Among the most promising things about the election of Donald Trump to the presidency, in conjunction with a Republican-controlled Congress, was the long-awaited realization of the repeal of Obamacare — the expensive government takeover of health care that was President Obama’s signal “achievement” — which drove up health insurance premiums and deductibles, priced millions out of the health insurance market, cost taxpayers billions of dollars and instituted a Medicaid expansion that will be the fiscal undoing of several states in the nation, including Colorado, if not reversed and accompanied with serious reform.
The failures of Obamacare are clear to most, and plentiful. The law was built upon faulty and myopic economic theories which ran headlong in to a wall of reality. So repeal — and replacement with a plan based on a more realistic economic model — was not merely fodder for campaign rhetoric, but a political and economic necessity, which many of us hoped would come swiftly to fruition once the necessary pieces were in place.
The result — the American Health Care Act — has been disappointing to say the least.
The AHCA fails to meet the basic, initial requirement for replacing Obamacare with an affordable, patient-centered, economically sound approach — that is, to first fully repeal Obamacare. Unlike efforts passed in previous years by the Republican Congress and vetoed by President Obama, the AHCA falls far short of doing what is probably the most important single thing the federal government could do to improve health care in America — disestablishing the most economically harmful health care law ever passed in this country.
Rather than tearing down the rotting structure, clearing away the debris, and preparing the ground for a more structurally sound framework, the AHCA merely attempts to make “improvements” to a crumbling and unstable foundation. Predictably, the ultimate results will be the same.
The core problem with Obamacare, as with other statist approaches to health care reform, is that it fails to account for the real drivers of escalating health care costs, namely the artificial increase in demand caused by the disconnect between what health care actually costs to provide, and what is paid at the point of service. Subsidization of any service increases use of that service, and when the subsidy is insufficient to pay for the delivery, costs rise exponentially elsewhere in the system.
Rather than arresting the real drivers of cost in health care, Obamacare exacerbated them. Sadly, AHCA does little to reverse this. The slew of misguided insurance regulations which drove up premiums for the roughly 25 million Americans not receiving subsidized or government-provided health care, for instance, remain largely in place under the current proposal. At the same time, new subsidies are being proposed to try to mask the problems caused by the overarching regulations.
Just as troubling, another critical hallmark of Obamacare — the Medicaid expansion — is not being reversed. In fact, states are being given additional incentives to sign even more people up for Medicaid, a foolhardy proposition which will have severe and enduring financial consequences for state governments which buy into the flawed logic of expanding the Medicaid rolls. Nor is there much sign of a commitment to substantive and comprehensive Medicaid reform, an absolute necessity if we as a nation are to be serious about fiscal sustainability.
Needed conservative reforms — those which will make insurance and care more accessible to all by actually reducing health care costs — are either absent or given short-shrift. Real Medicaid reform, elimination of the tax-preferred status for employer-provided plans, Health Savings Accounts and malpractice insurance reform all need to be more central to the discussion than how to simply make a bad law less bad.
To be fair, there are some good ideas in the Ryan plan, which is part one of a proposed three-part process. But the point is that even good ideas will not fix much if they are built on a poor foundation. No plan can hope to solve this nation’s very real health care cost issues if the law whose many parts are driving up those costs is not first repealed. Unfortunately, AHCA fails to do that.
We can do better, and better starts with a full — a real — repeal of the tragic failure that is Obamacare.