Reason Podcast

Why the GOP's "Repeal and Replace" Bill (AHCA) Is *Worse* than Obamacare [Reason Podcast]

It locks in many of the worst elements of Obamacare while making actual market-friendly reforms next-to-impossible.

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In a new Reason Podcast, Reason's Peter Suderman tells Nick Gillespie why The American Health Care Act (AHCA) not only fails to really "repeal and replace" Obamcare but actually makes the system even worse.

Indeed, the AHCA, which passed by four votes on a strictly party-line vote, locks in Obamacare's system of tax subsidies and while it ends the loathsome individual mandate, it effectively replaces it with an equally ineffective and distortive penalty for failing to maintain constant coverage. The AHCA is also a disaster in terms of process: The GOP House majority rushed it through without waiting for the Congressional Budget Office (CBO) to score its costs and benefits. Taking a page from former Speaker Nancy Pelosi, Rep. Paul Ryan forced a vote despite a number of members saying they had not had time to read the lengthy legislation.

Suderman also explains the steps that need to be taken in order to start building a truly market-oriented health-care and medical-insurance system.

Produced by Ian Keyser.

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  1. while it ends the loathsome individual mandate, it effectively replaces it with an equally ineffective and distortive penalty for failing to maintain constant coverage.

    please explain what this penalty is. how can there be no mandate and a penalty for not buying insurance? that makes no sense. I hope you are not calling paying a higher premium for preexisting condition a penalty.

    1. anyone who has a lapse in their coverage of longer than 63 days in the prior year to pay their insurer a penalty equal to 30 percent of the premium of the individual or small group health plan they are purchasing.

      That’s the penalty. How can there be no mandate and a penalty for not buying insurance?
      You don’t have to buy insurance. You can pay out of pocket. You can’t just jump into the system when it’s convenient and bail when it’s not.

      1. Yeah, in a free market, the penalty for not paying premiums is you lose your coverage–and you probably can’t buy back in unless you do so at a higher rate. They don’t want people hopping in and out of coverage based on how sick they are at the time.

        The penalty is really to the insurers. They probably wouldn’t take these policy hoppers back if the government weren’t forcing them.

        And Suderman has written extensively on this topic!

        I want to say, “Who are you, and what have you done with the real Suderman?!”

        1. It’s like they’re picking bits & pieces of argument (which would fight each other to the death if they were ever together in a room) to make the GOP pols look bad. But they’d never do that, right?

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      2. It’s actually better than that in terms of getting closer to a free market. There is not a requirement for a 30% penalty. Insurers are simply allowed to charge it.

        1. But Suderman’s conflating that w the penaltax.

          Which are we “supposed” to be doing: crafting a system w long-term stability (out of one that’d already been unstable, though possibly less so), or getting partway across the chasm that must be crossed to get both greater stability & more liberty?

      3. You can’t just jump into the system when it’s convenient and bail when it’s not

        Meaning you can’t just purchase a product when it is of value to you and not purchase it when it is not – you gots to go buy a meal in the restaurant even if you aren’t hungry or pay extra later when you are ( I could give a much nastier example if pushed to it.) If there were any real competition in the insurance market place, they wouldn’t be able to get away with that kind of crap – and as long as the government has their hands in it and the politicians have their investment portfolios to protect, there won’t be any real competition. You didn’t really think that just because they’re Republicans that the fuckers were going to give the people a break, did you?

        1. This is silliness.

          You don’t get to wait to buy fire insurance until your house catches on fire–and there’s plenty of competition in the fire insurance markets.

          Insurance companies certainly shouldn’t be required to sell fire insurance to people whose homes have caught on fire.

          If the government required them to sell policies to people with burning homes anyway, is it really too much to ask that people who are allowed to buy insurance after their house catches on fire actually pay their premiums?

          Meanwhile, the fact that the government has crowded competition out of the market with regulation is not a good argument against deregulation. The government can’t deregulate the market because the market is too heavily regulated?

          Are you Tulpa?

      4. Is that still in the bill? My understanding was that in states that got waivers, insurers could charge people with preexisting conditons higher premiums.

        Which is effectively a repeal of the pre-existing conditions mandate.

        The surcharge is retarded but hey, we SHOULD try to death spiral all the states the don’t get waivers.
        Eventually all the states will get waivers because that’s the only way to keep their insurance markets alive.

    2. Thanks everyone. That’s what I thought. There is no mandate or penalty. Not even close to one. It sounds like there is still guaranteed issue. Suderman and Gillespie are lying because Trump called journalists lying assholes. I expect it from Suderman who just pretends to libertarianism but I thought Gillespie favored freedom. Probably ought to call the magazine emotion for the duration.

      1. I’m sorry to have to tell you this, but Gillespie is just as much of a lying shitbag faker as MacAdoodle is.

    1. I am all for separating libertarianism from racist shitbags like the author of that article and Vox Day.

      1. What is ur evidence?

        1. That Vox is either a rascist or a shitbag!? Evidence gammas. I WANT EVIDENCE.

    2. They call Gillespie “The Pope of Modern Libertarianism”.

      I doubt Gillespie would take that as a compliment.

      When Gillespie is at his best, I see him more as the Johnny Cash of Modern Libertarianism.

      https://www.youtube.com/watch?v=t51MHUENlAQ

      And I suspect he might take that as a compliment.

    3. It’s why they are no longer of any use to the Right.

      *cries self to sleep*

      1. Dont forgey going asleep alone

    4. Gillespie is an idiot andd so is anyone else who thinks he is a libertarian.

    5. France’s economic policies are a huge problems and do nothing but exacerbates their immigrant assimilation problem. Imagine a National economy run by the NY City school’s unions. Qualifications to get a job continually increase so that the people who already have them have less competition and can command higher wages. It is also extremely time consuming and expensive to fire anyone which dissuades businesses from hiring people in the first place.

      1. For young Frenchman and immigrants this equates to saying that no matter what you do or how hard you are willinh to work, unless you know somebody or have an in somewhere, get used to the ghetto ’cause that’s the only option you have here. Yes, we have ghettos and a welfare state here in the US, but if you want to succeed here, you can. We see assimulation here because it pays to do so.

  2. Fuck yes. Fuck you, Penguins.

  3. Big shocker that Block Yomomma’s dick-suckers don’t want to see their hero’s one significant piece of legislation get repealed.

    1. When’s the last time the House voted to cut Medicaid?

      It kills the individual mandate.

      How can it be a bad thing?

      CNN has a list up of preexisting conditions that the House plan won’t cover anymore.

      http://tinyurl.com/k23x4x2

      Did you know “pregnancy” was a preexisting condition under ObamaCare?

      Moral hazard anybody?

      Under the House plan, states will be allowed to make work a contingency for Medicaid eligibility.

      It’s like a libertarian Christmas in May!

      1. The one true libertarian Christmas is when the EBT cards don’t work. I celebrated the last time by going to 3 grocers and a Walmart, with a pocket full of cash and a full speedloader for the S&W 638 in my waistband. It was surprisingly civil. I’ve never seen so many crablegs in the seafood counter. If it lasted more than a partial day they would’ve had to mark down the lobsters.

        1. Stubborn Libertarian Myths, #1 in a Series
          Poor people use “food stamps” to load up on prime rib, lobster and caviar.

          1. DanO is actually somewhat correct, considering that 30% more food stamps are sold at a (typical) 50% discount for cash, which is then used to buy cigarettes, alcohol, drugs, and other non-food items.

            1. You can use ebt’s to buy beer at bars.

            2. Accuracy is next to godliness, even if the truth makes DanO’s case for Food Stamps much, much LESS tenable.

              So, thank you, DanO, for making everyone else see the light.

  4. “Indeed, the AHCA, which passed by four votes on a strictly party-line vote, locks in Obamacare’s system of tax subsidies and while it ends the loathsome individual mandate, it effectively replaces it with an equally ineffective and distortive penalty for failing to maintain constant coverage.”

    1) Once the ObamaCare Medicaid expansion dies in 2020, the subsidies end up functioning much like school vouchers–just for healthcare instead of private schools.

    Moving people from Medicaid into the private system is vastly superior to Medicaid for all sorts of libertarian reasons.

    2) The penalty for not maintaining coverage should be a total loss of coverage. That’s the way insurance works. If they’re letting people buy back in after failing to pay their premiums, that is no way comparable to the individual mandate–it isn’t even a penalty to the uninsured, really.

    For goodness’ sake, there should be consequences when people only pay premiums when they get sick. Suderman has written extensively about that problem in the past–why the sudden change of heart?

    Imagine if there were no consequences for not paying premiums. They have that in Canada and the UK. It’s called “nationalized healthcare”. Is that a libertarian solution now?

    Have you all lost your minds?

    1. Ken, when are you going to finally realize that these guys are nothing but stone cold liars?

      1. Block YoMomma!

  5. Peter, I have been following your arguments regarding this bill for the past several days, and, other than your point about the Cadillac Tax, I fail to see how this bill makes anything worse. Your argument against the premium penalty that would replace the individual mandate seems to revolve entirely around the idea that the individual mandate is more effective in getting people to sign up, and doesn’t really touch at all on the inherent evil of the individual mandate itself. In as much as this new penalty assessment fails to stop the adverse-selection death spiral, well, that’s not really a change from the status quo now, is it?

    I also don’t get the argument about how it “locks in place” Obamacare’s subsidies by replacing them with tax credits. First of all, assuming we are defining “locked in place” as something that is mandated by law, and can’t be changed without further act of legislation, well, are not the Obamacare subsidies currently already “locked in place” and would they not remain “locked in place” if this bill fails to change that? If so, how does the “locks in place” argument hold any water?

    Am I wrong about any of this? If so, please correct me.

    Otherwise, I’m so far with Ken Shultz on this.

  6. First time I’ve ever seen a partially exposed areola in the Moonie Times. Vive le France.

    1. “suspicious bag” — I larfed.

  7. Krauthammer is right, sad to say, we’ll see single payer in 10 years or less. Once people get hooked on free shit they’ll never go back, just like every other entitlement. I’m gonna laugh at my retired gov employee pro single payer buddy when he loses access to his doctors when they go cash only and he has to get in line with the rest of the plebes for VA lite.

  8. How is the penalty not a mandate?

  9. Obama won, government controls medicine, and the Trumpkins and libertarians are still too dense to acknowledge it.

    1. Um most of us here are painfully aware of the unfortunate fact that government controls medicine, largely thanks to Obama. But I’m glad you’re pleased about it. Enough of that trickle down free market fundamentalism, right?

      1. government controls medicine, largely thanks to Obama

        Holy shit, were you born yesterday? Government has controlled medicine since at least Medicare, something Republicans fought against at the time on principle. When was the last time you heard a Republican call for the abolition of Medicare? Of the FDA? Government-controlled medicine is a god that both Republicans and Democrats worship. They’re just arguing about the details.

        1. Re: DanO.,

          Government has controlled medicine since at least Medicare

          The logical progression derived from your initial statement (Obama won, government controls mwdicine) suggests that you’re making the argument that government control of medicine comes as the result of electing Obama as president. Did you thus make a mistake?

  10. What is rascist about days 16 points?

    U cowards just cant bring urselves to accept diversity + proximaty = war. See Rotherham. Seee the rape of Sweden.

  11. It real simple. 1 cant have libertarianism w/o the rule of law. They aint any libs in Norkland. Same reason here. Law 4 u and me, not for cops, any clinton. How many casualties do there have to be in bost cost of humanity and the thing u call reason b4 u figure it out? What if i told u, u can keep NAP and ur individual sovereignty? Do that sound so bad? Come to the dark side. The water water is fine.

    1. P.s. Nick is a fucking idiot. There is no Republic of limited, enumerated powers. There is no republic. And u pathetic fucks wont even fight to save ur own skin.

  12. I’m satisfied with the bill because the ability to get waivers for the requirement to cover pre-existing conditions at the same price (community rating) and the essential benefits list would in effect amount to a repeal of the core features of the ACA in states that sought waivers. Yes, there would be the high risk pools and such, but meh, it’s a small price to pay.

    What happens in the other states? Well, THOSE markets will be even worse than the ACA, but so what? This will just help to kill them off faster. They’ll all have death spirals and eventually everyone will have to get waivers. Pttbt. ACA dead. Technically still on the books, but moot.

  13. It locks in many of the worst elements of Obamacare while making actual market-friendly reforms next-to-impossible.

    It seems to me that the difficulties with getting anything passed show that it’s already next-to-impossible to make market-friendly reforms.

    1. If there were any more freedom in that bill, yeah, it wouldn’t have passed.

      Meanwhile, the bill gets rid of the individual mandate and sunsets the Medicaid expansion.

      We’ll still have the same congress next week. Theoretically, they could pass additional bills in the future. This doesn’t need to be the end of the conversation.

      It just needs to be a step in the right direction.

      And killing the individual mandate and the Medicaid expansion should have us all singing and dancing.

      https://www.youtube.com/watch?v=PHQLQ1Rc_Js

      1. I agree. I think it’s sad that reason writers tried to hide that in their articles.

      2. Cosmos can’t be pleased if doing so “normalizes TRUMP. See Mike Riggs on how awful it is that Trump is effectively killing the ONDCP/Drug Czar.

        1. It’s easier for me to think that they’ve been given a big sack of money by somebody to emphasize some libertarian positions over others. Certainly, there’s nothing unlibertarian about pitting themselves against the emperor. The appropriate place for libertarians is always in opposition to the emperor.

          It’s easier for me to think somebody gave them a bag of money than it is to think that they’ve all lost perspective–in the exact same way. I think the House bill is the most libertarian thing that’s happened at the federal level in a long time. I think it’s okay to hold that position–even though I’m no fan of Trump.

          I supported Obama when I thought he was right, too. It happened once! But no one’s ever accused me of being an Obama supporter.

          It’s easier for me to think someone gave them a bag of money, and they’re tailoring their message to assuage that big donor–whomever it is–but that doesn’t mean that’s what happened. Maybe they’d be making the same calls of their own initiative. Maybe it’s just that I can’t see it and I can’t get there. I can’t look at cutting Medicaid and eliminating the individual mandate and come to the conclusion that this bill makes things worse.

          I’ve changed my mind around here because of Reason staff arguments about some things over the years, but I haven’t seen anything persuasive on this issue. I don’t get it, and I’m a pretty smart guy.

          1. They’re liars, they’re liars, a hundred more times again, they’re liars.

  14. would not the libertarian position be to forgo health insurance and pay as you go? That is what I do. If we all did then the insurance companies would have to sell products that appealed to me. I will only buy when I can pick a policy that gives me the value for my dollar that I want. Get gov out of this.

  15. I’m 100% with Ken on this one. Yeah, this was not a libertarian health care bill. Not at all. But it simply would not have passed if it was one bit more libertarian. We will never get that libertarian bill until we elect some libertarians.

    What it is, though? A bill that destroys about half of the problem (if not more), and leaves the other half in place. That’s not great, but there’s not a quota on bills about health care. Putting this into effect would not lock out further improvements, and it certainly would not “lock in” any bad tax provisions that weren’t already locked in.

    It takes an absurd amount of spin to say that continuous coverage requirements decided by the companies and enforced by contract law is less free-market than an absolute requirement that everyone must own a consumer product, enforced by government and payable to government if you disobey.

    The ability for subsets of the country to option into deregulation at will has no possible negative effects on freedom.

    Setting up a new refundable tax credit is stupid, but every bit of Democratic caterwauling over the law indicates that the size of the welfare state is smaller with the tax credit than with the subsidies. Stupid is better than really stupid.

    1. Everything else about the bill is bad, but it’s not “worse” than Obamacare, it’s just Obamacare with a small slush fund set up to appease moderates, which is irrelevant in impact on freedom/spending relative to getting rid of the individual mandate and community rating.

  16. My tax plan. Not perfect, not strictly libertarian, but it does move the system towards a more market system. Remember, utopia and the overnight reversal of over a hundred years of government fingers in the healthcare sector is not an option.

    * Premium vouchers for major medical catastrophic health insurance. Actuarial based insurance. Means tested for the poor. Will it be expensive? Yes. But this is NOT cadillac insurance it’s catastrophic insurance.

    * All non-catastrophic “insurance” and payment plans to transition to a private system. Medicare and Medicaid to remain, but will be means tested.

    * Apropos this article, all health care expenses to be fully deductible. That means premiums and payments and pills. This helps decouple healthcare provision from employers.

    * Portability. You get to keep your insurance so long as premiums are paid in a timely manner. Three month leeway.

    * Premiums may not rise for changes in employment status, or any non medical reason.

    * Group plans are legal for any group, and no longer limited to just employers. Any company that wants to offer a group plan for any particular group can do so. Churches, neighborhoods, service clubs, extended families, etc.

  17. RE: Why the GOP’s “Repeal and Replace” Bill (AHCA) Is *Worse* than Obamacare

    Repealing and de-regulating the healthcare industry would be the best move for lowering prices and increasing healthcare benefits.
    But the sociaist-lite party, the republicans, can’t figure that one out.
    As Forrest Gump once said, “Stupid is as stupid does.”
    That pretty much sums up both political parties in the USA.

  18. If the GOP had really been interested in a simple repeal, they’d have held a vote, and then let the constituents tear the dissenters in the GOP apart. It would have been pretty simple. The second round of voting would have been significantly different than the first, as the spineless Congresscritters would have voted to keep their phony baloney jobs.

    But of course, they aren’t. They’re proving the fact that they aren’t actually any different from the Democrats. Not a surprise around here of course.

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