Overreach Threatens Healthcare Reform

Republicans were right about everything Obamacare.  Premiums did not fall by $2500 per family. You could not keep your plan or your doctor. The Class Act (nursing home benefits) proved unsustainable. Adverse selection does occur; the young  and healthy do tend to pay the penalty rather than buy the insurance. The Obamacare Exchanges were not financially viable and enrollments fell well short of projections.

The current outlook for Obamacare is equally dismal.  And the Democrat’s plans to save it are familiar and uninspiring. Increase subsidies, penalties, taxes and fees. Extend risk corridors. Replace with ‘Medicare for All’ (single payer).

That said: Republicans lost the philosophical war back in 2009. Obamacare created benefits and in turn, beneficiaries. The ACA increased Medicaid enrollments, imposed out-of-pocket caps and 86 percent of the12.7 million exchange customers receive some measure of subsidy. None of the above are going away.

Republicans should change strategy:

1) Narrow the focus. Choose a few meaningful and achievable reforms. Eliminate the individual mandate. Expand market choices so consumers can obtain the insurance products they want from a competitive, nationwide pool of providers. Return operational control of Medicaid to the states through waivers and block grants.

A single change to the tax code would have far–reaching effects. Treat all qualified medical expenditures (insurance premiums, provider services, diagnostics, treatments, medications, therapy, durable medical equipment and contributions to an HSA) as adjustments to income rather than itemized deductions. Allow every taxpayer to reduce their gross income by the exact amount of their health care expenditures, making all medical expenses payable with pre-tax income.

2) Communicate better. Persuasion is always a nerve-wracking challenge for Republicans. Although the attacks from the left have been pedestrian and predictable, Democrats are still winning the messaging battle. Parallel talking points is not a good strategy for Republicans. The unchallenged accusation or argument goes to the Democrats every time.

Democrats tell a harrowing story about the House bill. (Democrats struggle with predictions. See paragraph one). Nevertheless, Republicans must answer. Sample responses follow in italics:

Premiums will skyrocket. Compared to what? The cost containment of 2015? 2016?

24 million people will lose their coverage. Obamacare ‘gave’ people coverage by requiring them to buy it. Penalizing the non-compliant no less than 2.5 percent of their AGI proved an effective way to encourage people to accept the gift of Obamacare. So, several million people will ‘lose’ the one-size-fits-all insurance that they are required to carry. Most will transition to coverage that they select based on their own preferences and needs, reflecting their age, risk exposure, health profile and financial capability,

Some Medicaid recipients will be absorbed into state-designed alternatives to the current Medicaid. Coverage will be transferred, not terminated.   A few consumers will forgo coverage by choice.

The Obamacare template will remain available if a demand exists.

The old, the poor, the disabled and children will be harmed. Medicare already covers 55 million seniors and disabled Americans.  Nearly 69.5 million poor currently receive Medicaid benefits and approximately 5.5 million children are enrolled in CHIP. About 9 million veterans are enrolled in VA health care. Options already exist for the vulnerable. Obamacare mostly serves different consumers.

People with pre-existing conditions will be unable to find coverage. Individual states seeking waivers will have the option to modify Medicaid benefits and revise eligibility rules. Waivers are not even available unless a state has a risk pool option in place. Health care for the seriously ill will be provided.

Republicans must win round one and establish some level of trust with voters. If they generate positive results, the beneficiaries may give further reform a second look.

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