JONATHAN COHN MAY 17, 2012
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“Repeal and Replace"—the slogan is as meaningless as it is catchy. The Republicans have zero intention of replacing the Affordable Care Act with a law that would make insurance available to everybody, regardless of income or pre-existing condition. That was obvious before an article that appeared in Politico on Thursday. It’s even more obvious now.
The story, by Jake Sherman and Jennifer Haberkorn, focuses on how Republicans would react if the Supreme Court overturns part or all of the Affordable Care Act—or, failing that, if Republicans get full control of the federal government after the November elections. It’s consistent with what other journalists, including The Hill’s Sam Baker as well as Robert Pear and Jonathan Weisman of The New York Times, have reported: The Republicans won’t try to pass sweeping reforms. At most, the Politico story explains, Republicans might
draw up bills to keep the popular, consumer-friendly portions [of the Affordable Care Act] in place — like allowing adult children to remain on parents’ health care plans until age 26, and forcing insurance companies to provide coverage for people with pre-existing conditions.
That last part (the one I’ve bolded) might sound significant. And it would be if Republicans were seriously thinking about that goal. But they almost surely aren't. Most likely, they are probably discussing an idea that Mitt Romney and other leading Republicans have been promoting: Making sure that people who have pre-existing conditions and already have insurance can keep it, even if they switch jobs.
That distinction is critical.
For one thing, lots of people end up temporarily uninsured because they lose their jobs or get divorced, for example, or because they can’t keep up with premiums. A plan guaranteeing coverage only for people who have it already would not help them. More important, making that sort of guarantee, on its own, turns out to be very difficult. We know this because the federal government already tried it, in 1996, when President Clinton signed the Health Insurance Portability and Accountability Act (HIPAA).
The impetus for that law was an effort to salvage something, even something modest, from Clinton’s failed attempt at comprehensive reform. But the law was not very effective. Karen Pollitz, who knows more about the individual insurance market than just about anybody and who now works at the Kaiser Family Foundation, wrote about HIPAA’s problems in 2005:
HIPAA requires nongroup coverage to be offered to eligible individuals … However, there is no limit on what insurers can charge under HIPAA. Some states regulate HIPAA premiums, but in those that do not, the cost can be prohibitive. HIPAA also does little to regulate the content of coverage, leaving the door open to insurers to offer bare-bones policies. In addition, HIPAA notice requirements are weak, making it hard for people to know about this protection.
Could the Republicans decide to bolster HIPAA, by closing these loopholes and genuinely requiring insurers to cover people with pre-existing conditions? Sure, but it would mean significantly strengthening regulations on the insurance industry. And if the regulations were successful, then the mix of people seeking insurance would change: People with serious medical problems would be more likely to enroll, since coverage would finally be available to them, while people without medical problems would be less likely to enroll, since they could always wait until they were sick. Premiums would rise, inducing more healthy people to drop coverage and eventually sending insurers into what’s known as the “adverse selection death spiral.” The only way to stay out of the death spiral would be to create a system that also included some combination of subsidies and financial penalties for non-enrollment—i.e., a mandate.
Getting the picture here? As economists and health policy experts have said all along, the only way to make coverage available to everybody, short of creating a single-payer system, would be to recreate Obamacare or something similar to it. And that's not going to happen. According to follow-up that Sherman filed with Politico on Thursday, conservatives were furious that House leadership would contemplate replacing the Affordable Care Act with anything that looked remotely like it. In response, aides to Boehner quickly communicated the Speaker’s intention to “knock down” the rumor of such intentions.
For more on this story, by the way, see Jonathan Bernstein and Brian Beutler, both of whom were all over it on Thursday.
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6 comments
From the Sherman & Haberkorn article: “If all or part of the law is struck down, we are not going to repeat the Democrats’ mistakes,” Boehner said...“We have better ideas on health care — lots of them. We have solutions, of course, for patients with pre-existing conditions and other challenges.” Wish the Repubs would share these wonderful ideas with the rest of us. (Must be keeping them secret, so they won't be stolen by anyone, like some envious developing nation.) In the meantime I have two t-shirts, yet unworn, hanging in my closet. One has a box checked off next to the phrase "Healthcare Reform". If the ACA is upheld, I'll put that one on right away. The other is black, & bears the sloga: "Healthcare Reform - Still a BFD". Guess I'll wear that one if the court rules adversely on the ACA.
- Haole45
May 18, 2012 at 1:46pm
JC writes: " The only way to stay out of the death spiral would be to create a system that also included some combination of subsidies and financial penalties for non-enrollment—i.e., a mandate. " These are sticks. What about carrots? Why not make care a function of how long you've had insurance? For example, coverage on pre-existing conditions happens after you've paid in for 6 months and then even that is covered at only 60%. And after X months of continuous coverage, you get a free annual physical And after Y months, you get a reduction on drug costs. If you let coverage lapse, you start over again. It's a shame we missed such an opportunity to find the common ground on health care and make something work. Think about how much energy was wasted on this this first effort.
- seattleeng
May 18, 2012 at 8:03pm
seattleeng: "It's a shame we missed such an opportunity to find the common ground on health care and make something work." I'm still waiting for the proposal that would have gotten Republican votes. Remember how some Republicans supported the mandate until it was in an actual bill? So I remain intensely skeptical that there was common ground to be had. There's certainly little evidence, since I never heard any Republican say "Look, if you include X, then I'll vote yes." Instead, there was compromise after compromise with no votes in return. Which is really Cohn's point: there was no serious Republican proposal, and there still isn't any. And it's not like they haven't had time to come up with one. Even now, I believe states can get a waiver out of the ACA if they can come up with their own plans that would provide the same minimum coverage as the ACA. Yet no state that is completely controlled by Republicans has done so. It would be better if they just said they're fine with a society where people die because they can't get insurance and families go bankrupt because someone got sick. At least that would be an honest approach. But the present position of "we favor some kind of universal coverage but we won't tell you what it is" is a charade.
- dsimon
May 20, 2012 at 11:39pm
"repeal and replace" another cliche of the Right regarding Obamacare. Except we never hear anything beyond "repeal and replace" except static on the airwaves. And while the GOP claims they have "lots of ideas" I suspect we won't ever know what those great ideas are because the last time a great GOP idea was put forth regarding healthcare and the Dems embraced it, well...we end up in the Supreme Court talking about broccoli.
- singlspeed
May 21, 2012 at 12:16pm
Seattleng, why do you think your incremental coverage proposal (despite, I assume, full premium payments) is a good idea? Or for that matter, fair? If you want to address adverse selection, compulsory coverage requirements should address that problem. But what if someone suddenly contracts a disease or develops a critical condition (both previously unknown)? The person should be on the hook for the entire cost of treatment? When a person purchases compulsory auto insurance (compelled by state and a lender) the policy is in full effect. For instance if I purchase a car in March 201X and it is stolen in May 201X my comprehensive coverage isn't incremental.
- tec619
May 22, 2012 at 12:21am
"It's a shame we missed such an opportunity to find the common ground on health care and make something work. Think about how much energy was wasted on this this first effort."
Yes, it is a shame the Republicans took this opportunity to grand stand infront of their constituents and prove their conservative bonafides by making all kinds of political hay instead of working with the that Kenyan who stole the election from "Real Americans" (tm) to move this country forward.
- GSpinks
May 22, 2012 at 3:42pm