Monday, March 2, 2015

Republican Alternatives to Obamacare

It would be false to say that the right wing leadership lacks a firm consensus on healthcare policy. Quite the contrary, the Republican Party, its donors and activists, libertarians, right wing think tanks, and the right wing press unanimously share the same view on healthcare policy.  They are opposed to it.

There is some disagreement on how far that opposition should go.  Should be simply end all government role in healthcare?  Does government have a legitimate role in the form of county indigent funds and limits on medical malpractice suits?  Should we recognize that such sudden measures are too painful and launch a gradual rollback of Medicare and Medicaid by turning them into something that looks a lot like Obamacare?  Should we see Medicare and Medicaid as morally and constitutionally illegitimate but irreversible and simply seek to keep the rot from spreading?  Or should be embrace government coverage for people over 65 and limit ourselves to keeping anyone under 65 away from the party?  All of these viewpoints would agree that Obamacare must go, no matter how many people lose coverage as a result.

The trouble is that while the right wing leadership may hold such views, the Republican followership is much more likely to see Obamacare as an evil monstrosity that has to go, so long as no sympathetic person actually loses insurance as a result.  In other words, now that people have insurance, simple repeal is out, as is repeal and replace.  Republicans' only hope is in replace and repeal.  And this means they have to have a healthcare policy, despite it being against their absolute principles.  And when people who are ideologically opposed to healthcare policy are forced by circumstances to come up with one, this can lead to disagreement on how far political reality can be accommodated without losing one's ideological bona fides.

It is much easier to be opposed to healthcare policy.  Since every heathcare policy has losers as well as winners, one simply takes the part of the losers.  But coming up with their own forces policy makers to pick winners and losers of their own.  And, as the Republicans know all to well, it is easier to rally potential losers against a policy than potential winners in favor of potential benefits.

To the extent that Republicans are forced to have a healthcare policy their most important principles are:

  1. Expenditure must be minimized;
  2. Government regulation must be kept to a minimum, or at least less than under Obamacare;
  3. The best way to minimize expenditure is to cover as little as possible and make people pay for more of their own healthcare.
The question is whether such plans would be politically palatable.  This article contains more details.  Most plans provide financial assistance to fewer people, cut it off at a lower income level, reduce the package of benefits insurers are required to cover, give insurers greater leeway to increase fees for older customers, and replace Medicaid with subsidies to buy private insurance.

None of these measures are likely to be popular, and Republican constituencies in particular are apt to dislike many.  They also show how easy it is to be unprincipled as an opponent, and how difficult to stake out an actual position.


Republicans were great champions of high deductibles and narrow networks, until Obamacare started offering a lot of plans with high deductibles and narrow networks and these proved unpopular, at which point Republicans started denouncing them as an outrage.  

Republicans were champions of young people who saw their premiums increase while older customers saw them decline.  The unregulated workings of the free market provide great rates for healthy young men; clearly the rates charged healthy young men were the most important trait in any healthcare system.  But faced with the prospect of lower rates for younger customers and higher rates for older customers, Republicans are apt to remember which group makes up a larger share of their base.

One obvious way to save money is to set a lower income threshold for eligibility for subsidies.  Except that will mean people getting their subsidies being cut off and being unhappy.  Worse still, lower income groups are less likely to vote in general, and to vote Republican in particular than more middle income votes, which does not bode well for anyone proposing to lower the income threshold for subsidies.

Alternately, some Republicans propose to allow subsidies to buy policies on the exchanges, but allow states to opt out of the regulations, such as the mandatory package of benefits, the individual mandate, and the ban on discriminating against pre-existing conditions.  Well, I think we dismiss this last.  Getting up and fighting for the right of insurance companies to exclude people with pre-existing conditions is a good way to commit political suicide.  Allowing states to end the individual mandate simply means allowing states to induce a death spiral.  Inducing that death spiral is one of Republicans' favorite ways of killing Obamacare on the theory that so long as they avoid short-term catastrophes, they can shift the blame to Obama.  I think any Republican seeking to induce a death spiral should be confronted with some tape of policymakers or wonks describing the strategy and forced to explain exactly why they want people's premiums to spiral out of reach.  It could be entertaining watching them squirm.

Finally, although I could not find the link, many others are still digging up old proposals to end the tax subsidy for employer-based insurance.  Look, basically all wonks, liberal, conservative or libertarian, agree that basing health insurance on employment was a mistake and it would be better to somehow separate the two.  But the vast majority of the population are not wonks.  One of the Republicans' favorite schemes in opposing Obamacare was leading people to believe it would mean the end of their employment-based insurance.  And, indeed, many people were suitably alarmed. So if Republicans are preparing to do just that -- well, let's just say I look forward to them getting a taste of their own medicine.

No comments:

Post a Comment