Make Insurance Affordable Again

Republicans may take another stab at getting rid of ObamaCare, better called the Unaffordable Care Act. But most Americans will hold their applause until they find out whether this next attempt will improve their situation, or make insurance even more unaffordable and further restrict their ability to even have a say in their choice of doctors and treatment options.

RyanCare, better called ObamaCare 2.0, would have led to another 15 percent to 20 percent increase in premiums, according to the Congressional Budget Office (CBO). Based on CBO’s history, that’s probably an underestimate. A weatherman with such unreliable forecasting would undoubtedly get fired.

How on earth could the GOP bill be more expensive? And why in the world would the Republicans try to ram it through anyway?

The Ryan bill would have repealed the individual mandate—the tax penalty for being uninsured (being fined for not buying a government product). But, if people didn’t want to buy the Obamacare then, why would they want to buy it now, when it’s even more expensive, and there’s no penalty for refusing to buy it?

What do people normally do when they experience sticker shock? They snicker, “No, thank you!” and jolt past the overpriced car loaded down with expensive options that they don’t want.

In a normal free market, people can look for a less expensive car or a different dealer. But ObamaCare outlawed the insurance products that millions of people had and were satisfied with. No more “bare bones” policies for instance. The leather seats and built-in entertainment “option” are no longer optional. And no heading to the dealer across the street—or the state line—who’ll make you a better deal. The government has fixed the prices, the products, and the dealers.

You may be shocked to hear that “free-market” Republicans didn’t fix that. They’ll let you do without the car, but you can’t get a cheaper one. After all, the Obama car features are immensely popular.

They are certainly popular with certain groups:

• People who don’t have to pay the full price for the car because of the taxpayer subsidies, called tax “credits,” that are given even to people who don’t owe taxes, paid for by taxes from people who don’t get the credits;
• Individuals who get the equivalent of a Lexus for the price of a Honda because of some pricing rules that work like community rating for insurance;
• People who “need” the entertainment option that those who abstain from illegal drugs, excessive alcohol, or promiscuity manage to live without;
• The manufacturer of the expensive car;
• The suppliers of the options;
• Twenty-six-year-olds who are still dependent on their parents.

The Republican leadership is so far adamant about retaining the “guaranteed issue/community rating” features that always and everywhere send premiums into the stratosphere. This decision means insurers can’t price their product by risk level. They can’t “discriminate” against bad risks. So the good risks say, “No, thank you,” and premiums go higher still.

Ann Coulter suggested a simple option: Sell insurance on a free market. She just wants coverage for things like broken bones, cancer, and heart attacks. She does not want to pay for sex-change surgery, infertility treatment, or drug rehab. There are probably many millions of Americans who would snap up such policies. Insurers could develop a whole range of innovative products—such as health status insurance or premier cancer coverage for low-risk people who unexpectedly get cancer.

The result would probably be an explosion in the availability of insurance products, and a dramatic decrease in the price of medical goods and services—once they are not bundled into enormous insurance premiums but have to show their worth to consumers who have choices. Disruptive innovation and creative destruction would abound.

There would no doubt be some people with pre-existing conditions, through no fault of their own because of decades of misguided government policy. But when problems come up, we should find targeted solutions, instead of wrecking the insurance market, grossly inflating the cost of all medical care, and driving out doctors and facilities that can’t cope with the tsunami of regulations that attempt to substitute for the natural adjustments of a free market.

The greatest distress would be felt not by patients and taxpayers but by third party parasites—the swamp dwellers siphoning off a huge cut of some $3 trillion passing through the third-party payment system each and every year.

The suggested compromise between conservatives and “moderates” is to allow states to apply for a waiver of the guaranteed issue/community rating rules. In other words, permit islands of freedom. We might see what such a controlled experiment would show.

Republicans must honor their word to repeal Obamacare. Retaining its inherent flaws while upping premiums and creating a new subsidy will prove as effective as painting it red, boosting the sticker price, and adding spinners and neon. We must address the entrenched flaws that keep the costs up. We must continuously remind ourselves that the goal is survival of our patients, not the survival of big insurance corporations, political careers, and special-interest parasites. We need an ambulance, not a Monster truck, and most importantly we must drain the swamp.