Republican Obamacare Changes Are Senseless

I can't even call the Republican proposed changes to Obamacare awful -- they are senseless.   There is no framework I can devise, either ideological or pragmatic, in which they make sense.  Republican commentators seem to be divided between those who think this new legislation sucks and those who think it sucks but needs to be looked at in a larger legislative framework.   The latter argue that this first bill is merely all that can be done in reconciliation, and that other changes will be coming later.  But of course, no one will tell you what they plan for later (if they even know themselves).  This approach is at least as bad as the original Democrat "we have to pass the bill to find out what is in it" approach.  At least the full plan for Obamacare was there to be read, even if it was a stultifying 2000 pages.  How can we possibly assess what the Republicans are trying to do if they will not  outline their whole plan?

I refuse to even take the time to criticize this seriousness mess in detail.  If you really need that, see Megan McArdle for example.  What we have right now is the legislative equivalent of Trump's original half-baked, rushed immigration order.  This pile of garbage will likely last about as long.

  • ErikTheRed

    Senseless? This legislation make perfect, flawless, crystal-clear sense... if you know how to look at it.

    It seems to me that everyone is analyzing this dung heap in the context of which political groups benefit from this and is left scratching their collective heads, because as is almost always the case they are looking in the wrong place. The answer is right in your face: the people who benefit are members of Congress and lobbyists. The Republican Party - that is to say, the people who control the party and what it actually does, as opposed to the mindless buffoons who vote them into power based on the most laughably transparent lies - does not want Obamacare to go away. At all. They love it and want to keep it and embrace it and cuddle it and nurture it and just smother it with kisses in a seedy hotel room while their constituents wait at home wondering where they are and continuously reassure themselves that it's all just business as usual (which it is, just not in the way they think).

    Let's be honest - Big HMOs and Big Pharma have way more to give than a bunch of yokels at their Rotary meetings convincing themselves they're defending capitalism and free markets (even writing this makes me giggle). Both the Democratic and Republican parties want a European-style semisocialist state where a few big corporations are kept around like exhibits in a zoo and the people have to line up and beg for either the corporations to be "managed" (again, giggling) or to have the government provide for their wants (after sufficient begging and voting, of course). At this point the Republican peons are always sputtering that they don't want this and all I can say is that I'll think about taking you seriously when you stop voting that way.

  • MJ

    In many ways, this will be the defining issue for the Trump Administration and congressional Republicans. Trump made a politically risky calculation that running on repealing Obamacare -- an issue echoed by Republicans across the country for several years now -- could be a winning strategy, even if he didn't offer much (or any) detail on his plans for replacement during his campaign.

    It's not uncommon for major office candidates to hide the specific details of key issues in their platform until after primary races have ended. Some even withhold details through the first couple of debates. But I don't think I've seen a candidate, a presidential candidate no less, lean so heavily on a particular issue during his or her campaign while offering so few specifics. As I watched this, I thought that maybe he had some vague ideas that could be fleshed out in the days and weeks following the election, and that was why he didn't elaborate during the debates.

    But it's now becoming increasingly evident, as it is on several other issues, that this Administration simply has no idea what it's doing. It's literally flying by the seat of its pants. The thought process seems to be "we'll get into office then figure out what we're going to do later on". That is a thought process that is not only ignorant of how policy is actually crafted, but one that also requires a large amount of hubris. The "curious task" quote by Hayek applies to both parties when it comes to health care policy. The Democrats thought they could design a new healthcare system and implement it 1) without virtually any bipartisan support and 2) without reading what they were actually proposing before voting on it. And now we see the Republicans believing they can reinvent it on the fly without any concrete knowledge of how the economics of health care actually work.

  • mlhouse

    The problem is that this is a complicated repeal process. To claim otherwise is just plain nonsense (even though the GOP did politically).

    One way that I look at it is it is like trying to make changes to a computer program that is already in production. Making the change on the development side is easy. But on the production side with real data that is being used and changed live, it isn't so easy. Lots of planning needs to be done just when to try to make the updates, and some processes that are no longer going to be used sometimes needs to be run simultaenously for continuity.

    On some of the bullet point level of this measure I like it. I do think that the crux of the problem, and any health insurance plan goign forward is the "preexisting conditions" issue, and I believe that the GOP is making a mistake of trying to retain within the health insurance model. Insurance is a good for uncertain risk. A preexisting condition is not a risk, it is a cost and cannot exist in the insurance model and needs to be addressed seperately.

  • ReallyOldOne

    Maybe the real problem is expecting big gov to manage health care. When did we get to the place where every problem is solved in DC or the state capitals. Where in the constitution does it make health care a "right" to be provided by the government? Maybe those who think everyone in the US (legal or not) is guaranteed health care should pay for same health care. And if you slam this idea as cruel, are you willing to back up your comments with your checkbook? Not my checkbook, yours. And don't fall back on they will only go to the emergency rooms as that also assumes that health care is a "right". Its big gov that demands hospitals provide "free" health care that gets forced on those of us who pay. Everyone is quick to offer/force solutions, but how many are willing to honestly face up to and shoulder the costs? Damn few in my experience. Brave talk, little real action or bearing the costs. Cowards.

  • MJ

    I agree with your last point, that preexisting conditions are not really a risk and thus should not be forced into private insurance markets. Some of the more intelligible observers I've heard from on the Right have suggested some version of moving these people (patients with serious and costly preexisting conditions) into existing public programs like Medicaid or state-level equivalents which already have a fairly large customer base, and just providing subsidies to the users of these services.

    And I understand that repealing the legislation is a complicated process, but what bothers me is the lack of detail that is emerging from the Administration about what they propose to do. Since they're already in office it makes little sense to play their cards so close to the vest. The only other possibility, and the one that I'm increasingly convinced of, is that details are not being released because there really aren't any details.

  • mlhouse

    Those are options. I also think that a "reinsurance" concept should also be considered were the individual can be protected from other risk with an insurance policy.

    As far as the details, you have to remember that Trump has only been n office for a little bit more than a month and Tom Price was not confirmed until Feb 10. How is the administration supposed to have a lot of "detail" when the point secretary for health care repeal hasn't even been in his position for a month?

  • TruthisaPeskyThing

    Coyote, I would understand from your response that the GOP proposal would not help you in your business. It would help me . . . but it would not take much to help me after the devastation that Obamacare wrecked on me.

  • The central reality of politics today is that the government has made $100 trillion (not a typo) of promises to be delivered over the next 80 years. It can't pay. The budget deficit of $1 T/year is a symptom of this, roughly 30% of all spending.

    Almost all career politicians are amoral liars. This is part of the competition which raises them to high office. So, they deal with medical care ad hoc and without honesty, as all politics is done.

    ObamaCare is an attempt to make the populace pay for these promises without presenting them with a direct tax. They wouldn't pay this direct tax. Instead, ObamaCare is designed as "insurance" which hopes to make everyone young or youngish pay for everyone old or oldish. The only resources which can pay for these promises must come from the people, the only source of such great wealth over time.

    Insurance is crazily presented and misunderstood. Insurance is not the pooling of low-risk, inexpensive people (the young) along with high-risk, expensive people (the old). Insurance is pooling people of similar risk, each with a similar probability of suffering a loss.

    In true insurance, young people would pay a very low premium for medical insurance, to cover the very low incidence of serious injury and disability among the young. If 1% of the young suffer a $10,000 injury each year, then the insurance cost would be about $100 per year, each. There are more costly risks for the young, and I have seen estimates of $500 per year as enough to cover their catastrophic insurance needs.

    The incidence of high cost medical care for those 65+ is much greater. $10,000 /year/each might be a reasonable estimate of the overall risk. They can't pay this, so they seek subsidies and programs like Medicare which reduce what they pay. This can't reduce what they cost.

    ObamaCare is an attempt to monopolize insurance. It says to people, "If you want any insurance at all, you must pay what we tell you". This leads to family policies of $12,000+ /year with $6,000 deductibles. It is essentially a $12,000 tax per family hidden in insurance. Still, this isn't enough to pay for all the promises, but it is a start.

    We see that much of the young are taking their chances and not joining into the tax. The penalty for not having insurance is small compared to the cost of insurance, and the coverage of pre-existing conditions means that many people figure they can wait and get insurance when they need it, after the fact of their injury.

    The Republicans are mostly career politicians with the same incentives. I think they are, as a group, only a marketing arm of the DemoPub party. You can buy the message of the Dems or of the Pubs, but you are going to get the same policies and results. They belong to an organization, the government, which has promised $100 T. They will all have the same policies, in effect.

    This explains Republican actions. Their replacement for ObamaCare is only a crafty variant, with each ObamaCare policy replaced by an equivalent but differently implemented policy. Coverage of pre-existing conditions, kids insured to age 26, and subsidies are all retained. Government meddling through Medicare/Medicaid insure that the rigidities of socialist medicine will keep costs high.

    We are not a capitalist society. The solution to medical care is to deregulate it and make all subsidies explicit, not hidden in insurance. This won't happen, because each politician is elected by his base which accepts a particular marketing message, and elected by some independents who are mostly socialist in their view that "people should be helped".

    People won't accept the direct taxes needed to keep the government's promises. It seems that they will accept socialized medicine for all, which saves money by delivering cheap and poor services to the hapless peasants which will have to use that system. Check out the Veteran's Administration version of health care to see the future.

  • (Part 1) The central reality of politics today is that the government has made $100 trillion (not a typo) of promises to be delivered over the next 80 years. It can't pay. The budget deficit of $1 T/year is a symptom of this, roughly 30% of all spending.

    Almost all career politicians are amoral liars. This is part of the competition which raises them to high office. So, they deal with medical care ad hoc and without honesty, as all politics is done.

    ObamaCare is an attempt to make the populace pay for these promises without presenting them with a direct tax. They wouldn't pay this direct tax. Instead, ObamaCare is designed as "insurance" which hopes to make everyone young or youngish pay for everyone old or oldish. The only resources which can pay for these promises must come from the people, the only source of such great wealth over time.

    Insurance is crazily presented and misunderstood. Insurance is not the pooling of low-risk, inexpensive people (the young) along with high-risk, expensive people (the old). Insurance is pooling people of similar risk, each with a similar probability of suffering a loss.

    In true insurance, young people would pay a very low premium for medical insurance, to cover the very low incidence of serious injury and disability among the young. If 1% of the young suffer a $10,000 injury each year, then the insurance cost would be about $100 per year, each. There are more costly risks for the young, and I have seen estimates of $500 per year as enough to cover their catastrophic insurance needs.

    The incidence of high cost medical care for those 65+ is much greater. $10,000 /year/person might be a reasonable estimate of the overall risk. They can't pay this, so they seek subsidies and programs like Medicare which reduce what they pay. This can't reduce what they cost.

  • (Part 2) ObamaCare is an attempt to monopolize insurance. It says to people, "If you want any insurance at all, you must pay what we tell you". This leads to family policies of $12,000+ /year with $6,000 deductibles. It is essentially a $12,000 tax per family hidden in insurance. Still, this isn't enough to pay for all the promises, but it is a start.

    We see that much of the young are taking their chances and not joining into the tax. The penalty for not having insurance is small compared to the cost of insurance, and the coverage of pre-existing conditions means that many people figure they can wait and get insurance when they need it, after the fact of their injury.

    The Republicans are mostly career politicians with the same incentives. I think they are, as a group, only a marketing arm of the DemoPub party. You can buy the message of the Dems or of the Pubs, but you are going to get the same policies and results. They belong to an organization, the government, which has promised $100 T. They will all have the same policies, in effect.

    This explains Republican actions. Their replacement for ObamaCare is only a crafty variant, with each ObamaCare policy replaced by an equivalent but differently implemented policy. Coverage of pre-existing conditions, kids insured to age 26, and subsidies are all retained. Government meddling through Medicare/Medicaid insure that the rigidities of socialist medicine will keep costs high.

    The solution to medical care is to deregulate it and make all subsidies explicit, not hidden in insurance. This won't happen, because each politician is elected by his base which accepts a particular marketing message, and elected by some independents who are mostly socialist in their view that "people should be helped by the government".

    People won't accept the direct taxes needed to keep the government's promises. It seems that they will accept socialized medicine for all, which saves money by delivering cheap and poor services to the hapless peasants which will have to use that system. Check out the Veteran's Administration version of health care to see the future.

  • Chris

    All the arguing between the Republican plan and the ACA are just discussions about the degree of socialized medicine each proponent wishes.

    There's a solution but it has no chance of happening: repeal all government health care plans and their associated taxes. Repeal all requirements that any health care provider provide health care regardless of ability to pay. Let the free market work to provide health care that real consumers can afford.

  • jd

    I'd imagine that if that proposal was combined with getting rid of socialized defense, it'd pass in a heartbeat. Free markets are great, and the exact arguments used to propose a truly free health care market without government intervention apply to free markets for policing, judical systems and defense. Just imagine the benefits if anyone could buy shares in the nuclear deterrent or as much border protection as they'd like and hire whichever local police force or judges they prefer.

  • Chris

    Those are good ideas too. I like the idea of funding the courts and police by voluntary sales taxes. Transactions would only be protected by law to the extent the sales tax was paid.

  • Nehemiah

    Middle America won't deal with comprehensive immigration until the damn wall is built. They will not be happy with comprehensive healthcare reform until Obamacare is repealed. Build the damn wall and repeal the damned law.

  • Chris

    Andrew's explanation of the insurance as a tax is completely correct - but it is not complete. Much of medical bills are also a tax, in which the private pay patients subsidize Medicaid and some other insured patients. Mediaid pays about 70% of COSTS in hospitals, and facilities like nursing homes. The (fewer and fewer) private pay individuals pay extra to make up for the shortfall. This was confirmed in a newspaper story from a local hospital director. The newspaper story was confirmed in my private conversations with nursing home directors.

    I've also found that if you have medical insurance, you are not the customer of the insurer. You are the product. They sell your business to their preferred providers.

  • fraizer

    The trouble with "pre-existing conditions" is that they sometimes aren't. For example, you pay in to a plan for years, maybe even decades, and then a serious illness arises and the insurance company wants to either cancel you or jack up your rates to the point that you have to cancel yourself. Or, you change jobs which forces a change in insurance companies and the new company wants to exclude your condition.
    There needs to be a mechanism to ensure that insurance companies can't just skim healthy clients and cancel if you no longer fit that category. It seems to me that part of this needs to be policy portability, a no-cancel rule, and premiums structured to cover the risk of future chronic conditions and/or expensive treatments for acute conditions.

  • mlhouse

    Totally agree. The government needs to create regulation that prohibits health insurance companies from cancelling policies of individuals that get conditions and also maintains their risk classifications as to that in which they entered the pool.

    The change job phenomena is a problem with the current system that creates "pre-existing" conditions.

    I favor changing the system of employer provided insurance to individual insurance that has no state border restrictions. This, combined with the regulation change above protecting you from cancellation, means taht you will always be covered by insurance. In fact, I favor individual mandates taht would require each individual to have at least a catastrophic health insurance plan so they cannot pass their healht care risks to other people.

  • Chris

    For a guy who claimed at one point to be a libertarian, I'm surprised you wouldn't be behind repealing 0care.

    Here's an interesting idea, Pre-2009 we didn't have a healthcare system. And post 2017 we shouldn't have one either.