The Freedom Caucus is right. Speaker Ryan said so himself
Paul Ryan on House floor.

The Freedom Caucus is right. Speaker Ryan said so himself

Posted March 27, 2017 06:00 AM by Daniel Horowitz Paul Ryan on House floor.
House Speaker Paul Ryan, R-Wis., announces that he is abruptly pulling the troubled Republican health care overhaul bill off the House floor. Friday, March 24, 2017. J. Scott Applewhite | AP Photo
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Amidst the hullabaloo over the death of RINOcare, there is an overlooked comment from Speaker Paul Ryan that, if taken at face value, holds the solution for President Trump on health care. If the president was actually serious about keeping his promise to repeal Obamacare, he’d call Ryan out for this comment and demand that he immediately pass the Freedom Caucus’ plan.

The entire point of contention in this debate is over the meat and potatoes of Obamacare. Republicans claim to oppose Obamacare, but then they say they love the coverage mandates. The problem is the coverage mandates are the elements solely responsible for making Obamacare insolvent and destroying the insurance market. This has always been the position of the Freedom Caucus, which is the only coherent position among Republicans. Guess what? It turns out Paul Ryan agrees. Here’s what he said during his Friday press conference:

Nevertheless, I think there are some things that the secretary of HHS can do to try and sort of stabilize things, but really we need this bill to make it better.

For instance, risk pools, we believe the smarter way to help people with preexisting conditions get affordable coverage while bringing down the health care costs for everybody else is through re- insurance risk or risk-sharing pools which this bill supplied for the states. That is not now going to happen, and therefore he won't be able to deploy that policy tool that we think is better than Obamacare.

Perforce, Ryan admits that the way to deal with pre-existing conditions is to fund state high-risk pools rather than destroy the entire market for everyone with actuarially insolvent coverage mandates! Let’s shake on it and pass the bill today. Once the GOP bill included $100 billion for high risk pools and re-insurance, why did they keep the Obamacare regulations? The true answer is that they don’t want to repeal Obamacare. But now that Ryan publicly articulated the Freedom Caucus position, even as he blames them for upholding his own position in word (but not in deed), it’s time to call his bluff.

In reality, the pre-existing condition problem is the result of government intervention — both pre-and post-Obamacare. Thanks to years of state and federal regulations promulgated by the government-sponsored monopoly on health care and health insurance, there is no market to take care of pre-existing conditions. Moreover, the lack of a national, portable insurance market untethered from government-induced employer-based insurance has prevented people from purchasing lifelong, portable plans when they are younger. As Professor John Cochrane discussed with me during my podcast on free market health care, an unregulated market would give birth to health-status insurance, which would work a lot like life insurance.

Coupled with many other ideas, the cumulative and compounding effect of breaking down state lines, ending coverage regulations, eliminating health insurance’s anti-trust exemption, expanding Health Savings Accounts (HSAs), and providing equal tax treatment — all ideas supposedly championed by Ryan himself — will encourage young people to purchase individual insurance at a cheaper rate when they are younger and keep it portable with them for life (much like those who purchase cheap life insurance when they are younger). At the same time, it will drive down prices, foster maximum national choice and competition, and achieve actuarial solvency. Such a climate will make it more advantageous to convert Medicaid to vouchers so that poorer consumers can purchase a quality plan in the private market and slow the growth of health care spending for taxpayers. All of this will isolate and limit the scope of the pre-existing condition problem and shore up more funds to deal with the minimized scope of the problem.

Those remaining individuals who fall through the cracks can be subsidized with one-time lump sum payouts to HSA-style trust accounts to be used to purchase some form of insurance of pay medical bills. Taken together with other supply side reforms to lower the actual cost of health care, there won’t be a need for Medicaid expansion and middle class subsidies. It’s cheaper to actually solve the problem and give a one-time handout rather than create permanent market-distorting program.

Yet, Rep. Meadows, R-N.C., and the Freedom Caucus were willing to compromise on something less than full repeal and a full free market replacement. They were willing to agree to a massive new high-risk-pool program and even some retention of Medicaid expansion and subsidies. All they asked for was the repeal of the Title I regulations that destroyed the market. Ryan has now agreed with their position.

Thus, every day that goes by in which Trump and Ryan fail to demand action on a repeal bill pursuant to the principles laid out by the speaker himself is a day they failed to meet their promise.

Those blaming the Freedom Caucus for not repealing Obamacare must look in the mirror or publicly admit that they never intended to repeal it.

President Trump and Speaker Ryan, it’s time to marry your rhetoric with action — the very action the Freedom Caucus is supporting.

Daniel Horowitz is a senior editor of Conservative Review. Follow him on Twitter @RMConservative.