Obamacare

The Republican Plan to Repeal and Replace Obamacare Will Do Neither

The GOP is heading into a health policy quagmire of their own making.

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Credit—Ron Sachs/CNP / Polaris/Newscom

For years, Republicans have vowed to repeal and replace Obamacare. GOP leadership in Congress held dozens of symbolic votes to repeal the law, teeing up repeal votes shortly after each election cycle so that newly elected members could report to their constituents that they, too, had voted to repeal the law. Last year, President-elect Donald Trump ran as an avowed opponent of the law, promising to strip it from the books and put in place a different plan—something "terrific." After the election delivered unified control of Congress and the White House to the GOP, the party's congressional leadership began to declare that their first act would be to repeal and replace the law, a claim that the administration has repeated.

The repeal and replace of Obamacare, in other words, was—and is—the party's top domestic policy priority. Yet the GOP's current plan to repeal and replace the law would do neither.

Instead, it would further destabilize the already foundering individual health insurance market while setting up a political and policy equilibrium that is likely to make more effective reforms even more difficult.

The current Republican plan, as described by GOP aides to Philip Klein of The Washington Examiner, is to repeal the law now, but leave it in place for a transition period of somewhere between two and four years while they work out a replacement, which in theory would come later this year, and might be passed in pieces rather than as a single bill. It is not a plan to repeal and replace, but a plan to repeal and delay, while promising that a replacement plan will come later.

It is a tactically foolish course of action with numerous potential pitfalls and problems—not least of which is that it does not even repeal all of Obamacare.

To understand why, it helps to understand a bit about Senate procedure. Although Republicans have a majority in the Senate, they lack the 60 votes needed to overcome a filibuster. This means that a repeal bill can only be passed as part of a process known as reconciliation, which allows certain bills to move through the Senate on a simple majority vote. Thanks to a somewhat obscure requirement known as the Byrd Rule, however, reconciliation can only be used on provisions that are directly relevant to the budget. If there is any question about whether a provision passes the Byrd Rule or not, the Senate parliamentarian makes the call.

What Senate Republicans have taken this to mean is that they can repeal Obamacare's tax and spending provisions—namely its insurance subsidies and the individual mandate, which the Supreme Court ruled was a tax—but not its insurance regulations. Those regulations include provisions requiring insurers to sell to all interested parties and restricting them from charging more to individuals with preexisting conditions.

This is not an unreasonable interpretation of the rule, especially since Republicans, in a legislative test run early last year, got approval from the parliamentarian for a version that repeals the budgetary provisions. However, Michael Cannon of the Cato Institute and Paul Winfree of the Heritage Foundation have made a strong argument that the insurance regulations could be repealed through reconciliation as well, because, as the Obama administration has argued in court, those regulations are inextricably linked to the rest of the law. So far, though, Republicans in Congress have shown no interest in pursuing this argument.

The problem with repealing the mandate and subsidies but leaving those regulations in place is that doing so would decimate the individual market for insurance. Virtually every health policy expert, including those who oppose the law, agrees that this is what would happen. Indeed, it is what has occurred over and over again in states that passed preexisting conditions regulations without a mandate. It is true that the health insurance exchanges set up to facilitate the individual market under Obamacare are already unstable thanks to a sicker, smaller group of enrollees than expected. The Republican repeal plan, however, would exacerbate that instability, and quickly lead to a full-blown collapse.

Or it would if it ever came to fruition. Republicans are attempting to avoid this fate by putting repeal on delay, creating a transition period during which they can work on developing and passing a replacement plan.

Even in the best of circumstances, however, this will lead to a different sort of instability. With Obamacare set to expire in just a few years, and no clear sense of what (if anything) will proceed it, insurance companies, many of which entered the exchange market in hopes of building long-term business, will have even less incentive to participate in the exchanges than they do now—that is, unless the administration provides significant financial incentives for them to stay. The problem with this is that it amounts to the sort of illegal bailout of Obamacare insurers that Republicans have repeatedly criticized and challenged in court.

All of this, of course, is contingent on Republicans actually unifying around and passing replacement legislation. There is no reason to believe that the party will be able to do this in the foreseeable future, even if it sincerely intends to. The GOP has repeatedly promised to craft replacement legislation over the last seven years, and while a number of plans have been developed in varying degrees of specificity, there is nothing like consensus amongst the party's legislators or influential experts. The fact that the party has settled on the repeal and delay strategy is further proof that no consensus yet exists.

No consensus exists on legislation in large part because there is no consensus amongst the party or its expert class on what the basic goals of American health policy should be. Some Republicans have talked about increasing affordability and accessibility. Others have talked about reducing the size of government while making health care more responsive to market mechanisms.

Still others have talked about finding ways to keep Obamacare's preexisting conditions regulations in place, and to maintain coverage for those who currently have it under the law. This final group includes Donald Trump and senior members of his incoming administration. This week, for example, Trump adviser Kellyanne Conway stated that people who are currently covered under Obamacare would not lose coverage under any replacement plan, but provided no specifics as to how this would be accomplished. Republicans, with some exceptions, have no idea what their product is, or how to sell it.

Making big promises without providing operational specifics has long been critical to the GOP's strategy on health care, and it remains so now. When Vice President-elect Mike Pence spoke to Republicans earlier this week, he rallied them behind repeal and replace—yet offered no details about the strategy. As always, the details will come later, which usually means they never come at all.

Republicans, then, could be marching themselves into a quagmire, in which they have repealed Obamacare without actually repealing it, further wrecking or undermining the insurance market in the process, and thus leading to a political environment in which Republicans shoulder the blame, making further reforms even more politically difficult. The current GOP thinking about how to avoid this is to simply blame all the problems on the previous administration, but that's unlikely to work for very long, and the disruptions could easily last years.

Granted, not all Republicans are up for this plan: Most notably, Sen. Rand Paul (R-Kentucky) said earlier this week that the GOP should not repeal without a replacement at the ready. Because Republicans hold only a narrow majority in the Senate, the repeal-and-delay process can survive very few defections, which means that the positioning of every GOP Senator is important.

Trump himself is a wild card in this process. He trashed the health care law during the campaign, but he never really appeared to understand how it worked, and he sometimes seemed to want to replace it with provisions that were already in the law. This week, he weighed in to warn Republicans to "be careful" to make sure that "Dems own the failed ObamaCare disaster," seeming to recognize that the politics of repeal were risky for the GOP. So it's not clear how the image-obsessed president-elect will respond to the sort of political pressure he's likely to face during any sustained repeal push.

Still: What if, in some sort of late season plot twist (have 2016's writers been fired?), Republicans did manage to coalesce around a plan in some reasonably speedy fashion? The most likely scenario under which that would happen would involve uniting behind something that looked roughly like the Obamacare replacement framework released by House Republicans earlier this year. The plan (which does not yet have a legislative form) has some virtues, such as the way it expands Health Savings Accounts. But as Cato's Michael Cannon wrote earlier this year, that plan essentially replicates key elements of Obamacare, including a system of refundable health insurance tax credits for lower income individuals who don't qualify for another government health plan. This would preserve much of Obamacare's spending, as well as creating a de facto individual mandate, in which those who purchase insurance benefit from a tax break, and those who choose not to are effectively penalized. (The current mandate, thanks to the Supreme Court, is a "tax penalty.") The GOP plan would also preserve modified versions of the law's major insurance regulations, and, as Cannon notes, would do so in ways that might function even less well than Obamacare does.

There is precedent for this sort of pseudo-opposition to the law: As governor of Indiana, Mike Pence, who is now Trump's liaison to Congress, claimed opposition to the federal health law, but expanded Medicaid under its auspices, even while claiming not to be expanding the program. His Medicaid expansion was essentially a deal brokered with health industry lobbyists to funnel federal money to the state's hospitals that he then described as a "market-based" health reform.

So even if Republicans did, somehow, manage to repeal and replace Obamacare, they might well end up with a plan that mirrors the law's major provisions—replacing Obamacare with a flawed but more GOP-friendly version of, well, Obamacare, which may or may not be much improvement over the original. At that point, why bother? (Indeed, there is already informed speculation that Republicans could simply end up agreeing to modify the law, creating a kind of Obamacare Lite, rather than fully repealing and replacing it.)

Republicans have talked about repealing and replacing Obamacare for years, but it's not clear that many of them ever thought much about how they would do so or what the consequences might be. At this point, it's enough to make you wonder whether the GOP really wants to repeal and replace Obamacare—or simply say they did.

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  1. To understand why, it helps to understand a bit about Senate procedure. Although Republicans have a majority in the Senate, they lack the 60 votes needed to overcome a filibuster. This means that a repeal bill can only be passed as part of a process known as reconciliation, which allows certain bills to move through the Senate on a simple majority vote. Thanks to a somewhat obscure requirement known as the Byrd Rule, however, reconciliation can only be used on provisions that are directly relevant to the budget.

    Wonderful lecture, but it ignores the fact that the entirety of Obamacare was passed by the Senate under reconciliation rules. Whatever was in the law was claimed by Democrats to be related to the budget. So repealing it in its entirety can be done through reconciliation too.

    1. wasn’t it just a short time ago that some Senate Dems were looking back on their change to the filibuster rule as not their best move.

    2. Did you even read the whole article? Specifically, this part:

      “However, Michael Cannon of the Cato Institute and Paul Winfree of the Heritage Foundation have made a strong argument that the insurance regulations could be repealed through reconciliation as well, because, as the Obama administration has argued in court, those regulations are inextricably linked to the rest of the law. So far, though, Republicans in Congress have shown no interest in pursuing this argument.”

    3. I don’t think that’s true. The PPACA was passed through normal procedures, but it wasn’t the law the democrats actually wanted because they couldn’t get it through conference and revoted on before Kennedy died. So instead the Senate then passed a second law, called the Health Care and Education Reconciliation Act of 2010, using reconciliation, that amended the PPACA.

  2. Pres. Obama says problem with Obamacare is that it didn’t go far enough.

    *in his current interview with Ezra Klein.

    Far enough in what way? I hate to ask.

    1. Turns out, the plan really does need Death Panels.

  3. I never understood the “and replace” part.

    Just repeal.

    Yeah, sure there are some changes that could be made, but not as a replacement for ACA, but just a fix to the screwed up system of health insurance that existed prior to the ACA.

  4. My advice to Republicans: Just do whatever Rand Paul tells you to do. Really it’s that simple.

    1. Why am I agreeing with the other AM on something?

  5. Stop pretending you believe in limited government and free markets, Macadoodle.

    By the way, just what the hell exactly are your credentials to be a “health care expert” anyway? Seriously. Where did you graduate from college? What was your degree in? Did you get any schooling beyond that? Just how many years of experience do you have working in the health care industry, and exactly what were you doing during that time? What scholarly studies have you done and had published in the arena that you can point us all to?

    1. Don’t get drunk and overdose on oxy, DD. Your life still has a purpose. We’ll figure it out together, I promise. 🙂

  6. The last thing the GOP should do is let the filibuster (which is nothing more than an accommodation of the minority by the majority) keep them from passing the bill they want to pass.

    The GOP has 3 choices: (1) do nothing because they can’t draw Democratic support, in which case the GOP would be rightfully mocked, (2) pass what they can withing the constraints of the filibuster, which would result in a huge mess for which the GOP would rightfully take the blame (you don’t get off the hook by crying that the Democrats wouldn’t let them do something else), or (3) get rid of the filibuster altogether and pass the bill they want to pass, and then take the credit if it works or the blame if it doesn’t.

    I vote for the 3rd option.

    1. Filibuster isn’t even an issue. 0-care was passed under reconciliation so it can be repealed under reconciliation.

      Claiming that repealing under reconciliation isn’t legitimate is a Democrat talking point. Funny how it wound up in Suderman’s article.

    2. I caught a clip of some Democrat warning the Republicans not to pass a bill with zero Democrat support because that would be bad.

      1. Haha, classic.

  7. The problem with repealing the mandate and subsidies but leaving those regulations in place is that doing so would decimate the individual market for insurance.

    Good. Good.

    My sweet Christ, if we can get anything across to these people, let it be this. Decimating the market for insurance, even and especially in this manner, is a good thing. The system is sick, unsustainable, and the problem will not get better because we prop it up at massive costs in fiat and liberty.

    Let the fucker blow.

    1. killing it by regulation is insane. There is nothing in principle wrong with medical insurance. It is a perfectly rational way for the market to deal with health care costs. The only reason the individual market would crash is because thanks to Obama care government regulation has more or less outlawed selling anything but a government mandated bundle of coverage rather than individual bundles that fit each consumer’s need.

      1. There is nothing in principle wrong with medical insurance.

        Sure. And if we had any medical insurance in America, that would be lovely.

        We don’t. It’s not insurance, and it’s doomed to fail no matter what we do. Pick your pain. Not feeling any is not one of the options.

        1. We have lots of medical insurance. You can buy insurance for anything you want. You can even buy insurance to cover expenses that are fixed. Where the hell did people get the idea that you can’t buy insurance to cover routine things? You sure as hell can. It just costs more.

          1. Where the hell did people get the idea that you can’t buy insurance to cover routine things?

            You can call that insurance all you want, but it’s not.

            1. Yes it is. All you need for something to be “insurance” is a risk and a cost that can be quantified. That is it. The amount or frequency of the risk and the cost don’t matter.

              Moreover, if there are routine things that the insurance company feels are worth the cost of paying for because they reduce their long term risk in insuring you, it is perfectly rational for them to pay for those things.

              What the hell do you think insurance is?

              1. Somebody may be willing to sell it to you as an insurance package, but you’re describing a subscription service. And, as you note, it’s going to cost accordingly.

                Cato interviewed a guy recently who discussed a healthcare subscription service that ties fairly routine procedures (physicals, blood work, mammograms/prostate exams, etc) with a HDHP and in some cases HSAs. The programs qualify under the ACA mandate restrictions and are proving more affordable than exchange plans.

                  1. That subscription service is a form of insurance. And there is nothing wrong with such a service provided that the demand for it isn’t being driven by some government regulation.

                    The subscription service is insuring you against future cost increases. It is still insurance.

                    1. We could argue all day (apparently some of you are willing) about what we call it, but healthcare “insurance” as it’s currently contrived is much different than other types of insurance. Most everyone pays to have their oil changed on an “as needed” basis. We pay to have the car washed similarly. When we need new tires, we have to shop around to get them at a good price, according to the quality and durability desired, right?

                      That’s how healthcare should be. We need insurance plans that cover catastrophic healthcare, but we ought to pay outright when we have sore throat, or incur the cost of childbirth and delivery. Doing so would bring the costs way, way, WAY, WAY down. There are many other changes to the healthcare system which would lower costs. Just a few here: (1) allow reimportation of prescription drugs, (2) get rid of the need for a doctor to “prescribe” the drug in the first place, (3) end siting and certificates of need approval for healthcare facilities, (4) recognize all healthcare degrees from anywhere, worldwide and (5) end healthcare licensing. (6) allow unused HSA funds to be passed (tax free) to future generations.

                      There are many more cost lowering ideas. Basically, just get government out of healthcare.

          2. I have big tits, a loud voice and can kick higher than my head. That doesn’t make me a Dallas Cowboys cheerleader, John.

            There are products out there to cover routine maintenance, expected events and fixed costs. They’re not insurance and we do ourselves no favors by pretending, that’s all.

            1. There are products out there to cover routine maintenance, expected events and fixed costs.

              The fuck they are not. No future cost is truly fixed. There is always a chance that the cost of something will go up or down between now and the time that is incurred. Agreeing to cover an anticipated cost at a fixed price, is nothing but insuring against a future price increase.

              Before you start talking about what is and is not insurance, do yourself a favor and figure out what the term means other than “shit I don’t think people should be able to insure for”.

              1. And we were doing so well, too.

                1. If you are going to talk shit, back it up. Explain what you thin insurance is. Then lets talk about what does and does not fit that definition.

              2. Firm offers are now insurance? Contracts FAIL.

                Insuring “against” routine things isn’t possible, John. This is one of your worse hobbyhorses.

                1. Even if what you are contending is true (which I am not convince of in the slightest), what do you think is the correct way for the insurance market to look like? That they only sell a product, insurance, that matches your description?

                  I don’t understand how that’s even possible. The only way I could fathom that even happening is if the government declared that selling health care subscription services are illegal….and that’s utterly idiotic and anti-market, to say the least.

                  Fact of the matter is, people want your so-called subscription services. And if there’s a demand, a company is going to try and meet that demand. Some kind of comprehensive health coverage insurance package available for sale, and defining health care, is an inevitability of private health care markets.

          3. And that is called ASSURANCE, John, not insurance. I buy car insurance to help pay for accidents. I can (but don’t) buy car ASSURANCE that will help cover the cost normal break down parts (transmission, blown header, etc.). In American society, we currently health assurance, but still call it insurance.

            1. nd that is called ASSURANCE, John, not insurance. I buy car insurance to help pay for accidents. I can (but don’t) buy car ASSURANCE that will help cover the cost normal break down parts

              Yes you do. It is called a warranty. You get them on every new car and the cost of that insurance is priced into your car. All a warranty is is insurance against breakdowns.

              There is no “assurance” versus “insurance”. It is all insurance.

              1. Def 2 below can cover a warranty…but its a little silly term-age.

              2. Your stubborn ignorance is only reassuring to fools who don’t understand words.

                Are you going to call Buy One Get One deals INSURANCE because the price of the item might change?

                Go find a dictionary. Oh wait, that would require reading comprehension.

                1. Are you going to call Buy One Get One deals INSURANCE because the price of the item might change?

                  Sure, right after you get a dictionary and look up derivatives and futures. Do you try to be this stupid? How is that someone could be so fucking thick that they can’t understand this?

            2. in?sur?ance
              in?SHo?or?ns/Submit
              noun
              1.
              a practice or arrangement by which a company or government agency provides a guarantee of compensation for specified loss, damage, illness, or death in return for payment of a premium.
              “many new borrowers take out insurance against unemployment or sickness”
              synonyms: indemnity, indemnification, assurance, (financial) protection, security, coverage
              “insurance for his new car”
              2.
              a thing providing protection against a possible eventuality.
              “adherence to high personal standards of conduct is excellent insurance against personal problems”
              synonyms: protection, defense, safeguard, security, hedge, precaution, provision, surety; More

              …i think your a mook….

              1. SomeGuy,

                You can define a word however you want. Whether this or that is really “insurance” is a pretty meaningless semantic debate. What isn’t meaningless is the stupid idea that people buying insurance or whatever you want to call it is a problem. No. Assuming the market isn’t being warped by a regulation, buying insurance for even the most basic and cheap things is perfectly rational an in a person’s best interests sometimes. If it wasn’t, they wouldn’t be buying it.

                Health care costs more than it should because the government has regulated it in ways that make it cost more than it should. It is really that simple. Yet, someone a lot of people who should know better have convinced themselves that the evils of medical insurance have also contributed to this. It is gold plated retard.

                1. I was agreeing with you that the other guy is a mook john. We offer insurance here not assurance

              2. Sorry to stick my nose in this, but SomeGuy… by your own definition above, you kind of proved John’s point.

                ” practice or arrangement by which a company or government agency provides a guarantee of compensation for specified loss,..”

                I’ve seen these insurance schemes, which you are calling Assurance, where normal maintenance things are covered for my car, such as tires, glass, even stains on interior cloth. They call it insurance and it’s expensive. They’re betting you’ll need less than the premiums you pay and your’re betting you’ll need more. That’s about all Insurance is. Betting against each other.

      2. as you know, it’s not the principle but the practice that is a problem. A huge one. Oddly, the one flaw that no one seems to point out within O-care is how it treats individuals as wholly interchangeable widgets, as if the 60-year old single/couple is just the same and has the same insurance needs/wants as the 30-year old(s).

        1. The whole scheme, such as they had one, was to force people who had no need for certain kinds of coverages to buy such coverages and lower the cost of people who did. The problem with that idea was that you could do it with one or two coverages. But they did it with like 20 different things. So everyone got screwed. Even if you benefited from your neighbor having to pay for that mental health coverage he didn’t need, it didn’t help because you were screwed paying for his birth control coverage.

    2. So… single payer?

  8. If there is any question about whether a provision passes the Byrd Rule or not, the Senate parliamentarian makes the call.

    Wrong.

    The definition of what constitutes “extraneous matter” is set forth in the Budget Act; however, the term remains subject to considerable interpretation by the presiding officer (who relies on the Senate Parliamentarian). The Byrd rule is enforced when a Senator raises a point of order during consideration of a reconciliation bill or conference report. If the point of order is sustained, the offending title, provision or amendment is deemed stricken unless its proponent can muster a 3/5 (60) Senate majority vote to waive the rule.

    The parliamentarian’s role is merely advisory. It is the presiding officer (the VP or a senator from the majority party) who makes the decision.

  9. Based on Sudermans predictive track record it sounds like this plan will repeal and replace obamacare

    1. ROFLMAO.

  10. Don’t you get it? Republicans don’t have a comprehensive plan to provide free unlimited health care to everyone. That’s just irresponsible.

    1. Yeah, why a libertarian would fault a policy for insufficient central planning is beyond me.

    2. They are either not a libertarian or they are so steeped in the media’s leftist conventional wisdom that they do not recognize they are making an authoritarian argument.

      1. Suderweigel is not in any way, share, or form a libertarian. He’s not even “libertarian-ish”.

      2. A little of column A, a little of column B.

        1. What ever happened to those family dinners? They seemed to go out shortly after Cantonese ceased to be the only Chinese food.

  11. “The current Republican plan, as described by GOP aides to Philip Klein of The Washington Examiner, is to repeal the law now, but leave it in place for a transition period of somewhere between two and four years while they work out a replacement, which in theory would come later this year, and might be passed in pieces rather than as a single bill.”

    Let’s not miss the forest for the trees.

    The real reason you can’t replace ObamaCare at the same time or before you repeal it is because doing so would make repealing ObamaCare predicated on what to replace it with.

    If and when repeal of ObamaCare gets bogged down over the questions conflicting interests will bring to bear over the question of what regulations to replace it with–ObamaCare might never be repealed.

    We must repeal ObamaCare first for the same reason that Cortez scuttled his ships as soon as he arrived in the New World. In order to herd the cats forward, there must be no way back.

    1. If they cut subsidies to a huge number of current ACA plans, but can’t undo the regulations which made them require subsidies in the first place, Republicans are going to get hammered in the midterms and Dems will have another bite at the single-payer apple.

      1. Yeah, they have to do it in the next 100 days.

        The point is, if they don’t do it in the next 100 days, it will probably never get done.

        We’ll end up waiting around for them to repeal ObamaCare someday–like we wait for them to repeal Medicaid.

        1. And either reversing Ryan on the risk corridor payments, or watching the insurance market spiral into the drink. I know which one I have my money on.

          1. They’ll spend the money, right?

            It’s always going to be easier to spend the money.

            1. Of course they will. Kick the can a little further.

    2. I don’t think given the reality of Democratic opposition, the strategy is a bad one. If you try to do it all at once, the Democrats will make the debate about the alternatives and the need to repeal it will get lost. The only way to repeal it is to repeal it and then debate what to replace it with later.

      1. If you make repeal predicated on new regulation, everybody from the feminists, who want free birth control, to the nuns, who don’t want to provide it to their employees, are going to support or oppose repeal–based on the new regulations.

        And that’s just two examples.

        HillaryCare died that way.

        Everybody, including Suderman, thought ObamaCare wouldn’t pass–because it was so unpopular–largely because of the nature of so many of those regulations.

        People will oppose regulation because of what it doesn’t address at all. It should have addressed x, y, and z, so I oppose it!

        If you wait for the regulations to replace it with, it will never get done.

        Imagine if FDR had waited to declare war on Japan until Congress settled on a battle plan. That isn’t the way things get done.

  12. At this point, if all they manage to accomplish is repealing the individual mandate, that will be enough to satisfy me. The whole thing is an abomination of course, but the individual mandate is by far the most offensive part.

    1. Repealing the individual mandate while keeping community rating (ie must cover preexisting conditions) would pretty much immediately destroy the private insurance industry.

      1. Not necessarily. Employer-provided insurance also requires the coverage of pre-existing conditions (sometimes with a delay) and it hasn’t destroyed employer-provided insurance.

        1. Those providers insulate themselves from facilities that provide care to Medicare and Medicaid patients through various means.

          Both HMOs and PPOs through employer healthcare plans are vigilant about making you go to a preferred provider for that reason.

          The other thing about employer provided plans it that they’re effectively part of your pay. These are productive people taking care of each others’ preexisting conditions. That doesn’t necessarily translate to people who are buying health insurance as individuals.

          The labor force participation rate is always somewhere in the 65% range.

          When former employees are eligible for COBRA, a very small percentage of them use it–because what employers pay for insurance is so much more than people realize. The system for gainfully employed people is broken by preexisting conditions I’d say mostly because the people in the system are gainfully employed and the insurers are protecting themselves from Medicare and Medicaid patients within that system.

          When you look at the system nationally, including Medicare and Medicaid patients and people who maybe aren’t gainfully employed, preexisting conditions become a bigger issue.

          That being said, excluding people with preexisting conditions is probably politically infeasible at this point.

          1. “The system for gainfully employed people is [not] broken by preexisting conditions I’d say mostly because . . . ”

            Fixed!

      2. I am not aware of an actual prohibition against selling plans that do not cover pre-existing conditions. My understanding is that Obamacare did not recognize those sorts of plans as “acceptable.”

        So without a mandate to purchase an Obamacare compliant plan the insurance companies could again offer non-rated plans. Including ones that do not cover, or limit coverage of pre-existing conditions.

        1. The ACA states that any insurance company that “offers” coverage must accept all comers. Section 2702.

    2. That’s a principled stand, and I’m sympathetic to that.

      One of the so called “problems” with ObamaCare (why it didn’t work even as the progressives had hoped) is that the individual mandate is insufficient to drive healthy, young people to cover the losses sustained by providers for dealing with Medicaid patients and the losses suffered by insurers covering costly sick patients on the exchanges.

      Just because the individual mandate isn’t strong enough to sustain the system doesn’t mean pulling the plug on the individual mandate wouldn’t break the system. I think the Republicans understand that, and they’re reluctant to be the guys standing around with empty gas cans and matches after the whole system burns down.

      On the other hand, they may have to start the fire to get the support necessary to build something else.

      Sometimes, the best thing to do is something really, really stupid.

      1. Just because the individual mandate isn’t strong enough to sustain the system doesn’t mean pulling the plug on the individual mandate wouldn’t break the system.

        In fact it means the opposite. It means pulling the mandate would have no significant effect one way or another. If it did, the system wouldn’t be failing.

        The system is in a death spiral because the regulations have made insurance unaffordable and unattractive to everyone but the sick. The choices are get rid of the regulations or make the mandate draconian enough that the healthy are forced to take a bad deal to avoid violating the mandate. It is really that simple.

        1. And the Roberts ruling said that the mandate wasn’t allowed to rise to draconian level, or then it wouldn’t be a tax.

        2. That’s not quite true; there’s failing and there’s failing. If the mandate’s effect would work by degree. It’s not like everyone in the country is either very sick and must have coverage, or not sick at all and is completely uninterested in coverage. The mandate’s effect is a sliding scale – as it gets more punitive, more people would find it worth it to just buy insurance, and bringing the entire system closer to 1) insuring everyone, and 2) being relatively stable.

          Conversely, as the mandate weakens, more people will find it less worth it to buy coverage, weakening the insurance pool, and speeding up the death spiral.

          As it stands now, the system is certainly not stable but it’s not in free-fall either.

  13. The Suderman Shuffle*. Why am I surprised?

    * The Suderman Shuffle refers to the pattern of saying that the GOP doesn’t really mean they want to repeal some policy followed by insisting that repeal isn’t real because it doesn’t replace the policy with equally centralized planning.

    1. He’s been living off this one schtick for about eight years now, too.

    2. Yep he is an interesting “libertarian”. He blocked me on twitter for asking too many questions on his Trump articles. He obviously has a serious problem with republicans (which I understand), but gives the democrats a pass (unforgivable in my opinion). Any suggestion that he does this is ignored.

      Overall I think Reason’s writers inordinately come from the “left-libertarian” wing of the movement. While this is a legitimate point of view, it would do the Reason foundation a real service to add more balance. I would be happy if they hired one or more Kevin Williamson or a David Harsanyi types to the team. Due to their leftward move, I declined to contribute to their fundraising efforts this year. I struggled with this choice since I have been a subscriber and benefactor of Reason’s for almost two decades, but they have gone a little bit too far. They are still my favorite publication, I am starting to spend more time on other sites.

      1. Personally, I think the Mises Institute runs better articles and does more to advance the movement with their programs for college students.

  14. No consensus exists on legislation in large part because there is no consensus amongst the party or its expert class on what the basic goals of American health policy should be.

    There’s your trouble.

    Central planning doesn’t work. Never has, never will.

    1. We’ve Venezuelized our health care industry, and stand around mystified as to why everything’s expensive as fuck and crashing down around our ears.

      We just need better experts at centrally planned markets, that’s all. And fewer wreckers and kulaks.

      1. on what the basic goals of American health policy should be.

        And the heart of that is the above quote. The entire idea that there could be overall goals for the healthcare of 300 million people. What is good health care to you is not necessarily good health care or the right result to me. There no “goals”. There are only individuals with preferences and interests.

        1. This doesn’t really make sense to me. Even if your ideal version of health care is for government to be completely severed from it, and every aspect from care to pharmaceuticals to R & D is driven by private entities who are loyal to shareholders, that’s still a goal. It’s still a system with a deliberate methodology. And to the degree that private business do business within a country that has rules, lawmakers will have to take actions to make this system a reality.

    2. Brooks really has nailed it.

      But a think tank is a kind of “central planning lite” so they tend to forget basic truths when it would harm their scam.

  15. Something Suderman doesn’t mention during his hit job, but is a concern. Repealing 0-care in its entirety means that insurers will once again be able to refuse coverage on the basis of preexisting conditions. That’s going to be extremely bad PR. And there is no simple fix to the system that would preserve “community rating” as it’s called.

    1. his hit job

      oh, come on.

      they don’t call republicans “the Stupid Party” for nothing. all he’s doing is speculating that they’ll make a bad thing worse. its certainly *possible*. but i don’t know why anyone would get their feels-bruised over it.

    2. That’s going to be extremely bad PR.
      Maybe but shouldn’t that be an issue for insurers to confront? And the whole pre-existing thing has blown so out of proportion that it’s unrecognizable. Carriers had waiting periods for new customers with no track record of credible coverage. This talking point of people being summarily turned away in droves is just that, a talking point.

    3. Sure it might be bad PR. But tough shit. It has to be done. You can’t have an insurance system that lets people wait until they are sick to buy it.

  16. What’s so hard about providing health insurance without screening for preexisting conditions, not raising rates or having an individual mandate? Republicans just not be creative enough.

    1. Other than the phony concern about rising deficits and the $20 trillion debt ballooning?

      Nothing.

  17. Since when did the POTUS let Congress get in the way of changing regulations?

    Trump can just tweet a new rule and off we go.

  18. The fundamentals of Obamacare were a Republican idea first. Its roots are in their response to Clinton’s health care reform package in the 90s and it’s just a bigger version of Obamacare. It should surprise precisely no one they aren’t actually that keen on repealing it.

    I’ve said all along that repeal and replace is going to give you something nearly identical with a new name.

    1. bigger version of Romneycare that is…

    2. Krugman will then talk about how terrible it is even if same

      1. No, he’ll point out that the GOP basically stole their idea back. and ran up the debt.

        Obamacare would have passed easily with just about the same provisions had it been accompanied by a debt incurring tax cut.

        Which is what DrumpfCare will be. If he is smart, and he is smart.

  19. Some Republicans have talked about increasing affordability and accessibility.
    More free stuff, as long as we borrow and spend as opposed to what the Democrats prefer: tax and spend.

    Others have talked about reducing the size of government while making health care more responsive to market mechanisms.
    No, they have merely regurgitated punchlines.

    1. “More free stuff…”

      Why are you not paying $40 for a pizza?

      This may come as a surprise to you, but “competition” is one way of keeping things affordable.

      Not everything needs to be done by Government. In fact, very few things should be done by Government.

      The Government is making it very difficult to innovate new technology, drugs, and medical procedures. Do you think that has an impact on pricing?

  20. It is a tactically foolish course of action with numerous potential pitfalls and problems?not least of which is that it does not even repeal all of Obamacare.

    Say what you will of McConnell. he is a smart tactician. Repeal and [mumble mumble] it was, for years; now it is repeal and delay.

    Separating the two is smart politics. Once Obamacare is repealed, they can take a victory lap. No one will be affected, because nothing will be in effect other than a repeal signed by Drumpf with great fanfare.

    The replace will be done quietly, slowly tossing millions out in low key pieces of legislation paired with more high visibility legislative items: anti-abortion judge replacing Scalia, a wall being built, some deportations, a tax cut, …

  21. The tactic of repeal, delay, and force a replacement makes perfect sense since a) democrats will not vote for a replacement plan until they have to and b) a top-down plan that does not incorporate democrat, Republican, public, private, and whatever input will fail just like Obamacare and Hillarycare.

    Repeal must happen since the ACA simply does not work and will destroy the Individual insurance market in the next few years. Yes, Insurers will have to be bailed out to remain in these markets during the delay phase. The truth is that THEY DESERVE THE BAILOUTS. The ACA was forced down their throats and regulation changes have effected the industry much like Vader did Calrissian’s cloud city, i.e., the deal kept getting worse all the time. Simply put, insurers have lost billions on the ACA.

    Repeal and delay will happen right away, and then work on the replacement process (which should wrap up in the summer of 2018) will begin. The republicans will leverage the necessary eight votes to replace the ACA from incumbent Senate democrats. The hard left of the democratic party (i.e., Schumer, Fauxahontas, Pelosi, etc.) will never ever vote for a replacement plan. But there will be enough democrats from red or purple states that can be brought into line. (1/2)

    1. As to there not being one Republican plan, so what? All the major Rep plans (Price, Ryan, Sessions/Cassidy, AEI, and Roy) have very similar themes that will be easily reconciled in a final bill:
      1) less restrictive rating rules
      2) no coverage mandates (IND or ER)
      3) less restrictive benefit mandates (bye bye EHBs and hello lifetime maximums)
      3) revised guaranteed issue (i.e., continuous coverage)
      4) means-tested defined contribution (the ACA used defined benefit subsidies) deductible tax credits for those not able or willing to obtain coverage elsewhere
      5) high risk pools and premium stabilization mechanisms (reinsurance and risk adjustment) that are non-zero-sum
      6) additional opportunities to pool individuals to create group coverage (the ACA took these away)
      7) the expanded use of HSAs to encourage consumerism
      8) medical liability reform (this is much bigger than people think)
      9) caps of the tax-favored status of employer-sponsored insurance

      Many or all of those items will make the final bill. Also expect Medicaid reform and potentially the conversion of medicare to a premium support plan. (2/2)

    2. Yes, Insurers will have to be bailed out to remain in these markets during the delay phase. The truth is that THEY DESERVE THE BAILOUTS. The ACA was forced down their throats and regulation changes have effected the industry much like Vader did Calrissian’s cloud city, i.e., the deal kept getting worse all the time. Simply put, insurers have lost billions on the ACA.

      Well, now, wait a minute: How much did they have in stranded capital? AFAICT, the insurance biz is one of the most liquid imaginable. Why didn’t they just liquidate?

      1. You expect high regulated and large insurance companies to just drop their Individual and Small Group business? They are doing it now, but they originally wanted to succeed in the new markets to maintain their revenues and profitability. If you are an insurer that covers 500,000 people in your state’s individual market, you don’t give up that business easily. The fact that they are now attests to how bad the deal has become. But remember the initial deal was different. There were the 3Rs (risk adjustment, reinsurance, and risk corridors), the individual mandate, and no grand-mothering. All of that changed, some of it at the last moment in 2013 (months after the insurers had finalized their 2014 rates and plans were already being sold). Resources had already been committed, plans discontinued, companies reorganized. When insurers could finally start pricing these plans appropriately (i.e., 2016), the first set of rate increases met huge resistance. It was only the 2017 rates that got through the point that these markets were in trouble. Nobody saw this coming because the law was always being tampered with.

      2. You expect high regulated and large insurance companies to just drop their Individual and Small Group business? They are doing it now, but they originally wanted to succeed in the new markets to maintain their revenues and profitability. If you are an insurer that covers 500,000 people in your state’s individual market, you don’t give up that business easily. The fact that they are now attests to how bad the deal has become. But remember the initial deal was different. There were the 3Rs (risk adjustment, reinsurance, and risk corridors), the individual mandate, and no grand-mothering. All of that changed, some of it at the last moment in 2013 (months after the insurers had finalized their 2014 rates and plans were already being sold). Resources had already been committed, plans discontinued, companies reorganized. When insurers could finally start pricing these plans appropriately (i.e., 2016), the first set of rate increases met huge resistance. It was only the 2017 rates that got through the point that these markets were in trouble. Nobody saw this coming because the law was always being tampered with.

  22. Darn. I should have realized that the Republicans would just make a bad situation worse.

  23. I heard Rand Paul on the radio the other day talking about this.

    His ideas and plan sounded very reasonable. I just hope the Congress and Trump listen to him.

  24. With Obamacare set to expire in just a few years, and no clear sense of what (if anything) will proceed it,

    Succeed it? Precede its repeal? How they will proceed if…?

  25. The problem with repealing the mandate and subsidies but leaving those regulations in place is that doing so would decimate the individual market for insurance.

    This makes me support it even more.

    If you understand how insurance is supposed to work – rather than how bastardized insurance has operated for the last 40 years – you would understand why this is a good thing.

    Insurance only operates effectively as a mutual society. A mutual society has limited membership in order to effectively manage its risk pool. Manage it well and premiums go down or profits are distributed to the members. Manage it badly, and the society dissolves as members look to join other mutual societies.

    Yes, that means the highest risk people – and/or the people who demand more minor things be covered – are limited to joining mutual societies with the highest premiums or choose to ignore insurance and pay out of pocket if and when they need something. That is how free markets work.

    It also means that a lot of employers would drop health insurance entirely and the employees would get more money in return – for which the individual employee could either go shopping for a good mutual society or shop for hookers and blow.

    1. I retired at 52. So for years I was grouped in with the highest risk pools even though I would go years without seeing a doctor. It cost $16 thousand dollars a year. Suddenly when Obamacare arrived I was in a very large pool and my health care insurance costs dropped to $5 thousand dollars a year. Collapsing the risk pools is a great thing.

      So are you advocating for the insurance industry to be able to cancel expensive clients to preserve profits? Doesn’t that hang a 20 year customer out to dry and die?

      1. None of this makes a lick of sense.

        I was in a very large pool

        The SIZE of the pool is 1000% meaningless. It’s the RISK of the pool … which Obamacare made WORSE. Do you EVER follow the news? It added lots of high risk people … but FAILED to enroll enough low-risk ones offset the high risk ones.

        If your personal premiums declined — your claimed AMOUNT is laughable — it’s because YOU get the subsidies. Pre-Obamacare, your age group averaged 5x higher premiums than the youngest group. Obamacare MANDATED no more than 3%. Do the math. THAT is what increased premiums so much on the young. So, then they subsidize those younger ones … to pay for YOUR mandated cut.

        The first fuckup is that younger, poorer Americans are literally subsidizing older and wealthier ones, like yourself. So we have progressives robbing the poor to subsidize the rich!!! Now follow the shell game. I’ll go slowly,

        YOU get a mandated 40% discount. This requires higher premiums on YOUR SON. So he gets a subsidy to pay those higher premiums …. THINK .. He gets a subsidy to pay for YOUR discount. … which means the subsidy benefits YOU. Yep, Obamacare subsidies pay for mandated discounts on our oldest — and wealthiest Americans. Guess which ages group votes at the highest rate, So, in fact, you’re sucking on the teat. Political health care.

        Sucker,

    2. The problem with repealing the mandate and subsidies but leaving those regulations in place is that doing so would decimate the individual market for insurance.

      This makes me support it even more.

      You don’t understand the issue. Your description of free markets is both poor and irrelevant.

      If you understand how insurance is supposed to work

      When do you start? I’ll try to break it down for you..

      The “regulations” REQUIRE insuring the sickest people, which increases risk, The mandate offsets the sickest with low-risk healthies. The subsidies allow low-income healthies to further reduce risk. That’s why the mandate came from health insurers , who offered to pre-existing conditions, ONLY if there’s a mandate — for reasons explained here,

      As Peter noted, repealing the mandates and the subsidies will remove ONLY low-risk, force premiums increases MUCH worse than Obamacare, decimating the private market.

      The anticipated “mix” of sick and healthy failed with Obamacare, which is why premiums are skyrocketing. So the GOP would force premium higher. And you support millions of Americans getting screwed even worse by Republicans?

      One need not know how insurance works … not for this. Junior High math is all one needs.

  26. Well, duh, they have to pass it so we can find out what’s in it. That’s how healthcare laws work.

  27. Remarkably the percentage of US residents not covered by health care insurance is at an all time low. This is important because the cost of emergency room care is five times more than any other health care in this nation. And hospitals cannot refuse emergency room care to the indigent by law. Preventative care and coverage under a health care plan is much more efficient than emergency care. Obamacare actually decreases the overall percentage of the US GDP dedicated to health care costs. Just like taxes on tobacco decrease overall health care spending by reducing its use and the expense of treating stage 3 and 4 terminal lung cancer cases.

    1. Want to reduce the costs of emergency room visits? Repeal drug prohibition and demand is reduced. Most of the gunshots and overdoses would go away and you’d be left with mainly accidents, strokes, and heart attacks.

      1. Any proof behind your oh so bold statement? Thought not.

    2. “Obamacare actually decreases the overall percentage of the US GDP dedicated to health care costs.”

      If you believe that, I’ve got a bridge to sell you.

    3. No such thing as “preventative” care. Now preventive care on the other hand…

      1. No such thing as “preventative” care.

        Merriam-Webster says the word has been in use since the 17th century

  28. Here’s a thought: Repeal the parts that are undoubtedly fiscal, then have a separate bill to repeal the regs. If the Dems dare filibuster that in the senate, all those up for re-election will be defeated when it becomes obvious they’re the only reason nobody can buy insurance any more.

  29. A related thought I’ve had, why can’t we have tech schools for doctors? Why do doctors need pre-med?

    1. Perhaps because only the most intelligent applicants are accepted to med school and they spend on the average of six years there learning the craft. You are going to let a high school student specializing in shop to become a doctor? 60% of college students at four year universities cannot pass physiology 1 and 2. How important is physiology in a doctor’s work?

      1. I have two close friends that did med school in six years straight out of high school. One is an interventional radiologist, another is an allergist/immunologist. They are highly competent.

        We DO need more NPs and PAs managing primary care. Move physicians into specialty care and allow (less costly) providers do primary care & outreach.

    2. It’s part of the racket that’s college. Med schools used to take a fair number of non-college graduates.

      1. How long ago was that? 1915? Get real dude.

  30. Also, why is the filibuster now seen as the ultimate stopping power? Just let it run it’s course. Lots of laws that were eventually passed have been filibustered.

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  32. Republicans should just channel Pelosi and tell everyone that they have to pass it to know whats in it. hell it worked for the dems

  33. OT: just venting here….

    Someone told me that bartenders are “way overpaid”. The rest of the conversation basically boils down to this:
    Me: “How are they ‘overpaid’? What’s the ideal rate of pay, and how did you arrive at that number?”
    Him: (contemplative pause) “12 to 15 dollars per hour.”
    Me: “But how did you come up with those numbers? Did you just make them up on the spot?”
    Him: “No, that’s just what their skills are worth. I mean, anything they do can easily be replaced by a robot!”
    Me: “But the bar owners don’t mind paying the current wages, and the customers don’t mind paying the prices that reflect those wages, so what’s the problem here?”
    Him: “They’re just overpaid.”

    To think that someone can just come up with a number for what the wages for an entire occupation should be! To think that they can factor in the supply of labor, demand for that labor, the finances of bar owners, local cost of living, and all the other factors that go into determining a wage rate! To think that one person just has the right to impose a wage by force against the wishes of labor suppliers and labor buyers! To think that one person can determine when the time is right for something to be automated! To think that automation is always the best option regardless of the current cost of robots vs. human labor!

    I get incredible enjoyment out of studying economic issues and the Austrian perspective on those issues, but sometimes I get bummed out when I see what we’re up against.

  34. Republicans have been clueless on healthcare for decades, the same anti-gummint mentality that is stifling the libertarian movement. The biggest disaster by far is Medicare, where both Paul Ryan and Cato are pulling another con job, Medicare vouchers look like privatization to the goobers, because private insurers would increase competition ,… but in the wrong market! The insurance companies would be a costly and useless middleman between the government and providers. Can we say stucking fupid? The REAL market, providers, has had competition all along, but seniors have no skin in the game.

    So the self-proclaimed champion of free markets has the wrong market, and ignored 50 years of talking about … skin in the game. (sigh)

    Repeal the mandate and the heath insurers will face a dilemma. Cut the balls off the GOP and Cato, or find a new way to suck up to the GOP. Nobody recalls now, but Obama campaigned AGAINST a mandate in 2008 (great Johnson video in 2012!) So where did the mandate come from? The insurance industry. Obama had been elected but not yet in office. Their trade group said they’d accept per-existing conditions, but only with a mandate. So if the mandate disappears, the industry will either humiliate the Republicans, or the inevitable premium increases will be WORSE than Obamacare, adding to the GOP disaster suggested by Suderman.

    We ARE getting closer to killing off BOTH the liars party and the stupid party! Both total losers!

  35. first they vowed to repeal. now they vow to replace once millions of people were forced to participate with the threat of government violence against them and have now become dependent on it.

    this has NEVER been about healthcare, it has always been about federal government expansion for the looter class

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  37. Repeal the whole thing. “Replace” it with the free market.

    Sorry, 20 million people who would lose insurance. You can’t hold the other 300 million of us hostage anymore.

    Plus, you probably couldn’t afford the care anyway, as you probably had $800 monthly premiums and $8,000 deductibles.

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