The Republican Plan

Thank you, Bob Reich, for pointing this out:

Years ago, conservatives and their think tanks latched onto the individual mandate as the way to get health insurance to Americans. It was ideologically more acceptable than requiring all employers to provide coverage for their workers, and vastly more palatable than a single payer system. Tax credits, too, surfaced years ago, and gained some traction during the 2004 presidential race, when both John Kerry and George W. Bush embraced tax subsidies for families with lower incomes.

At the time, Michael Chernew, then a health policy expert at the University of Michigan and now at Harvard, told The Nation that “the evidence suggests that subsidizing insurance premiums will be a relatively expensive way to encourage coverage, and relatively few people would respond.” This year’s version is still expensive, but Congress addressed the second part of Chernew’s critique; the individual mandate with penalties will require people to respond.

High-deductible insurance is now an integral part of the American health care model. Policies sold in the small group market, for example, will carry deductibles of $4000 for families and $2000 for individuals. As in Massachusetts, policies sold in the Exchanges will also carry high deductibles. The conservative think tank National Center for Policy Analysis—along with Patrick Rooney, then CEO of Golden Rule Insurance, which is now part of the giant UnitedHealth Care—pushed Congress to allow high-deductible health plans. They are quickly moving into mainstream insurance acceptability.

A look at the history of the Massachusetts reform law, the model for national legislation, shows that the Commonwealth Health Insurance Connector—the state’s name for its shopping exchange—was born at the conservative Heritage Foundation. A document circulated by the staff of Gov. Mitt Romney at the time called for a law reflecting “a culture of insurance” and “personal responsibility”—the latter a keystone of conservative ideology.

The embrace of conservative ideas also helps explain why real cost containment didn’t make it into the final product. Curbs on prices are anathema to American business, and perhaps that’s why the president made a deal with the drug companies early on not to fight for negotiated prices in the Medicare program, a pledge he had made during his campaign.

All this explains why the usual right-wing think tanks weren’t especially vocal during the final stretches of the bill’s path to enactment. Their ideas were going to become law—which makes it all the more puzzling that the Republicans have fought so hard against the legislation. “The significance of Obama’s health legislation is more political than substantive,” Reich wrote in his TMP column. “For the first time since Ronald Reagan told America government is the problem, Obama’s health bill reasserts that government can provide a major solution”—albeit a solution that relies on the private market to deliver the goods. The question is whether health care is a commodity that the marketplace can manage with government help. Or will something else be needed in the distant future?

High-deductible plans are something the elites of both parties love to push. It fits their vision of “personal responsibility.” What it is, in plain language, is a financial disincentive to get needed health care.

This is mitigated somewhat by the fact that the law subsidizes out-of-pocket expenses, including co-pays and deductibles. But we still need to fight for the higher subsidies that were included in the original House version of the bill.

6 thoughts on “The Republican Plan

  1. If the government eventually provides higher subsidies—which, in time, it must—then, certainly at that point a public option would be economically feasable and more palatable. Furthermore, high deductables, in the $2000—4000 range, is not gonna taste like reform to the average family, so higher subsidies will become a must. Aaahh, the shittiest bill possible has emerged, but at least the horse has been let out of the barn.

  2. Susie, do you know what this means?

    The WaPo has a page where people can try to figure out what the new bill will mean for them. Insurance status, number of people to be covered, whether over age 26, gross income, and marital status are entered and the program indicates an outcome.

    I plugged in a rather low income for an individual (no insurance currently, 1 person, $22,000 annual income, and single), and this came out:

    What the bill means for your insurance coverage:

    Beginning in 2014, you will receive tax credits to help afford insurance premiums in the new exchanges as well as assistance with deductibles and co-payments. According to your income and family size, the tax credits will ensure you do not spend more than $1386 to $1771 on premiums. Your maximum out-of-pocket costs for deductibles and co-payments would be capped at 27% of the total cost.

    What the bill means for your taxes:

    You are required to have health insurance by 2014. Penalties for not having coverage begin in 2014 at $95 per uninsured dependent and rise by 2016 to $695 per person (up to a maximum of $2,085 per family or 2.5 percent of household income (whichever is higher). After 2016, the penalty would be increased annually by the cost-of-living adjustment.

    I am pretty sure the premiums mentioned are annual, but I have no idea what the “27% of the total cost” refers to. Is that the total cost of all deductibles and co-pays? Of the entire cost of medical care for the year?

    Hoping someone knows and thnx for any info or pointing to links to articles.

    I was surprised at how quickly those penalties rise from the modest $95 per person to $695 per person.

  3. The Repubs played their opposition to the Obama bill as a win-win for them: If they could bloody his nose, they felt they would win by weakening him; and if the bill was passed they not only have a campaign ready made for attacking its unfair coerciveness, but they get what they wanted.

    Only the Dems bear the onus of putting a mandate to purchase junk insurance on people, not the Repubs.

    The Repubs’ problem will be what they do if they get enough power to really affect the implementation of the bill or votes to undo some of its conditions.

    Plus, they’ve shown the Dems to be just as Corporatist as the Repubs — and it will be harder for Dems to be believed to be the party of the people in the future.

    So, win-win or win-win-win. After the mess the party was in due to BushCo, Obama’s tactic of protecting Big Corporations and Big Banksters has been a godsend. Manna from heaven. Right now, I would say they’re worst problem is that the Tea Partiers are closely tied to the Repubs and are so bat guano crazy it may scare the electorate.

  4. It means you wouldn’t be charged more than about 1/4 of out of pocket costs. So if your deductible is $5000, you’d pay something like $1300. That will also include your co-pays.

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