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Obamacare Turns Republicans Against Insurance

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Republicans have not proposed a replacement for the Affordable Care Act, and won’t, because Obamacare has turned the GOP base against insurance itself.

Earlier this month the Republican Study Committee said they would soon roll out a comprehensive replacement for the Affordable Care Act. But don’t hold your breath. While House Republicans have held 40 votes to repeal Obamacare, they have yet to offer a replacement as part of their “repeal and replace” mantra.

“Health insurance is now tainted by Obamacare”

In fact, back in April the House GOP caucus rejected Majority Whip Eric Cantor’s proposal to ensure coverage for people with preexisting conditions … because the proposal seemed to support part of Obamacare.

And that, Jonathan Bernstein argues, is why we’ll never see a GOP replacement plan:

But conservatives have decided that no policy overlap with Obamacare is acceptable. Tea Partiers have chosen to oppose not only Obamacare but any policy which even faintly resembles any piece of that omnibus legislation. We saw this in the House defeat of Eric Cantor’s high-risk poll bill this spring, when conservatives revolted against his effort to propose a GOP plan protecting those with preexisting conditions.

But that refusal to accept any of the substance of Obamacare has run Republicans right into a brick wall. Thanks to the way that the ACA was put together – it really is a mammoth omnibus bill which incorporated practically every plausible policy idea out there – it turns out that practically everything you can do to provide health insurance is now tainted by Obamacare.

“Declare victory or declare war”

The problem, as Ezra Klein explains, is that Obamacare began as a Republican plan:

Of course, as Gingrich correctly points out, the Republicans have no idea what is it is they’ll do – save for undoing what the Democrats did. But for all Gingrich’s bluster on the subject, the simplest way to understand that policy vacuum is to understand Gingrich’s pre-Obamacare health-care plan: It was Obamacare.

“We should insist that everyone above a certain level buy coverage (or, if they are opposed to insurance, post a bond),” he wrote in his 2008 book, Real Change. “Meanwhile, we should provide tax credits or subsidize private insurance for the poor.”

So that’s an individual mandate plus tax subsidies to purchase insurance. That’s the core of Obamacare. And it’s no surprise Gingrich supported it. Lots of Republicans did. Gov. Mitt Romney even signed a plan like that into law in Massachusetts.

But once President Obama proposed it, Republicans flipped to oppose it:

Conservative elites had two options when Democrats began to adopt their policy ideas: Declare victory or declare war. Key figures like Gingrich could’ve stepped before the cameras and chortled about Democrats giving up on single payer and slinking towards conservative solutions. For Hillary Clinton to run in 2008 with Bob Dole’s health-care plan was an amazing moment in American politics. For Barack Obama to reverse himself on the individual mandate and embrace the Heritage Foundation’s approach to personal responsibility was further proof that Democrats had lost the war of ideas here. Republicans could have declared victory and, by engaging constructively, pushed the final product further toward their ideal.

They chose war instead. And that meant eradicating any trace of support for the policies they had come up with.

“Young Invincibles”

Indeed Ed Kilgore writes that Republicans have now turned against the very idea of insurance:

But the GOP’s problem on health policy goes deeper than having to erase their own tracks. There are three persistent obstacles to the development of a conservative “replacement” for Obamacare.

(1) A growing tendency to oppose the very idea of redistribution of risk and cost, which is essential not just to public health reform efforts, but to private health insurance. Conservatives often seem to want to go back to those days when patients paid doctors with cash or did without health care altogether. That’s “personal responsibility” with a vengeance.

A new ‘study’ by David Hogberg of the conservative National Center for Public Policy Research encourages young, health Americans – Hogberg calls them “Young Invicibles” – to not buy health insurance at all:

This study finds that in 2014 many single people aged 18-34 who do not have children will have a substantial financial incentive to forego insurance on the exchanges and instead pay the individual mandate penalty of $95 or one percent of income. About 3.7 million of those ages 18-34 will be at least $500 better off if they forgo insurance and pay the penalty. More than 3 million will be $1,000 better off if they go the same route. This raises the likelihood that an insufficient number of young and healthy people will participate in the exchanges, thereby leading to a death spiral.

But as Jonathan Bernstein writes, this ‘study’ completely ignores that health insurance offers benefits:

Hogberg seems to understand that even young, healthy people have occasional medical needs; he cites figures that “those aged 18-34 average about 2.7 physician visits per year” and that women in that age group use the health-care system more than men do. And yet he doesn’t account for that at all in his cost calculations. He just looks at premiums, subsidies and the “mandate” penalty for going without. It’s probably true that the healthiest of the young healthies, especially men, can go years between doctor visits (and would do so even if insurance covered everything). But even young healthies get the flu, or sprain an ankle, or otherwise need a bit of medical attention. Some even want regular check-ups just to be safe! Those visits cost money; any proper study of costs and benefits would take them into account.

The “Young Invincibles” are not, in fact, invincible. Hogberg’s response?

In a market without guaranteed issue, consumers run the risk of insurers not selling them policies when they get seriously ill. But that risk is largely gone under the exchanges. For instance, a young person who gets a serious illness in June only has to wait until October to sign up for insurance and then wait until January 1 of the next year to receive coverage.

So if you’re a “Young Invincible” and you get in a car accident in June, either pay for the hospital visit yourself, or lie beside the road until January and call for an ambulance once your new insurance kicks in.

“They’re going to become older not-so-healthies”

Even that ignores the deeper problem, as Bernstein explains:

There’s a larger issue here, too. While Hogberg is focused only on the immediate financial incentives for young healthies (which is fine; it’s a real and important question), there’s also a question about the long-term interests of this cohort. Because the one thing that’s going to happen to most young healthies is that they’re going to become older not-so-healthies, and at that point most of them are going to be very happy to have a functioning insurance market. Those who are young and childless may, before all that long, become parents — again, parents who badly want to buy insurance. And those young healthies may even have a major financial stake in what happens to their 40- and 50-something parents; they may care quite a bit that their parents aren’t wiped out financially by health care before they are Medicare-eligible.

The whole point of health insurance is that premiums paid by healthy people fund benefits paid for sick or injured people. Yes, over an average lifetime, you will pay more in premiums than you receive in benefits. That’s how insurance companies pay their employees. But by paying premiums every month – in a well-regulated and effective insurance market – you avoid (most of) the short-term cash crunch of a serious illness or injury.

“It’s not a positive development for the Republican opponents”

As it happens, most Americans recognize that reality and do buy health insurance, and the USA TODAY reported that states now expect participation in the Obamacare exchanges to exceed expectations:

Estimates from 19 states operating health insurance exchanges to help the uninsured find coverage show that at least 8.5 million will use the exchanges to buy insurance, a USA TODAY survey shows. That would far outstrip the federal government’s estimate of 7 million new customers for all 50 states under the 2010 health care law.
[…]
“For the most part, that’s a very good thing,” said Paul Ginsburg, president of the Center for Studying Health System Change. “First, these are people who need health insurance. And second, the scenario that only sick people will enroll is less likely.”
[…]
“It’s not a positive development for the Republican opponents who would like to see this fail,” Ginsburg said. “But it’s still very early in the process.”

Of course conservatives are predicting that most of those 8.5 million will be sick people who couldn’t get other insurance, or workers whose bosses are cutting health insurance benefits. And some will be. But most Americans – even “young invicibles” – know they’re not really invincible.

Republicans’ intransigence has left them arguing that people should lie beside the road for six months before calling an ambulance. Except of course Republicans don’t actually say that. Instead they say, truthfully, that emergency rooms will treat you even if you don’t have health insurance.

In other words, the “party of personal responsibility” advocates … free-riding on publicly-funded emergency room care.

Reflexive partisan opposition has left them no other choice.