Republicans won three elections — including one this past November — promising to repeal President Obama’s signature health law. Yet some GOP senators are proposing to replace Obama-care with … Obamacare.
There’s no other way to describe the “replacement” plan offered by U.S. Sens. Bill Cassidy (R-La.) and Susan Collins (R-Maine). Not only does it leave the Affordable Care Act largely intact — it muddies the political waters as the rest of the party tries to coalesce around a workable replacement for Obamacare.
The Cassidy-Collins plan would retain Obamacare’s most ruinous market regulations, including guaranteed issue, which prohibits insurers from turning away customers because of their health status or history. The bill also keeps Obamacare’s prohibitions on annual and lifetime coverage caps.
These regulations may be popular — but they’re largely responsible for Obama-care’s sky-high premiums.
Cassidy and Collins would repeal Obamacare’s individual mandate, which requires everyone to secure coverage, and its employer mandate, which dictates that all firms with 50 or more employees provide coverage to their workers.
But by scrapping these two mandates — while preserving guaranteed issue — Cassidy and Collins would ensure the complete collapse of the insurance market.
Younger, healthier patients would just wait until they became ill to buy coverage. Only older, sicker, and costlier patients would remain in the insured pool. Insurers would have to choose between raising premiums higher than they already are to cover their costs — or withdrawing from the market.
In other words, Cassidy-Collins sets the stage for an even more severe version of Obamacare’s “death spiral.”
An analysis by the consulting firm Milliman examined eight states that implemented guaranteed issue and limited the ability of insurers to charge older, sicker patients much more than they charged younger, healthier ones — without imposing an individual mandate. In each case, the individual market deteriorated as premiums rose, enrollment fell, and insurers exited the market.
Cassidy-Collins proposes mitigating that death spiral somewhat by letting states auto-enroll the uninsured in a “basic” health plan.
Instead of taxing people for going without insurance, the government would force people into insurance plans “for their own good.” The premiums would, of course, be much higher than the individual mandate penalty ever was.
Then there’s the coup de grâce for a supposed “replacement.” Cassidy and Collins would give states the option of keeping Obamacare — including the online health insurance exchange, the Medicaid expansion, and the individual and employer mandates.
Finally, Cassidy and Collins would give states a third option — sidestepping their legislation entirely and building an insurance market on their own, without any federal funding.
The end result of any of those three paths? A health care system that’s more complicated, still heavily regulated by Washington, and just as costly as Obamacare 1.0.
The plan is also doomed politically. Conservatives won’t touch a “replacement” plan that keeps Obamacare in place — nor should they.
Republican leaders — including U.S. House Speaker Paul Ryan and Health and Human Services Secretary Tom Price — are united behind a free-market vision of health reform. They’d scrap Obamacare’s costly regulations and benefit mandates, let insurers sell their products across state lines, expand access to health savings accounts, and provide a simple age-based tax credit for buying individual health insurance.
The Cassidy-Collins proposal seems to ignore this agenda in a misguided effort to attract votes from Senate Democrats. That’s unlikely to happen.
Republicans will need Democratic votes to get a replacement plan through the Senate. But the last thing they should do is give away half the store at the outset.
Cassidy, Collins, and the other senators backing this plan ought to review “The Art of the Deal.” Donald Trump’s first rule? “Aim very high.” Then, he writes, “I just keep pushing and pushing and pushing to get what I’m after. Sometimes I settle for less than I sought, but in most cases I still end up with what I want.”
By aiming low, the Cassidy-Collins plan ensures that Republicans will get nothing close to what they want.