GOP Shouldn’t Take Democrats’ Bait On Repeal And Replace

Senate Minority Leader Charles Schumer, D-N.Y., says he’s willing to support a GOP replacement for Obamacare — “so long as it covers as many people as the ACA.”

How magnanimous. But his remarks are politically clever. He’s trying to dictate that the success or failure of the GOP’s health reform effort should hang solely on how many people it covers.

That may sound fair, but as Obamacare itself has proved, even boosting the small number of people with exchange coverage is meaningless if that coverage doesn’t actually get them quality, affordable care.

Republicans shouldn’t take Schumer’s bait. The GOP’s best replacement proposals would reduce premiums, expand the number of insurance choices available to them, and save taxpayers $1 trillion over the next decade.

If Republicans make insurance more affordable by eliminating costly mandates and regulations such as Obamacare’s Essential Health Benefits rule, coverage rates will take care of themselves.

According to the Obama Administration estimates, only 13.8 million Americans purchased an exchange plan during the open-enrollment period that ended on January 31. But even that modest number is expected to fall over the course of the year as exchange enrollees drop out of their plans.

In truth, Obamacare’s much-vaunted coverage expansion was, for all intents and purposes, simply an expansion of Medicaid. Just over 18 percent of Americans under 65 years of age were covered by a public health program in 2007. By 2015, that figure had risen to well over 25 percent, thanks largely to the Obamacare-fueled growth of Medicaid, which sent enrollment soaring to more than 74 million – even though 19 states rejected that expansion.

Over that same period, the share of Americans under 65 with private insurance fell from 66.8 percent to 65.6 percent.

Shifting more Americans onto Medicaid — one of the most expensive, wasteful, and ineffective healthcare delivery systems in the United States — is no cause for celebration. In 2016, for instance, an incredible 10.5 percent of federal Medicaid spending — $36 billion – were “improper payments” resulting from fraud, waste, or errors of some kind, the Government Accountability Office recently found.

Overall spending on the Medicaid entitlement is expected to balloon to $957.5 billion by 2025, according to a recent report compiled by the Obama administration’s Department of Health of Human Services.

That same report warned that such growth could “displace spending on other important programs, or additional taxes or other revenue sources could be required to fund Medicaid.”

In other words, the program is swallowing up an ever-greater share of federal spending. The Obama administration not only accelerated this unsustainable growth — it waited until leaving office to reveal the true extent of the damage it had done.

What do we have to show for all of this spending?

According to one authoritative study, not much. A randomized analysis of Oregon’s Medicaid program found that Medicaid beneficiaries experienced no significant health improvements compared to those who had no coverage at all.

Republicans have higher hopes for healthcare reform than just boosting coverage stats. Namely, they intend to ensure that high-quality coverage — not ineffective, expensive public insurance — is available to all who need it at an affordable price. More than that, they favor policies that would accomplish this goal while saving the government money.

The best examples of Republican reform packages are House Speaker Paul Ryan’s “A Better Way” health plan and incoming Secretary of Health and Human Services Tom Price’s “Empowering Patients First Act.”

Both plans subsidize insurance with age-based tax credits, legalize interstate insurance sales, provide federal funding for state-based high-risk pools, and lift the draconian federal insurance regulations imposed by Obamacare. They also roll back Obamacare’s Medicaid expansion and fund the program through federal block grants designed to encourage states to keep their own programs’ costs under control.

On all the measures that count, these policies represent a vast improvement over Obamacare. The Center for Health and Economy recently analyzed a reform package similar to both the Ryan and Price plans and estimated the savings to federal taxpayers at $1.13 trillion by 2023, compared to Obamacare.

Average premiums on the individual market, meanwhile, would fall by as much as 25 percent. Thanks to these more affordable premiums, coverage rates on the individual market would actually increase.

The analysis does predict that the number of people with insurance would drop by roughly 6 million people. That amounts to less than 2 percent of the population.

But in a post-Obamacare world where affordable coverage is easier to come by — whether through the private market or state high-risk pools — those who remain uninsured wouldn’t do so for want of access.

In fact, the putative drop in the insured rate would be almost entirely due to the roll-back of Obamacare’s Medicaid expansion. And as Oregon’s experience shows, no coverage may be better than Medicaid.

Nevertheless, the Democrats would almost certainly pounce on this slight reduction in coverage to condemn the GOP plan as a step backwards from Obamacare.

This is an astoundingly weak argument against a plan that expands access to quality, affordable health insurance while saving taxpayers over $1 trillion. The only way that such an attack can succeed is if Republicans accept the misguided premise that coverage statistics are all that matters. It is time for the GOP to move forward with a single replacement plan that provides affordable, quality care for all Americans who need it. Delay or “repair” are not options that the voters will be happy with.

Nothing contained in this blog is to be construed as necessarily reflecting the views of the Pacific Research Institute or as an attempt to thwart or aid the passage of any legislation.

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