Republican healthcare resolve falters

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It remains to be seen whether Republicans will make good on their oft-repeated promise to “repeal and replace” Obamacare (which we call GovCare). They have the votes (if they stick together), but their rollout of proposed legislation has been clumsy and the window of opportunity won’t stay open indefinitely.

A healthcare bill (the American Health Care Act) was passed in the House, after much maneuvering and by a razor-thin margin. House healthcare bill draws heavy flak,
5/15/17.

Senate Republicans drafted their own healthcare bill; it was published on June 22. Senate Majority Leader Mitch McConnell wanted a vote on the Better Care Reconciliation Act before the July 4th recess, but there were too many GOP holdouts (more than two “no” votes would prevent a win) so action was postponed until the week of July 10.

Neither the House bill nor the Senate bill would truly “repeal and replace” GovCare, but either of these bills (or whatever combination thereof might emerge from a House/Senate conference committee) would make major changes in existing law and affect the trajectory of future healthcare legislation. Small wonder, therefore, that the American public is a bit bemused, while insiders are passionately invested in the outcome.

With the action paused for now, it may be instructive to review some of the arguments against the Republican healthcare reforms.

I. That’s not what Americans want – Most Republicans concluded months ago that a complete overhaul of GovCare wasn’t politically feasible, and their efforts were planned accordingly. GovCare won’t really be repealed, and that’s fine, 12/5/16.

Passage and implementation of the Affordable Care Act, on top of previously established programs (Medicare, Medicaid, etc.), has created expectations of subsidized healthcare coverage for all Americans (not just the indigent). Such expectations can’t be readily extinguished, and full repeal of GovCare could create a political firestorm that most Republican leaders are unwilling to risk.  

Even the selective changes that are proposed don’t seem popular. Polling indicates that substantial portion of American voters questioned the House bill while it was under consideration, and support has been eroding since then. Half of voters disapprove of Republicans’ healthcare reform bill, Anna Giaritelli, Washington Examiner,
6/21/17.

Republicans and independents are less and less likely to support the reforms. Disapproval among GOP voters nearly doubled since the start of the poll, climbing from 16 percent in late April to 30 percent in mid-June, while it jumped from 36 percent to 53 percent among Independents.

Polling for the Senate bill has been lopsidedly negative, probably reflecting GOP efforts to bring this bill to a vote without much discussion. Poll: Only 12% of Americans support the Senate healthcare plan, Susan Page & Emma Kinery, usatoday.com,
6/28/17.

In the survey, 45% oppose the Senate bill and nearly as many, 40%, say they don't know enough about it to have an opinion. The plan was drafted in closed sessions by a handful of Republican senators and staffers, and it hasn't gone through the customary process of committee hearings. Even among Republicans, only 26% support the Senate bill; 17% oppose it [and 52%] say they need more information before they can express a view.

Efforts should be made to better explain what’s in the Senate bill – which is far from ideal but does include some good elements. See, e.g., Senate Better Care Act: A big bunch of sausage meat loaf, Devon Herrick, townhall.com,
6/27/17.

The Senate bill “repeals the Obamacare mandates and associated taxes, sort of caps Medicaid growth but does nothing to make health[care] coverage a better deal for most people” by changing the regulations that require “insurers to accept customers they do not want and make up the difference by overcharging desirable ones.”

The mainstream media coverage isn’t likely to help. Consider this story in Delaware’s largest newspaper, which painted a picture of widespread local opposition to the Senate bill – with only one speaker (Michael Harrington, the recently elected chairman of the DE Republican Party) supporting it. Healthcare bill draws skepticism, Meredith Newman, News Journal,
6/30/17.

II. Millions of Americans would lose healthcare insurance – The Congressional Budget Office had previously predicted that the House bill would reduce the number of Americans with healthcare insurance (HCI) coverage 10 years hence by 23 million. Last week, essentially the same result was predicted for the Senate bill. CBO: Senate healthcare bill spends more and taxes more than House, but still leaves 22 million more uninsured than Obamacare, Philip Klein, Washington Examiner, 6/26/17.

Some saw this result as tipping the balance against the Senate bill. [Senator Susan] Collins to vote against Republican healthcare plan after budget analysis, Tom Howell, Washington Times,
6/26/17.

CBO says 22 million people lose insurance; Medicaid cuts hurt most vulnerable Americans; access to healthcare in rural areas threatened,” Ms. Collins said on Twitter. Her opposition could stall the repeal effort, even as GOP leaders pushed for a floor vote before senators go home for a weeklong break around the July 4 holiday.

But the CBO prediction about the Senate bill was hardly unexpected; it rested (as was also true under the House bill) primarily on elimination of the individual mandate to acquire approved HCI. H.R. 1628, Better Care Reconciliation Act of 2017, Congressional Budget Office, p.4,
6/26/17 (download PDF).

CBO and JCT estimate that, in 2018, 15 million more people would be uninsured under this legislation than under current law—primarily because the penalty for not having insurance would be eliminated. The increase in the number of uninsured people relative to the number projected under current law would reach 19 million in 2020 and 22 million in 2026. In later years, other changes in the legislation—lower spending on Medicaid and substantially smaller average subsidies for coverage in the nongroup market—would also lead to increases in the number of people without health[care] insurance.

Assuming fewer Americans would purchase approved HCI coverage if given a choice about the matter, would that necessarily be bad? Should the government insist on telling them what to do? [House Speaker] Paul Ryan: CBO score on healthcare bill is misleading, Sally Persons, Washington Times,
6/27/17.

“What they’re basically saying at the Congressional Budget Office is if you’re not going to force people to buy Obamacare, if you’re not going to force people to buy something they don’t want, then they won’t buy it. So it’s not that people are getting pushed off a plan, it’s that people will choose not to buy something they don’t like or want,” Mr. Ryan said on Fox News.

True, an HCI market won’t be viable if insurers aren’t permitted to adjust premiums for individual medical problems and a disproportionate percentage of older/sicker people sign up. But it’s at least worth trying to facilitate more attractive options for purchasers versus continuing to rely primarily on coercion.

Also, about 2/3 of the predicted decline in HCI coverage would represent people failing to sign up for Medicaid – even though it’s free for them – which may be unrealistic. Mick Mulvaney: The day of the CBO “has probably come and gone,” Philip Klein, Washington Examiner,
5/31/17.

"Did you see the methodology on that 23 million people getting kicked off their health[care] insurance?" he said. "You recognize of course that they assume that people voluntarily get off of Medicaid? That's just not defensible. It's almost as if they went into it and said, ‘Okay, we need this score to look bad. How do we do it?'"

III. GOP bills would do great harm – Numerous claims along this line have been made; here are a few examples:

#The Senate bill would slash Medicaid, a program that covers 20% of Americans, nearly half of newborn deliveries and two-thirds of people in nursing homes. Senate health[care] bill hazardous to America, usatoday.com,
6/22/17.

But no cuts are proposed; the Senate bill would simply reduce the rate at which Medicaid is expected to grow. Congressional Budget Office, op. cit.,
6/26/17.

Screen Shot 2017-06-30 at 8.26.49 PM

Also, it’s proposed to give the states greater flexibility to design their own programs and direct funding to where it is most needed. This should at least partially make up for receiving fewer federal dollars, as has been demonstrated by the success of innovative programs in several states including Indiana and Rhode Island. The Senate’s Medicaid moment, Wall Street Journal, 6/6/17.

The modern era of Medicaid reform began in 2007, when Governor Mitch Daniels signed the Healthy Indiana Plan that introduced consumer-directed insurance options, including Health Savings Accounts (HSAs). Two years later, Rhode Island Governor Donald Carcieri applied for a Medicaid block grant that gives states a fixed sum of money in return for Washington’s regulatory forbearance. Both programs were designed to improve the incentives to manage costs and increase upward mobility so fewer people need Medicaid. *** Even as Obamacare changed Medicaid and exploded enrollment, these reforms are working, and the House bill is designed to encourage other states to follow.

#Cuts in the state’s Medicaid budget would force Delaware to choose between protecting vulnerable populations (children, the disabled, and seniors who depend on Medicaid for long-term care) and working adults who don’t qualify for individual HCI policies in the marketplace. Uninsured patient population wouldn’t receive preventive care, thus allowing an ailment that could have been easily managed in outpatient care to become a significant event. Residents would find it even harder to find treatment for opioid addiction. Healthcare bill draws skepticism, op. cit.,
6/30/17.

Perhaps Delaware could learn from the Medicaid innovations in Rhode Island, Indiana and elsewhere; certainly a “don’t make us choose” mindset doesn’t seem constructive.

#The Senate bill would "dramatically" increase healthcare costs for older Americans who purchase HCI coverage by allowing them to be charged up to five times more (currently three times more) than younger Americans for HCI coverage. AARP warns senators to “start from scratch” on healthcare bill after CBO score released, Josh Siegel, Washington Examiner,
6/27/17.

OK, but older Americans have much higher medical expenses – on average – than younger Americans. As we understand it, the 5:1 ratio would be in line with average experience, whereas the current 3:1 ratio results in younger Americans being overcharged (helping to explain their reluctance to sign up for HCI coverage).

IV. Republican goal is to cut taxes for the rich – This claim has been made by several prominent Democrats, including a former president. Obama attacks Senate healthcare bill as “massive transfer of wealth” to the rich, Jack Davis, westernjournalism.com, 6/23/17.

“The Senate bill … is not a healthcare bill,” Obama wrote [in a Facebook post]. “It hands enormous tax cuts to the rich and to the drug and insurance companies, paid for by cutting healthcare for everybody else.”

“Simply put, if there’s a chance you might get sick, get old, or start a family — this bill will do you harm,” Obama wrote. “It would raise costs, reduce coverage, roll back protections and ruin Medicaid as we know it.”


Would the Senate bill cut taxes for the wealthy? Yes, in that a 3.8% surcharge on investment income received in high-earner households would be repealed – with a revenue loss of $172 billion over 10 years according to the CBO report - along with numerous other tax increases that were included in the Affordable Care Act.

That doesn’t prove the intent of the Senate bill is to enrich the wealthy, however, any more than the inclusion of the surtax in the Affordable Care Act demonstrated an intent to impoverish the wealthy. The liberal view of the matter seems conveniently one-sided.

V. Healthcare changes should be made on a bipartisan basis – As a GOP consensus has proved elusive, with conservatives demanding bigger changes to GovCare and moderates preferring smaller changes, the initial assumption that Republicans should proceed on their own is being challenged.

Healthcare is such an important matter, it’s said, that no major changes will last unless members of both parties are on board. Also, we can’t get things done if this, that or the other GOP faction can block a bill it doesn’t like simply by withholding support.

Granted, the Obama administration passed GovCare without a single Republican vote, but that was the exception that proved the rule – and GovCare hasn’t turned out very well. Republicans take tips from Obama, Hillary Clinton on how not to pass a bill, Noemie Emery, Washington Examiner,
6/27/17.

Vanity, spite and revenge can be understood, but they are really bad reasons to fiddle around with the fortunes and lives of millions of people, especially when you have no idea what you're doing at all. Revenge can be sweet, but also short-sighted. And it's hardly revenge if you replace one badly planned and ruinous bill with another, that may bring upon you the same kind of ruin that has been your enemies' fate.

Several legislators have expressed interest in bipartisan negotiations, e.g., Senators Joe Manchin (D-WV), Ron Johnson (R-WI), and Susan Collins (R-ME). And it’s been suggested that the president might decide to reach out to Democrats at some point. Healthcare bill really could become “Trumpcare” with centrists in play, James Antle, Washington Examiner,
6/29/17.

Trump has so far dealt predominantly with Republicans who want to push the healthcare bill to the right, with his White House furiously disputing the CBO coverage numbers, because theirs were the votes needed to get to a bare majority. But it's not where Trump's personal preferences lie. If a bill with more "heart" — and more government — is what can pass, don't expect him to be an obstacle. Trumpcare, indeed.

On the Democratic side, there have been many statements about willingness to work with Republicans –but only after a GOP surrender, and with a limited goal (providing more federal funds to shore up the individual HCI market). [Senator Dick] Durbin: Debate will start when GOP bill dies, Sally Persons, Washington Times,
6/27/17.

“I think the day after this Republican repeal goes down, we can start an honest, bipartisan negotiation — that says we are not going to repeal. We are definitely going to start a bipartisan basis to repair it. I know there are Republican senators ready for that to happen,” Mr. Durbin, Illinois Democrat, said on CNN. He said the main problem is in the individual marketplace where the premiums have skyrocketed.

Longer term (say in 2020), however, the goal is a single payer system – and here’s an unusually candid statement from a senior Democrat (who among other things served as a secretary of Labor in the 1990s). It’s time for Medicare for all, Robert Reich, eurasiareview.com,
6/28/17.

What should be the Democrats’ response? Over the next weeks or months, Democrats must continue to defend the Affordable Care Act. It’s not perfect, but it’s a major step in the right direction. Over 20 million Americans have gained coverage because of it. But Democrats also need to go further and offer Americans a positive vision of where the nation should be headed over the long term. That’s toward Medicare for all.

Although Reich’s understanding of the political equation is spot on, his case for a single payer system is less convincing. US healthcare costs are far higher than elsewhere (true) – US longevity is nothing to brag about vs. other countries (true, but not necessarily due to problems with our healthcare system) - Americans avoid going to the doctor because costs are so high (dubious, especially as most of the costs aren’t perceived as coming out of their own pockets) – if the government was running things and negotiating prices with healthcare providers, we would all get better care at lower cost (pure conjecture).

There is plenty of evidence that a single payer system wouldn’t necessarily deliver the medical services that people expect at far lower cost. Indeed, this sounds a lot like the claims that were used to sell GovCare – “if you like your healthcare insurance you can keep your healthcare insurance, etc.” – which didn’t prove true in practice. Ignore single-payer siren song, Sally Pipes, Washington Times,
6/29/17.

Patients in the United Kingdom’s single-payer system, the National Health Service, are also well-acquainted with waiting for care. In 2015, nearly 40,000 patients waited more than 18 weeks to start treatment, following referral. More than 13,000 people waited more than half the year. Those are the worst figures since the NHS began keeping track in 2008. According to one investigation, substandard facilities and long delays at 14 NHS facilities may have caused up to 13,000 avoidable deaths between 2005 and 2012.

Is de facto rationing what Americans want, whether it’s imposed by government bureaucrats or insurance companies? Think about it, because that may be the outcome if Republicans can’t get their act together in coming weeks.

Here’s an example of what the future could look like in a top-down healthcare system: Doctor: Insurance wouldn’t pay for patients’ treatments, but offered assisted suicide, dailysignal.com, video (3:03),
6/28/17.



**********FEEDBACK**********

#Is healthcare a right?  This is the fundamental question.  I suggest the answer is no! It is simply a commodity to which the general rules of supply and demand apply, absent intrusive government meddling.

Some commodities have relatively elastic demand, some relatively inelastic.  The demand, and thus the price, for healthcare can be very elastic, if consumers know exactly how much services cost.

If they knew the price for services, their desire for expensive, and often unnecessary treatments/tests, would decline; prices would fall, and supply and demand would reach equilibrium. Until then, healthcare costs will continue soaring.

The poor must have skin in the game too, which means co-insurance and healthcare savings accounts, and welfare to work. Incentivize people to not spend the money in their HSA by making healthy lifestyle decisions and price sensitive choices, and savings will occur.  – SAFE member (DE)

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