They just want more subsidies to prop up Obamacare as it is
Robb: Democrats don’t really want to fix Obamacare
By Robert Robb, The Republic
Senator John McCain thanked his fellow senators for their support after he was diagnosed with cancer, and says he plans to return after treating his illness.
Robert Robb: Democrats don’t want to make the insurance available better. They just want more subsidies to prop up Obamacare as it is.
That John McCain showing grit is no surprise doesn’t make it any less admirable.
McCain’s speech on his return to the Senate, following surgery and a devastating diagnosis of brain cancer, was eloquent and obviously heartfelt.
Moreover, I agree with McCain’s call to return to the normal legislative process. Several months ago, I observed that legislating as a process of discovery, rather than of ratification, might be the only way forward on Obamacare.
However, the claim implicit in McCain’s speech, that a bipartisan approach to reforming Obamacare would result in superior policy, is highly doubtful.
The Democratic mantra is: Don’t repeal Obamacare; fix it.
But Democrats don’t really want to fix Obamacare. They just want to prop it up with more subsidies.
We used to have a functioning market
Prior to Obamacare, there was a functioning individual health insurance market in the United States. People could purchase health insurance to cover what they wanted, priced according to risk. Just like all other lines of insurance.
This market didn’t work for everyone. Some people were locked out because of income; some because of preexisting conditions.
Rather than targeted programs to provide access to those not served by the individual market, Obamacare wrecked the market for everyone else.
The government dictated that all insurance policies cover virtually everything, and some things without copays. Catastrophic plans, which are what most people should be buying, were made illegal for those over 30. Medical underwriting was prohibited.
As a result, individual insurance policies today are a bad value proposition for anyone not heavily subsidized or seriously sick.
The reason exchanges are imploding
And that’s the core reason the Obamacare exchanges are imploding. People don’t want to buy a lousy health insurance plan. So, only the sick and heavily subsidized are doing so. As a result, premiums are soaring and insurers are fleeing the market.
Ted Cruz’s proposal was intended to correct this problem. So long as insurers offered a plan that met all the Obamacare requirements, they could also offer plans that didn’t. Those not heavily subsidized or seriously sick could purchase plans tailored to their needs and that were good value propositions, not lousy ones.
According to the Democrats, the fact that the insurance plans offered on the exchanges are lousy value propositions for those not heavily subsidized or seriously sick isn’t a problem. They adamantly oppose any effort to diversify the options in the individual market available to those who do not have access to group health insurance.
Instead, they are interested only in stabilizing the Obamacare exchanges for insurance products that fully meet all the Obamacare mandates.
Why were insurers leaving before?
They dismiss rising premiums on the grounds that 80 percent of those purchasing policies on the exchanges receive federal subsidies and pay less than the sticker price. Tough luck to the 20 percent paying full price. Or those going without insurance because the policies are lousy value propositions and they aren’t eligible for the subsidies.
According to Democrats, instability in the Obamacare exchanges has been created by uncertainty over whether the Trump administration and the Republican Congress are going to continue with one of the subsidy programs, underwriting the cost-sharing costs of those making up to 250 percent of the federal poverty level.
That doesn’t explain the fleeing insurers and rising premiums when the Obama administration was still shoveling that money out the door.
Can we make insurance worth buying?
The Center for American Progress, a liberal political organization, proposes yet more subsidies for high-cost enrollees.
Jason Furman, former economic adviser in the Obama administration, calls for a government insurance program in areas with no or only one insurer. And a higher penalty for not purchasing the lousy insurance offered on the exchanges.
Nary an idea about making the insurance actually worth purchasing.
It’s worth remembering that Barack Obama actually opposed the individual mandate as a candidate in 2008. It was a principal difference between him and Hillary Clinton.
The 2008 Barack Obama said the goal should be health insurance that people would want to buy.
Too bad that guy didn’t stick around.
Robb at robert.robb@arizonarepublic.com.
