by Moe White
The Republican Congress constantly talks about its plan to “repeal and replace” Obamacare, which they call a failure, a disaster, an abomination.
Speaker of the House Paul Ryan insists that the decision to immediately repeal the Affordable Care Act makes sense because it’s so bad for American consumers. Later, he says (at some time in the not-too-distant but never defined future), he and his colleagues will “replace” it with a better, Republican plan.
“We have lots of ideas” for how to replace the ACA, Ryan says. But so far, the GOP has offered only the possibility of Medical Savings Accounts, charity care (provided at the hospitals’ expense), and allowing insurance companies to sell policies across state lines, undermining each state’s ability to regulate business practices within its borders (so much for “too much big gummint”). Oh, and churches and neighbors, who will gladly pay for your heart transplant.
The fact is, the Republicans have no program to replace Obamacare because Obamacare IS the Republican health care plan.
Harry & Louise … and the Heritage Foundation
In 1993 President Bill Clinton appointed his wife, lawyer and policy wonk Hillary Rodham Clinton, to chair the president’s Task Force on developing a national health insurance program. Big pharmaceutical companies and the private insurance industry screamed bloody murder, just as they had done when Lyndon Johnson developed Medicare for the elderly (Ronald Reagan called Medicare “socialized medicine” and considered it a communist plot) and Medicaid for the poor. They ran hundreds of millions (billions in today’s dollars) of dollars’ worth of television ads featuring the fictional “Harry and Louise,” a middle-class couple terrified that they would lose their existing coverage and that costs would go through the roof.
Hillarycare was defeated, but the GOP recognized that voters wanted health insurance they could afford, that didn’t depend on their employers, that would allow small business groups to get a better break, and that would keep the insurers and drug companies from ripping them off. So, what did they do?
They turned to the Heritage Foundation, their right-wing think tank, to develop a market-based insurance plan that would allow the public to buy insurance directly, rather than through employers or affinity groups (ABA, plumbers’ union, etc.), and that could be subsidized so that the poor were not left out in the cold and everyone would get coverage—not just those with the poorest health, who put a greater burden on the system. Best of all, the subsidies would go to the GOP patrons, Big Pharma and Big Insurance.
The Heritage Foundation recognized that the only way insurance works is if everyone is insured. There are vast differences in outlays for a generally healthy person compared to those for someone facing the unexpected, catastrophic situations that insurance is designed to insure against. Premium payments from those who are healthiest keep insurers profitable enough to cover the expenses of those who need that expensive, acute or long-term care. (And even the healthiest might need it someday: for an aneurism, a spouse with Alzheimer’s, a car accident that leaves one quadriplegic).
Statistically, those catastrophic situations, according to the Health Cost Institute’s 2013 Health Care Cost and Utilization Report, make up only 20% of all healthcare spending. The remaining 80% goes for professional services (primary care, referrals to specialists, lab work, etc. = 34%); outpatient services (28%) and prescriptions (17%).
Clearly, the small percentage of people who get high-cost care in any given year are subsidized by those who don’t—whether those in need are poor, middle-class, or millionaires. It’s how insurance works.
The 1996 presidential campaign of Bob Dole ran on the Heritage Foundation’s plan: a “sensible, American-style” healthcare program, in contrast to the “socialist, European, nationalized-medicine” plan of left-wing radical activist Hillary Clinton.
Heritage: the plan that wouldn’t die
Dole lost, but when Republican Mitt Romney was elected governor of Massachusetts in 2002, he pushed the Democratic legislature to make the Bay State the first in the nation to offer “universal, market-based, affordable health insurance.” The Heritage plan became “Romneycare.”
Six years later, when Democrat Barack Obama was elected president, he pushed for a national health insurance program that would be “affordable, universal, and market-based.” To gain bipartisan support, he emphasized that it was the national equivalent of Romneycare. And it passed … against virtually unanimous Republican opposition. The Heritage plan became Obamacare.
Obamacare IS Romneycare. Which is the Dole platform. Which was the Heritage plan. Which was, is, and always will be the Republicans’ program of “market-based, affordable, universal health insurance.” Obamacare was their idea in the first place, and if an uppity Muslim Kenyan usurper hadn’t stolen it from them, they’d be celebrating its brilliant, capitalist-style, market-based success.
12 million people, 60 billion dollars
But since they now hate their own plan, let’s glance at the “replacement” options Republicans are touting. First, forget about “charity” care.
Every year approximately 1,685,000 Americans—one-half of one percent (0.5%) of the population—are diagnosed with cancer. Another 5.7 million (1.7%) suffer heart failure, and 4.5 million (1.4%) have kidney disease. So 12 million people across the U.S. face one of those three serious illnesses annually. Several million more suffer Alzheimer’s, debilitating COPD, liver diseases, or catastrophic car accidents.
The cost of treating any devastating medical condition will top $100,000, and often reaches $1,000,000: on average, conservatively, about half a million dollars per person annually.
So if a 500-member church faces the statistically expected 17 cases (3.5% of the congregation) of just those three major illnesses in a given year, can it come up with $8.5 million in its budget to cover their medical expenses? Even assuming that 75% of the congregation have insurance, the church would still need $2.12 million—every year—to help the ones who don’t.
Today about 35,000,000 Americans (11%: Gallup) are still uninsured, even with the ACA in place. By repealing it, the GOP would add 20 million people to that number. Annual medical costs for 55 million people come to $220 billion dollars. How much charitable funding is available for them? Will mayonnaise jars at checkout counters collect $220,000,000,000 in loose change every year?
Let’s acknowledge the charity “solution” for what it is: B***S***. Nothing more, nothing less.
As for Medical Savings Accounts …
MSAs are very useful for upper-middle-class families who—after paying the mortgage, car payments, utilities, food, clothing, college costs, savings in their 401Ks, essentials like spa visits, country club dues, face lifts, vacations, and other necessities of the good life—still have thousands of dollars lying around unused every month. It’s easy for them to put money into a special account for future medical needs, especially when that money is subsidized—tax deductible or tax exempt, or subject to a tax credit.
What about the rest of us? How do MSAs work when your total annual after-tax income, from two working parents with three kids, comes to, say, $37,000 a year ($3,083/month), and monthly expenses total $2,700? (See Chart)
For such a family, there are no night classes at community college; no Scouts or music lessons or special college-prep enrichment classes for the smart, talented (but poor) kids; no money set aside when the car needs tires or a transmission; no vacation travel; nothing but hopes and aspirations and endless hard work … and belief in the American dream.
But Paul Ryan wants these low-lifes to put a couple of grand a month—out of their $3,083 monthly income—into a Healthcare Savings Account, because why should they get subsidized insurance? And if they get sick and don’t have savings to cover their expenses, why should they become a burden on all those hardworking Wall Street arbitrageurs?
The Affordable Care Act—a.k.a. Obamacare, a.k.a. Romneycare, a.k.a. the Heritage Plan—is the GOP plan … and that’s why Paul Ryan, Mitch McConnell, Donald Trump, and the rest of the Republican herd can’t come up with an alternative to it.
What’s their real plan? In the words of former Democratic Representative Alan Grayson (FL): “Don’t get sick. And if you do, die quickly.”