There is more to life than Medicaid.
D.C. conservatives say it’s the best Medicaid reform bill ever. Democrats and progressive Republicans say it’s a crippling cut to the poor and immoral. What nobody is talking about is the rest of the health care and health insurance market and how it is immoral to ensure than no middle-income family can live with dignity without unsustainable taxpayer support. Whatever we do or don’t do with Medicaid, why do we need to destroy the rest of the market for the debate over Medicaid? Why is nobody talking about healing the private market first?
Obamacare’s actuarily insolvent regulations and market-distorting exchanges and subsidies, built on top of existing government-sponsored distortions, destroyed health insurance in America and made health care unaffordable for all but the wealthy. That is a fact. That premiums have tripled in only the fourth year of implementation and that they will skyrocket thanks to only one or two insurers having a monopoly in most of the country is a reality before our eyes, not just a projection score from CBO. Why is nobody discussing ways to solve the private market crisis — repeal of Obamacare and enactment of free-market, supply-side health care reforms?
The supposed rationale for this arson of our health care system was the pursuit of universal coverage. But the reality is that 84 percent of all coverage increases came from Medicaid, not from the private insurance market. Even much of the remaining 16 percent increase since 2011 came from 1) Young individuals who never wanted insurance but were coerced into it by the individual mandate; 2) More people getting employer plans thanks to the recovering job market. Unemployment decreased from 10 percent to 4.3 percent; and 3) Individuals who are getting lavish subsidies but only need the subsidies because the Obamacare regulations made insurance unaffordable without them. Private insurance coverage for everyone older than 26 has actually decreased since enactment of Obamacare.
The remaining middle-income Americans and small business owners, thus, must suffer from crushing costs the size of another mortgage … for what?
Why did we have to destroy the entire market just to expand Medicaid?
A true compromise that will expose the duplicity of progressive Republicans and Democrats
To that end, here is my proposal to solve the problem and assuage the concerns of progressive Republicans while disarming the talking point of the left.
You want Medicaid expansion? Here, go have it. We won’t touch it at all. Go enjoy it. It’s all funny money anyway, and we have long since crossed the point of no return with the debt. As late as 1987, we spent just $27 billion on Medicaid; as late as 2008, we spent $200 billion on it; and now we spend close to $400 billion. The debate between the two sides is over whether we will spend $500 billion or $620 billion on Medicaid by 2026, both lowball estimates unless we actually solve the core problem and open up a free market in health care and health insurance. Plus, either way, the proposed “cuts” to Medicaid under the GOP plan will never occur, cannot occur given the dynamics of the rest of the bill, and are merely a talking point to get conservatives on board with maintaining the core of Obamacare.
Perforce, if this is the big reason why RINOs are having tantrums, let’s cede this issue, which will be ceded anyway, and demand repeal of the more critical elements of Obamacare in return.
In addition, let’s throw $200-$300 billion over 10 years at a federal high-risk pool that is structured like the “Maine model” to ensure insurers can’t bid up the price and make it an open-ended entitlement, but will deal with the remaining chronically ill who are not covered by other programs. This is more than enough to deal with the remaining people who aren’t on Medicare, Medicaid+expansion, SCHIP, VA, TRICARE, state programs, and existing state and federal programs for pre-existing conditions. Yes, we already spend $1.6 trillion on health care. Now, enough is enough.
Again, this is not my ideal plan, but we are going to spend this money anyway under every plan anyway.
What about working families who want to live in dignity without Venezuela health care?
At this point, there are no longer any excuses to destroy the remaining part of the market. Now it’s time to fully repeal the Obamacare regulations, exchanges, and subsidies for the healthy middle class of the country. It’s time to tear down the Berlin Wall of regulations and encourage states to do the same. Any insurer should be able to offer any type of plan under any circumstance to any individual or group. Let insurance companies experiment with new ideas, such as health-status insurance and multi-year options for younger individuals, that deal with issues like pre-existing conditions. The insurance regulatory regime should be focused solely on enforcing the contracts insurers make with consumers.
Keeping regulations to a minimum will lower costs, remove the bar to entry for start-up insurance companies, break the Big Government-Big Pharma monopoly on health care, and foster even more competition, choice, and cost transparency. Coupled with repealing the anti-trust exemption for insurance, equal tax treatment for individual plans, expanded HSAs, purchasing across state lines, and medical malpractice reform, these changes will bring prices tumbling down – both on the health care side and health insurance side.
Why destroy all of this opportunity just for a phony debate over Medicaid?
Don’t get me wrong. Medicaid is a terrible program and is also responsible for distorting the health care and insurance markets in its own right. But then again, Medicare is an even bigger market distorter. It is what it is, and there is nothing we can do about that now that the entire market is government-run. The only way to establish a beachhead and land our troops of liberty on the shores of the health care leviathan is to first heal the existing private market. Once we make the private insurance market great again and, more importantly, reduce the cost of health care so that insurance companies and their odious lobbyists are no longer the predominant factor, it will be a lot easier to wean people off Medicaid and utilize the private sector. At that point, Medicaid could work like food stamps, in which recipients purchase private food without destroying the foot market. But that can only happen once our health care market looks more like a shelf in an American grocery store rather than one in a Venezuelan grocery store.
There is no other option. At this point, there is no private market into which we can transfer Medicaid recipients. This is why the GOP Senate bill, and even other conservative proposals, have it exactly backwards. If we are going to keep the core of Obamacare, which is the private market regulations and subsidies, and own the death spiral immediately from the adverse selection of getting rid of the employer and individual mandates (on top of keeping the regs), we will not survive politically or solvency-wise by 2020, much less by 2025 to enact the promised Medicaid “reforms.” Moreover, it will be impossible. How can we maintain, own, and exacerbate Obamacare’s destruction of the private sector, flood the rolls of Medicaid even more until 2020, and then suddenly throw people off? Into what? By that point, even if we don’t have single-payer, and even if Republicans aren’t thrown out of power, we will all be on Medicaid. There is no way even upper-income families will be able to afford $50,000 premiums, much less those around the poverty line.
Plus, according to the CBO (and dictated by logic), premiums will increase by 20 percent — over and beyond the existing crushing trajectory — under the GOP plan before any reforms are even implemented in 2020. We will never live (politically) past 2020 to actualize any of the minor reforms anyway.
What Republicans and some conservatives are doing is completely backwards. They are putting themselves on the hook for the political liability of Medicaid “cuts” that will not and cannot happen anyway, all the while not repealing Obamacare for the private market, the critical political and policy winner. They are attempting to first storm the fort on the cliffs with the hope of establishing a beachhead after they are dead. Instead we must establish the beachhead first, and that begins with repealing the core elements of Obamacare’s destruction of the private sector.
Our health care, freedom, solvency, prosperity, and future are so much greater than Medicaid.
Author: Daniel Horowitz
Daniel Horowitz is a senior editor of Conservative Review. Follow him on Twitter @RMConservative.