After the prior disasterous GOP repeal of the Affordable Care Act (ACA), where the administration and the Republican leadership tried to ram through an unpopular bill only to withdraw it when it became clear that no amount of carrot and stick would get it passed, it seems that they’re at again! This time, VP Mike Pence may have the House Freedom Caucus on board for a potential compromise. With the MacArthur Amendment (MCA), the American Health Care Act (AHCA) might have a shot at becoming law. But is this good news? We took a look into how the MCA affects the AHCA , but what we found wasn’t very inspiring.
If you have a glass of arsenic, and you add cherry Kool-Aid to it, is it then safe to drink? While it’s true that the AHCA was marginally better than Obamacare, with the MacArthur Amendment improving it a bit more, there remains major problems with this bill, unaffected by MCA, that pretty much negate any of it’s positives.
1. By keeping health care insurance mandatory, you are still forcing people to purchase a service that they may not want or be able to afford. While the term Individual Mandate does not appear in the bill or the amendment, if you have a lapse in coverage for more than 63 days, insurance companies are allowed to charge you up to 30% more for 12 months. According to Rand Paul on twitter, this is essentially paying a fine to the insurance companies rather than the government. As the ACA fined those who did not purchase insurance and called it a tax, AHCA pretends it is not a mandate, when it is. There is nothing in MCA that removes such penalties, except possibly under the limited waiver. The chance of you getting that waiver depends on the mood of your state government.
2. The MacArthur Amendment doesn’t affect the AHCA’s failure to remove many regulatory hurdles of Obamacare. Quoted in the Washington Free Beacon, Manhattan Institute Senior Fellow, Diana Furchgott-Roth maintains that the many issues of the ACA are left intact by AHCA, and that the amendment doesn’t change this. “‘I think this amendment would continue many of the problems of the ACA,’ she said. ‘Insurance companies should be able to offer the plans people want to buy. In many cases that means plans without certain coverage.'” Roth continued, “‘Why should people have to buy plans that cover maternity care if they won’t have babies, or mental and drug abuse coverage if they think they won’t need it?'”
3. Forcing insurance companies to cover pre-existing conditions destroys the whole idea of insurance. Insurance is a concept predicated on healthy purchasers contributing into a pool of other healthy purchasers, paying towards the possibility of future sickness. If you have enough purchasers in a pool, and they all don’t get sick at once, it works. However, if the law says an insurer must in take already ill people, who haven’t paid anything, but still must be covered, the whole model falls apart. Even with a penalty for not buying insurance, paying the penalty is still less expensive than government-mandated insurance. In a cost-benefit analysis, many will conclude that it’s better to pay your penalty and wait until you’re sick, only then purchasing the expensive coverage. Again, MCA doesn’t change this.
4. The MacArthur Amendment will not affect rising costs. We’ve seen this under Obamacare, although we were promised the opposite. In addition to the increases in prices that naturally follow increased demand (even an artificial increase), in order to cover the losses that must come through covering late-comers (that they’re legally obliged to take), insurers will be forced to raise premiums. Limited waivers or not, this will help create an untenable situation nationally, leading to an appeal to government to do what insurance companies could not afford to. That’s right! Single payer! The Republicans will help realize the dream of Democrats and socialist, but under the GOP brand.
Government-run healthcare remains a perfect mess. The AHCA, rather than solving the issues of Obamacare, it instead re-brands and re-positions. Perhaps before instituting another massive top-down government solution to rising healthcare prices, maybe government should back off enough to foster a truly free-market healthcare system, one where the consumer is a part of the purchasing process and where there is competition between hospitals and healthcare supply manufacturers, rather than have all be at mercy of de facto monopolies. It works just about everywhere else, when people are able to weigh cost and quality and make the decisions that best suit them, so why not in healthcare?
This President and Congress largely owe their power to a promise to repeal Obamacare. They were sent to Washington to get rid of it, not merely replace it with a GOP vision of big government-run healthcare, a shell-game that uses the same nuts (though repainted red), still with the same bad odds of working. We’ve already seen the best that the Democrats can do. If this is the best the Republicans can do, even with unified government, then it’s about time the states seek their own independent solutions and give up on the MacGuffin of federal reform.
(Note: MacArthur Amendment outline screen grab from Brian Schwartz @schwartzbFBN)