Obamacare `Repeal and Replace' Still Light on `Replace'
Yuval Levin and Bloomberg View columnist Ramesh Ponnuru argue in the cover story of the current National Review that “repeal and replace” should remain the conservative mantra on the Patient Protection and Affordable Care Act. The law is so unworkable, they say, that it can’t be molded into something workable; conservatives must focus on outright replacement. This puts Levin and Ponnuru in opposition with conservative think-tankers such as Tevi Troy and Paul Howard, who are now arguing for a political strategy of reforming the law.
When someone tells you a health-care policy is terrible, the most important question is “compared with what"? And so it’s disappointing that Levin and Ponnuru devoted just three paragraphs of their 3,100-word piece to discussing how a replacement for the Affordable Care Act might look. They provide too little detail to convince the reader that their plan for “replace” would be less horrible than the parade of horribles they spend much of the piece arguing are reasons for repeal.
In their brief discussion of policy alternatives, Levin and Ponnuru have a lot of overlap with the eight-point list put forward last summer by Ben Domenech, who served on the staff of the Department of Health and Human Services during the George W. Bush administration (and sometimes blogs about Malaysia). Domenech says his list shows that “the policy-bereft media” is propagating a myth that Republicans do not have a health-policy alternative to the Affordable Care Act.
But as Bloomberg View columnist Ezra Klein pointed out in response to Domenech this morning, these eight ideas are so off-point that they don’t constitute a replacement for the act at all. For example, Levin, Ponnuru and Domenech argue that sale of health insurance policies should be allowed across state lines. Health insurance costs vary widely by state, in part because some states mandate kinds of coverage that others do not; the idea is that interstate sale will increase competition and reduce costs.
As Klein notes, coverage mandates aren’t mostly an issue of states requiring acupuncture coverage. They exist because otherwise consumers could tailor health plans to the actual health risks they face, which would undermine the risk-pooling purpose of health insurance. Being able to buy a plan without coverage for lead poisoning is great if you know you won't be exposed to lead, but if only people with lead poisoning are interested in plans that cover lead, such plans will become prohibitively expensive.
States use coverage mandates to assure that insurance is available that provides the coverage individuals need, and the mandates act as mechanisms of transfer from the healthy to the sick. If interstate sale were allowed, healthy people would shift toward the states that allow the greatest degree of medical underwriting and coverage exclusions, causing a “death spiral” in insurance pools in other states. Pretty soon, insurance would only be sold in a handful of low-regulation states, much like South Dakota and Delaware have come to dominate credit-card issuance for borrowers all over the U.S.
And what would the effect of that be? Klein quotes the Congressional Budget Office on a proposal to allow interstate sale:
“The legislation ‘would reduce the price of individual health insurance coverage for people expected to have relatively low health care costs, while increasing the price of coverage for those expected to have relatively high health care costs,’ CBO said. ‘Therefore, CBO expects that there would be an increase in the number of relatively healthy individuals, and a decrease in the number of individuals expected to have relatively high cost, who buy individual coverage.’”
This makes Levin’s and Ponnuru’s plan a problematic “replacement” for Obamacare, inasmuch as it would make it harder for sick people to get access to health care instead of easier.
Levin and Ponnuru, like Domenech, also call for block-granting Medicaid and capping its expenditures. As Klein points out, this would lead to fewer poor people having health coverage. Levin and Ponnuru should have explained how they intend to make this change without making it harder for poor people to get care.
I am not Levin's or Ponnuru's editor, and if they don’t want to put forward detailed and defensible alternatives, they don’t have to. But since the right’s biggest problem on health policy is its actual and perceived lack of seriousness about addressing the problem of access to care, I think it would have been prudent for them to spend more space explaining how their own ideas would help people and less space rehashing why Obamacare is going to ruin the U.S.'s health-care system.
Perhaps they can start by responding to Klein’s piece and explaining why a health-reform vision along their lines would not end up shafting the poor and the sick.
(Josh Barro is lead writer for the Ticker. Follow him on Twitter.)