What We have is RINO-Care: A more insolvent version of Obamacare ... except this time GOP owns it

Conservative Review ^ | 03/07/2017 | Daniel Horowitz

[SeekAndFind]

The first thing to understand about the GOP healthcare bill is that it is not merely Obamacare-lite or a bad “replacement” bill. It doesn’t repeal the core of Obamacare in the first place. In fact, the few parts that it repeals or tweaks within a few years will actually intensify the death spiral of Obamacare when mixed with the core regulatory structure, exacerbated by the subsidies that they do keep. And this time, the GOP will own it politically. All of it.

The most dangerous myth about the GOP plan is that it repeals Obamacare. At least if GOP leadership would be honest and say they are too scared to repeal the ACA and are just tweaking it a few years from now (after the death spiral is made worse), then we can blame the Democrats for voting for it. Now that a bill codifying Obamacare in the worst possible form is being sold as “repeal and replace,” Republicans have bailed out Democrats from their most toxic political issue without securing a single concession.

Regulations, spending, mandates, subsidies, and taxes

The basic structure of this plan is what I outlined last week after the first draft was leaked to the media. There is no discussion of lowering prices, fostering a revolution of choice, competition, portability, cost-consciousness, or breaking down the barriers between consumer and provider. That is because most of the regulatory structure and the exchanges are left in place. 

There is no innovation, and no way to lower costs. While some of the regulations are tweaked with more flexibility, the 800-pound gorilla in the room — guaranteed issue mixed with community rating (which is responsible for almost all of the premium hikes) — is left in place. Nor does this bill repeal the mandated essential benefits, which require insurers to cover a specific number of people and sex change operations, maternity care for men, etc. 

And even the repeal of actuarial value “metal” requirements (platinum, gold, silver, bronze) — the most positive of the outlined changes — would not take place until the 2020 plans.

Amazingly, while the “American Health Care Act” blows up the insurance market in order to mandate coverage of the sick, it still throws a whopping $100 billion at states in order to further subsidies to the poor and the sick (on top of Medicaid expansion and exchange subsidies).

… the GOP bill is actually worse than Obamacare for two reasons: 1) It will exacerbate the death spiral of fiscal insolvency; and 2) It will destroy the employer market.

Furthermore, the existence of the exchanges and the subsidies being steered to those exchanges will force insurers to continue competing for government-run health care that is actuarially insolvent. This continued structure will ensure that startup companies — which lack economies of scale to operate within this rigid (albeit slightly relaxed) structure — cannot enter the market. That is the core of what ails the health care industry. 

On top of leaving the regulatory regime and the rigid exchanges, this House bill replaces the income-based subsidies with age-based subsidies – ranging from $2,000 for younger people to $4,000 a year for older enrollees, and as much as $14,000 for a family. It is a massive new entitlement for middle-income and lower-income Americans. It would apply in full for families earning up to $150,000, and then phased out $100 per thousand dollars earned over that threshold. Thus, a family could theoretically get some sort of subsidy well into the $200,000-plus income level. 

As for Medicaid, the draft plan grandfathers in the entirety of the Obamacare expansion. Worse, it doesn’t freeze future enrollment for another two years, which will incentivize states to massively expand Medicaid before 2020. It also throws another $10 billion to states that never expanded Medicaid. 

Between the regulatory structure, subsidies, and Medicaid expansion, this bill is Obamacare. Literally. 

But, in fact, the GOP bill is actually worse than Obamacare for two reasons: 1) It will exacerbate the death spiral of fiscal insolvency; and 2) It will destroy the employer market.

The one part of the bill that does actually immediately repeal an Obamacare provision is the immediate elimination of the individual mandate and the employer mandate that requires individuals to purchase and employers to provide health insurance. 

By leaving the price-hiking regulatory and subsidy structure in place, yet repealing the individual mandate, this bill will exacerbate the death spiral because people like myself — who are getting crushed with ridiculous premiums — will dump their insurance. Likewise, employers who are now forced to provide insurance will quickly dump their employees from their plans. 

This is what happens when Republicans focus on coverage numbers at the expense of lowering costs through the regulatory structure. They achieve neither. While the individual mandate is replaced with a provision mandating that insurance companies charge individuals who dropped their insurance an extra 30 percent when reenrolling, that provision doesn’t take effect until 2019. The adverse selection and death spiral will be terminal by then ; the employer mandate is not replaced at all. 

Also, the 40 percent Cadillac tax on more expensive health plans is delayed from 2020 until 2025, but not repealed.

Thus, House Republicans have replaced the notorious taxes, regulations, subsidies, and mandates of Obamacare with … taxes, regulations, subsidies, and mandates. Except, this time, Republicans will own it. And that is exactly what the lobbyists for the status quo wanted. 

… this is one of the rare instances when it’s better to do nothing if they don’t want to do the right thing. There is no upside for a conservative to sign onto this, and only downside.

Now that Republicans will have their reputation tethered to Obamacare, they will be forced to consistently continue the hospital bailout program, otherwise known as Medicaid expansion. They will constantly be forced to re-up the individual and corporate cost-sharing subsidies to make up the gap from getting rid of the employer and individual mandates.

This is not a half a loaf, it’s a poisonous loaf

House leadership will tell its members, “Look, this isn’t perfect, but isn’t it better to take a half a loaf than no loaf at all?” In reality, this is a poisonous loaf. Again: It doesn’t repeal Obamacare, will exacerbate the death spiral, dump people off employer-based insurance, and force Republicans to own it this time. 

Yes, this is one of the rare instances when it’s better to do nothing if they don’t want to do the right thing. There is no upside for a conservative to sign onto this, and only downside. Also, remember that the Senate GOP is even more liberal than the House GOP, so this is the opening bid that will invariably get worse.

Big picture: The result of this bill is that insurance companies will continue to look to government to regulate and subsidize. Thus, insurers will continue to run health care based on government and lobbyists to keep the gravy train rolling, and box out competitors instead of being forced to compete directly with new insurers for consumer business.

Under the guise of promoting expanded coverage rather than decreasing costs, this plan will exacerbate both. Well done, Republicans. 

If nothing else, this is a vindication of those who warned during the primaries that Republicans were lying to us all along. 

It’s time for President Trump to lead, or this is over.

[Alberta's Child]

Competition across state lines is not likely to happen, even if it makes a lot of sense. The insurance industry is regulated by the states as a result of a landmark U.S. Supreme Court decision. Basically, the Supreme Court ruled that an insurance policy is a contract, not a product or service that would come under Federal oversight through the interstate commerce clause of the U.S. Constitution. Contracts are governed by state contract law, not Federal law.

[Alberta's Child]

From my home I can walk less than a mile to the office campus for a major medical group in my state that refuses to take Medicaid patients. Their costs to people like me who use private insurance aren't much different than what my insurance carrier would pay at the hospital in the next town.

I'm not saying you're wrong. I'm suggesting that the number of Medicaid enrollees with exorbitant health care costs is much smaller than the enormous demographic group I described that has grown considerably in recent years.

[ForYourChildren]

Federal control of healthcare is ILLEGAL!!

Headlines on 03/07/2017 from “conservative” sites:

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Rand Paul: House GOP Healthcare Plan Will Not Pass Because it’s Obamacare-Lite
http://www.washingtonexaminer.com/rand-paul-house-gop-healthcare-plan-will-not-pass/article/2616645

RINOcare Will Continue to Drive Up Costs With Subsidies, Penalties, and Mandates
https://www.forbes.com/sites/theapothecary/2017/03/07/house-gops-obamacare-replacement-will-make-coverage-unaffordable-for-millions-otherwise-its-great/#7861df1a37fd

Obamacare 2.0 is a gift to illegals. Oh, and GOP? You LIE.
https://www.conservativereview.com/commentary/2017/03/obamacare-2-point-0-is-a-gift-to-illegals-oh-and-gop-you-lie

RINOcare is NOT Repealing Obamacare; And the GOP Owns It
https://www.conservativereview.com/commentary/2017/03/rino-care-a-more-insolvent-version-of-obamacare-except-this-time-gop-owns-it

5 Serious Problems With RINOcare
http://www.dailywire.com/news/14161/ryancare-5-serious-problems-republican-replacement-ben-shapiro

Trump’s Big-Government Fixes are Giving Conservatives Indigestion
http://www.washingtonexaminer.com/trumps-big-government-fixes-are-giving-conservatives-indigestion/article/2616273

Dana Loesch: ‘We Didn’t Protest Obamacare for 8 Years to Get Obamacare 2.0 From Congressional Republicans’
http://twitchy.com/brettt-3136/2017/03/06/midterms-come-fast-gop-dana-loesch-slams-house-republican-rollout-of-obamacare-2-0/

Leading Conservatives TRASH Obamacare Replacement as RINOcare, Obamacare-Lite, Obamacare 2.0
http://politistick.com/leading-conservatives-grade-obamacare-replacement-big-fat-f/

Conservatives Dub Obamacare Replacement Obamacare 2.0, Obamacare-Lite
http://www.washingtonexaminer.com/some-conservatives-pan-obamacare-replacement/article/2616629

RINO House Leadership Announces Obamacare 2.0
http://ijr.com/2017/03/818591-gop-reveals-its-highly-anticipated-plan-to-replace-obamacare-here-are-the-highlights/

House Republicans’ Obamacare Plan Lacks Party Buy-In
http://www.realclearpolitics.com/articles/2017/03/07/house_republicans_obamacare_plan_lacks_party_buy-in_133272.html

Some Conservatives Balk at Obamacare Replacement
http://www.realclearpolitics.com/articles/2017/03/07/house_republicans_obamacare_plan_lacks_party_buy-in_133272.html

[Teacher317]

The Stupid Party caves and cowers to the Evil Party once again!!! GRRRRRRR!

[GOPJ]

The problem with ‘health care’ is it's a protected elitist monopoly. Enough to make Madeoff blush...

If car mechanics had the same power they could charge ten thousand dollars to fix brakes. If breaks fail your family dies... so they could get away with it. Right? Just like doctors.

That's what doctors are doing. Then trial lawyers play doctors against their patients for medical lotteries and health insurance companies sit in between it all. Taking equally from doctors, hospitals, patients, and citizens.They're all in on the scam.

Health care would be better and cheaper if CARE was computerized. AND not just billing... for almost all levels of care.

[Hugh the Scot]

Would the benefit be any different than if the employer paid for the employee's groceries?

Well, yes. We actually had an arrangement like that at one time, it was called slavery.

You might call it "theft," but taxing the employee for the plan would be -- well, taxation.

That's what I said, theft.

So what? For some of my insurance -- through a professional association, for example -- I have access to an insurance pool that's much larger than my employer's insurance pool.

And you'd like the government to take that option away from corporations and their employees who don't otherwise belong to a professional association?

Yes. I'm not sure what this means. Are you suggesting I'm opposed to any of this?

You seemed to be suggesting that the government take some non-specific action to enforce your point of view on employer subsidized insurance. Did I misread that?

[Alberta's Child]

Well, yes. We actually had an arrangement like that at one time, it was called slavery.

Exactly. I came across an article in the last couple of weeks that said record numbers of Americans are staying in jobs they don't like because they need the insurance coverage. Sound familiar?

And you'd like the government to take that option away from corporations and their employees who don't otherwise belong to a professional association?

I don't want the government to take anything away. I want the government to treat all of this equally. My disability insurance premiums should be subject to the same tax treatment as my medical insurance premiums -- one way or another. And medical costs should be subject to the same tax treatment regardless of how they're paid. If I pay $10,000 out of my pocket for a medical procedure and you get the same procedure done by a doctor who is paid by your insurance carrier, then we should both have the same tax treatment.

Also -- look at the grossly unfair tax treatment of employer-paid medical insurance plans vs. individual plans. If your employer pays $6,000/year for your coverage, it's 100% tax deductible. If I pay $6,000/year for my own, it's not. What planet am I on where anyone -- especially a conservative -- thinks this actually makes sense?

You seemed to be suggesting that the government take some non-specific action to enforce your point of view on employer subsidized insurance. Did I misread that?

No. See my prior point. The only action I want the government to take would be to get the hell out of the health care business entirely -- and that includes eliminating anything in the tax code related to health care costs, too.

[Hugh the Scot]

"The only action I want the government to take would be to get the hell out of the health care business entirely -- and that includes eliminating anything in the tax code related to health care costs, too."

That will not accomplish this:

"Destroying the employer market will do more to "fix" health care in this country than anything else that has been discussed."

Or this:

"This link between employment and health coverage should be severed ASAP."

The tax situation may encourage corporate participation, but it's not the key ingredient.
Maybe I didn't misread the original post after all.

[Alberta's Child]

I didn't mean the government had to destroy the link between employment and health care by outlawing it.

It's funny how we never have to discuss out-of-control costs in health care procedures like elective cosmetic surgery and laser eye surgery. Those procedures are subject to normal market forces of supply and demand -- and have gotten much less expensive over time. The reason for this is simple: Insurance plans don't cover them, and people pay for them out of their own pockets.

Imagine that.

[cowboyusa]

Rand Paul's bill is the one, it breaks the power of the insurance companies.

[Hugh the Scot]

The market could and would rectify this XYZCare issue as well, If the politicians would stay out of the way...

Every attempt by our government to fix a problem creates a larger and more intractable one.. and I expect that this will be no different.

[Alberta's Child]

Maybe so. The problem with “the market” is that any industry that is built on third-party payments does not operate under normal market forces because the buyer and seller don’t deal with each other directly. And in this case it really doesn’t matter if the “third party” is a government agency or an insurance company.

[Bryanw92]

>>Now Republicans have their fingerprints on it.

What is a Republican in Washington? They are just the other side of the Progressive coin who, when using the one-two punch of regulation and globalization to knock out the Middle Class, prefer the right fist over the left.

[Baynative]

I can’t understand why so many people have come to the point where they think government has to make rules for how we choose to take care of ourselves. I haven’t heard a good argument as to why letting the free market rule is a bad idea.

It seems simple to me that if I want to pay cash for my simple services like shots and physicals and maybe the treatment of a flu or broken arm, I would be better off doing so and doctors or clinics would be more competitive in seeking my business.

To follow that; I am in good health, don’t smoke or drink to excess and exercise regularly. So when I want to go out and shop for catastrophic insurance those providers would also have a competitive approach to wanting my business, because the chance of me costing them money is lessened.

Maybe I prefer to take my chances and not even buy catastrophic coverage. That’s should also be up to me, just as it is to not carry flood insurance since I live on a hilltop.

[samkatz]

Eight years ago the GOP fought the creation of a new entitlement and called out Obama for his big lie that of more health care for everyone while driving costs down. They lost in the Congress and lost in the SCOTUS thanks to Roberts. At the time many conservative pundits predicted that once you create a new entitlement you can’t take it back. I was very skeptical of Trumps promise to give everyone a “beautiful” new plan that would cost less. It is simply voodoo economics. Not possible. He and the GOP are backed into a corner where they pledged not to take anything away. The idea if getting reelected outweighs greater principles like free enterprise etc. Trump has out Obama ed Obama with healthcare. I would be happy to see him secure the border and get many Federal judges on the bench. I do not belI’ve he or the GOP congress can meet the false goal of improving Obamacare without bankruptING the nation

[Red Steel]

There is an amendment process to get rid of some of the stuff in this like the Cadillac tax.

Also may not have been mentioned here is that Trump needs at least a framework of repeal of ObamaCare and replace to do his new tax reduction plan hinges on it.

[Captain Peter Blood]

Therein we have the Big Lie all along.

The Republicans have had years to come up with a winning alternative, yet came up with nothing. Conservatism at it's finest hour, against Obamacare but no realistic competing alternative.

Trump could have been the real winner an innovator here by instructing his AG to enforce the Sherman Anti-Trust Act and Wright-Patman on the medical monopolies and insurance companies. Yes we would have had a 10 15% disruption in the GDP and a recession, but the result would have been a drop of at least 80% in Health Care Costs, an opportunity to get rid of the Deficit and Pay Down the Debt with money left over and a renewed vibrant economy. But it will not happen. We are going to have the Fiscal Train wreck and coupled with the Interest on the Debt a blown up budget. Not to mention the real problems for the states and their paying for their share of the Medicaid Expansion. We are all screwed and will be seeing reduced benefits on everything.

[i_robot73]

>
And what about the other provisions of the law that will be left in place for a future democrat administration to abuse?

2600 pages worth!

GOP is worthless! They let a paid for group protesting town halls scare them into going back on their voters!!

So F’ing sick of these cowards
>

I hope no one here is naive enough to BELIEVE they were ‘scared’ into this position. They’ve been hands-out, promising they were the 2nd coming re: repeal of O’Care.

The only thing they are scared of....is actually having to do what they say a/o doing ‘SOMETHING’ and running for the hills for the ‘18 elections.

Only cowardice I see is upholding their oath of office; none of this is even CLOSE to Constitutional nor Free Market.

[Hugh the Scot]

Again, then...

Who do you nominate to decide who can be “in” the market, and who can’t?

[Alberta's Child]

I'm not sure what you mean.

True market forces only exist when you have a buyer and a seller. That's not what we have with medical care in the U.S. today. What we have is a patient who doesn't pay the bills and a doctor who gets paid by an insurance company or a government agency. Neither one of them has any incentive to conduct himself in a way that would reflect actual market forces. The patient has no incentive to be judicious about the care he receives, and the doctor has no incentive to keep the patient happy.