across state lines and expand health savings accounts, both of which are reasonably good ideas. The party is also pledging to pursue federal medical malpractice reform, which is more problematic. For one thing, most common med mal reform proposals, such as caps on noneconomic damages, would harm some patients (those wronged) and help others.  (For a helpful overview, see page 163 of Cato’s Handbook for Policymakers.) Moreover, as the Cato Institute’s Michael Cannon has pointed out repeatedly, it’s not clear that the Constitution actually allows for the federal government to implement such policies. And federalizing such reforms would likely get in the way of state-based experimentation.

Meanwhile, if the GOP was hoping to distance itself from President Obama’s health care overhaul, it’s gone about it in an awfully odd fashion: The Pledge includes a number of promises to follow-through on some of the most problematic ideas in ObamaCare. Here’s a key passage:

Health care should be accessible for all, regardless of pre-existing conditions or past illnesses. We will expand state high-risk pools, reinsurance programs and reduce the cost of coverage. We will make it illegal for an insurance company to deny coverage to someone with prior coverage on the basis of a pre-existing condition, eliminate annual and lifetime spending caps, and prevent insurers from dropping your coverage just because you get sick. We will incentivize states to develop innovative programs that lower premiums and reduce the number of uninsured Americans. [bold added]

If eliminating benefit caps and preventing rescissions is now GOP policy, then they’re with the Democrats; ObamaCare does both of those things. The new health care law also includes a number of state-based pilot programs intended to look for ways to incentivize medical efficiency.

But the larger problem is the requirement that insurance companies be forced to sell anyone with prior coverage a policy regardless of medical history or current ailments (preexisting conditions). It’s a form of what's called “guaranteed issue,” and it’s at the heart of the problem with ObamaCare. Usually paired with another policy called “community rating,” which strictly limits how insurers can charge individuals differently based on their health risk factors (which ends up meaning that individuals with risk factors get charged more), it’s a very popular set of reforms, for obvious reasons: It turns an insurance premium into an all-you-can-eat health care buffet that you only have to pay for when you want it.

But in addition to being popular, it’s also a recipe for a swift insurance death spiral. Knowing that they can get insurance at any time, healthy people leave the pool to save money. That drives up premium prices, which drives more people out of the pool, and so on and so forth until you’re left with a very small, very sick, very expensive insurance pool. The PPACA’s authors decided to solve this problem by including an individual mandate requiring everyone to purchase health insurance or pay a tax/penalty.

But the mandate is among the least popular provisions in the bill. And more to the point, Republicans have campaigned against the mandate, and GOP officials at the state level are leading a multistate lawsuit challenging the mandate on constitutional grounds.

So here’s the question: Are Republicans now in favor of a mandate? Or are they in favor of insurance market regulations that are sure to decimate the country’s health insurance market?

Update: Wonk Room has a chart listing the ways in which the GOP Pledge resembles the new health care law.

Update 2: To clarify, the precise language says that Republicans would make it “illegal for an insurance company to deny coverage to someone with prior coverage.” So technically what they’re calling for is not a blanket ban on coverage denials, but a ban on denying coverage to the previously insured, a policy that would probably have much less effect on the insurance market. But considering the careful the first line in the sectionâ€"“health care should be accessible for all, regardless of pre-existing conditions or past illnesses”â€"it seems relatively clear that Republicans are attempting to address public concern about insurance companies denying coverage based on preexisting conditions. Now, that opening line is also carefully phrased; it says  â€œhealth care” rather than “health insurance.” Still, given that Republicans have traditionally been squeamish about discussing whether insurance companies should be allowed to deny coverage to those with preexisting conditionsâ€"last year, Rep. John Boehner boasted of a GOP plan that “helps Americans with preexisting conditions,” and in the days after the PPACA passed, Sen. Cornyn said that “there is non-controversial stuff here like the preexisting conditions exclusion”â€"it’s pretty easy to imagine how a policy sold with this sort of rhetoric ends up after it goes through the political sausage-making machine.

Lots more on the Pledge from Nick Gillespie here and here.