Debate in Congress about the fate of Obamacare should begin with this truth: The Affordable Care Act in its current form is disintegrating, and without a substantive fix Americans across the economic spectrum will either lose their health insurance or be priced out of using their policies.
Insurance companies are fleeing the Obamacare exchanges. Only a half dozen of the 23 original ACA exchanges, formed with $2.4 billion in taxpayer startup money, remain. One-third of America has just one exchange insurer to choose from, and in some places none.
Insurers are bailing because the financial assumptions made by the Obama administration were way off base, and they’re losing money. Blue Cross-Blue Shield of Michigan, for example, lost $68 million on individual policies last year.
And it’s not just customers of the exchanges that are impacted. Instead of containing health insurance costs, Obamacare has sent them skyrocketing. Rising premiums make policies unaffordable for many Americans, and high co-pays and deductibles render the policies all but useless.
The healthy, young Americans whose coerced participation in the insurance market was supposed to control policy costs aren’t buying.
In short, Obamacare has failed in its mission of providing all Americans with affordable health insurance.
Congressional Republicans last week introduced their solution, which has the blessing of President Donald Trump.
It is not perfect. Conservative Republicans are denouncing it as a new entitlement because it continues heavy subsidies for individual insurance buyers. Democrats are objecting to any changes in Obamacare.
But it is a solid starting point for the unavoidable revamping of the health insurance system. Both the president and GOP congressional leaders say they are open to negotiating.
The proposed legislation provides a basis for forging a solution, and the hard-liners in both parties should recognize the urgency of getting something done before the current system collapses.
The GOP plan holds onto some of the more popular elements of the Affordable Care Act, including protecting those with pre-existing conditions and allowing children to stay on parental policies until age 26.
And it adds some significant reforms that were included in the Republican Better Way plan that was widely supported by GOP lawmakers last year.
It gets rid of most of Obamacare’s taxes, coverage mandates and regulations and instead provides incentives for individuals to buy insurance on the open market. Those without employer-provided health insurance would receive age-adjusted tax credits to replace the ACA exchange subsidies ranging from $2,000 to $14,000.
That provision begins to erase the unfair aspect of the current system, in which employers can deduct the cost of insurance policies but individuals can’t.
Medicaid would be converted to block grants to the states, awarded on a per-capita basis and adjusted for inflation. This will allow governors to innovate to cut costs and craft plans suitable for each state, and provide incentives for limiting the program’s unchecked expansion.
The GOP Freedom Caucus must come to the reality that Obamacare can’t simply be repealed and the free market restored. The pre-ACA insurance market doesn’t exist anymore, and Americans won’t stand for having 20 million people suddenly tossed off coverage. What they should be seeking is a plan that can get through Congress.
This bill can be shaped to build a consensus, if hard-line Republicans and obstinate Democrats are open to a realistic solution.
—The Detroit Free Press, March 11, 2017
