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New GOP plan shows moderate Republicans don’t understand insurance

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I never expected the House of Representatives to vote this week on the new health care plan being floated by the Trump administration.

I had hoped that after all of the debate over Obamacare in the last seven years and the continuing collapse of the exchanges, moderate Republicans would have at least a cursory understanding of how insurance markets work and how they don’t.

Me, so stupid.

Apparently, they still believe that health insurance markets can function when the government forces health insurers to cover people with pre-existing conditions:

Representative Charlie Dent, Republican of Pennsylvania and a leader of the Tuesday Group, agreed that making the plan less palatable to governors — who were major opponents of the plan — and trimming benefits further were not helping to win his vote.

“What they were talking about was not going to get me to yes,” he said, noting that the plan was untenable to many governors, Republican senators and the vast majority of health care groups and representatives even before efforts to make it more acceptable began. “This is just another gratuitous attack from the self-designated chiefs of the purity police on an issue of great consequence,” he said.

I feel like a broken record, but here it is again: Force insurers to sell to consumers after they get sick, and consumers have almost no incentive to buy insurance while they are still healthy. Insurance companies will only lose money when not enough healthy people are purchasing coverage. That’s why the exchanges are failing.

And, no, the House Freedom Caucus was not the purity police. Indeed, the head of the Freedom Caucus, Rep. Mark Meadows (R-N.C.), said his group was open to supporting the new plan:

While [head of the Freedom Caucus, Meadows said “there is no deal, in principle,” he did refer to the proposal as “a solid idea that was offered,” and said his caucus would evaluate its impact on premium costs….

Meadows said that under the White House proposal, states would have the option of applying for a waiver, and if approved, they would be able to opt out of some of the [Affordable Care Act] insurance mandates, including community ratings and the Obamacare essential benefits — the list of benefits that must be covered under any insurance policy, like maternity care, prescription drug benefits, and lab testing, and more.

Though states would have some flexibility to drop some of the essential benefits, Meadows said that the plan preserved coverage of pre-existing conditions and allows children 26 years old and younger to remain on their parents’ insurance plans.

Yes, you read that right.

The “Freedom” Caucus is open to a bill that does not repeal Obamacare and permits state governments to only partially repeal Obamacare.

Health insurance markets would work under this bill since insurers could now underwrite those with pre-existing conditions. Since this would make insurance too expensive for most people with pre-existing conditions, the GOP includes money in the bill so that states can fund programs to help such people.

That, though, is not enough for moderate Republicans.

While many blamed the failure of RINOcare on the House Freedom Caucus, the truth is that if legislation that either repeals or at least allows states to opt out of Obamacare never passes, the fault will lie with moderate Republicans.

The Author

David Hogberg

David Hogberg is a writer living in Maryland. He is author of the book, "Medicare’s Victims: How the U.S. Government’s Largest Health Care Program Harms Patients and Impairs Physicians."

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