JULY 1, 2017 — The Congressional Budget Office recently estimated that the ranks of the uninsured would increase by 22 million Americans under a Senate bill to replace Obamacare. That figure goosed Senate Republicans to start tweaking the bill and to put off a vote until after July 4. Democrats, at the barricades defending the last president’s signature law, hope to jawbone the bill to death.
And … then what? Live happily ever after with Obamacare? Not likely.
Obamacare markets are wobbly or worse in many states. Premiums are expected to rocket again next year in many areas. In some counties nationwide, it’s likely that no insurers will offer coverage.
Why is Obamacare on life support? One big reason: Younger, healthier people (less costly to insurers) don’t see the value in those astronomical premiums. They’re not buying coverage. That leaves the Obamacare markets full of sicker, more expensive customers.
How to coax younger people to buy? Offer them lower-cost plans designed with their basic needs in mind — primarily catastrophic care for accidents or major illness, with options for more complete coverage if they wish.
The good news in that CBO report on the Senate bill: The government numbers crunchers expect that by 2020, the average premiums for benchmark plans for single individuals would plummet by about 30 percent compared to the current law. And remember, every time you hear someone compare a new bill to “the current law,” he or she is speaking as if Obamacare won’t collapse for lack of insurers and customers.
That 30 percent reduction in insurance premiums is a huge incentive to purchase coverage. Part of the reason for the low cost is that a smaller share of benefits would be paid for by the plans. There would also be some federal funds provided to directly reduce premiums, the CBO says.
Narrower coverage and higher deductibles could allow insurers to target customers who really don’t want expensive, soup-to-nuts coverage that is mandated by the current law. Luring those relatively healthy Americans into the risk pools would help stabilize all those sinking markets.
You don’t hear much about that encouraging news in this debate because of the uproar over the phasing-out of the other major prong of Obamacare: its huge expansion of the Medicaid population.
Why two prongs — with that Medicaid expansion arguably the more important?
Great question and here’s your answer: Because Democrats knew the highly costly Medicaid initiative would, by itself, be a tough sell to taxpayers. So they twinned it with the state exchanges, marketplaces intended to attract a less needy population — people who buy health coverage from private insurers.
About 11 million newly eligible people gained Medicaid coverage under the Obamacare expansion. The 2010 law vastly expanded the definition of who is eligible for assistance, including able-bodied adults. It ladled out billions to states to persuade them to expand their Medicaid rolls.
The GOP bill seeks to phase out that additional federal assistance while changing the way the federal government funds the overall program. In brief, states would get per-capita funding that would rise at a specified growth rate, rather than the current open-ended system with no limit on total federal contributions. State officials would largely decide how best to spend that money for the maximum benefit of the neediest recipients. The feds would relax rules to allow states to impose new requirements and experiment with better ways to deliver care — rewarding the quality, not the quantity, of medical treatment.
We can debate whether Medicaid should or shouldn’t cover able-bodied adults who are capable of holding jobs. But there’s no argument that taming the program’s runaway federal cost is vital to sustaining coverage for poor and less healthy Americans. That’s an imperative not only for the federal budget, but also for every other state struggling to meet Medicaid’s ever-growing demands on scarce dollars.
The Senate may or may not pass an Obamacare fix. But it’s worth noting that the CBO report compares the proposed law’s effects with that of Obamacare, as if the latter were stable and sustainable. It’s not.
“We don’t have too much of a choice,” President Donald Trump told Fox News recently, “because the alternative is the dead carcass of Obamacare.” He’s blunt but right.
Senators, here’s your choice: Fix the law now and try to help more people buy or retain coverage. Or watch as it topples into the dust, leaving many Americans utterly unable to find affordable coverage.