The insurance companies finally got around to telling the Republicans what they want to see in any revision or repeal of the Affordable Care Act and I think Kevin Drum’s reaction is spot-on:
Here’s the case for laughing: the insurance industry says it’s OK with repealing Obamacare, but we should maintain the pre-existing conditions ban, the individual mandate, the subsidies for low-income families, and the Medicaid expansion. Needless to say, that is Obamacare.
Here’s the case for crying: “The market has already been a little wobbly this year,” Tavenner said. If it looks like any of these four provisions are going to be repealed with nothing to replace them, insurers will simply pull out of the market at the “next logical opportunity.” That would be about six months from now.
And as I’ve mentioned before, there’s a good chance this doesn’t just mean pulling out of the Obamacare exchanges. If the mandate and the subsidies go away, but the pre-existing conditions ban stays in place, insurers might very well pull out of the individual market entirely. Republicans are playing with fire here, and it’s not clear if they even know it. Someone in the insurance biz really needs to have a come-to-Jesus meeting with them.
The Affordable Care Act is a structure with pillars and support beams, and you can’t just go around knocking pieces out and think that it will remain standing. If you make the insurance companies cover people who are sick and will likely use more health care than they pay for, then you must offset that by forcing healthy people to buy more coverage than they’re likely to use. If you’re going to force people to pay premiums, you need to subsidize the payments for people who cannot afford to make them. If you’re going to use Medicaid as part of the system, you need to give a bunch of money to the states so they can afford to expand their Medicaid programs.
In preserving private individual health insurance plans as the primary way that people pay for health care, you’re committed to making it profitable to give people insurance, and if that means you have to provide price supports and mandate that people get coverage, then that’s the system you have to create and maintain. If you have to insure the insurance companies by giving them a hedge against failure, that’s going to need to be included, too.
The Republicans say that they want and expect the Democrats to participate in the dismantling of Obamacare, but it’s doubtful that they’ll get any if they go ahead with their plan to repeal the law now and figure out the details later.
It would be one thing if the Republicans were willing to kick people under twenty-six off their parents’ plans, or if they recognized the need for Medicaid expansion, or if they were okay with kicking every diabetic or cancer patient to the curb. But they’re either in denial about what’s required to keep people from losing their insurance or they’re unwilling to let those people lose their insurance. Between the two, they have no solutions.
They’re the dog who caught the car, and now they want to pretend that they had a plan for the car.
They cannot do what they’re hoping to do, and they’ll wind up building something that looks almost exactly like Obamacare. The reason for this is that Obamacare isn’t some ideological overreach but actually the result of many unhappy but forced compromises. President Obama campaigned against the individual mandate because, he said, the problem isn’t that people don’t want insurance but they can’t afford it. How do you force people to buy insurance they can’t afford?
But he discovered that you can do that by subsidizing the payments and that you need the healthy people who would otherwise gamble on their continued good health if you’re going to be able to get the sick people covered. Why would an insurance company offer fire insurance to someone whose house is already on fire at a cost that is less than the price of repairing the damage? That’s doesn’t make sense, and neither does offering a plan to someone who is going to need dialysis or chemotherapy. To make it work, you need to compel all the people whose homes are not on fire to get plans, too. So, Obama didn’t want an individual mandate but he needed one.
A lot of us think that health care should be covered rather than insured, and avoiding crazy legislative contraptions like a politically unpopular mandate coupled to a sure-loss requirement to cover sick people is one of the reasons why. But if you want to preserve our system and cover almost everyone, these contraptions are not optional.
The insurance companies will now begin pointing this out with renewed vigor and urgency, but they’ll discover what the rest of us already know, which is that you can’t cure stupid and you can’t reason with the modern conservative movement.
