Tuesday, November 15, 2016

The Trump ObamaCare Panic

The GOP shouldn’t blow itself up over the meaning of ‘repeal.’

By Review & Outlook
The Wall Street Journal
November 15, 2016

Democrats are already panicked that Donald Trump will repeal ObamaCare and throw millions of people off the subsidy rolls, while some conservatives seem panicked that the President-elect will renege on his campaign promises and millions of people won’t be thrown off the entitlement. Like most inflamed political questions after Mr. Trump’s victory, the health-care debate would benefit from some perspective.

“Either ObamaCare will be amended, or repealed and replaced,” Mr. Trump told the Journal last week, and on “60 Minutes” on Sunday he added that “we’re not going to have a two-year period where there’s nothing. It will be repealed and replaced.” Mr. Trump is being more subtle than his critics.

The most important point is that the businessman’s election has stopped the entitlement cold. Until Mr. Trump intruded, liberals believed that the Affordable Care Act was the end of history, or the beginning of the end, and it would be a steady march toward single payer and even more central planning, with them in command.

But now the public has seen the results of their commands—premiums are soaring by 25% on average next year nationally and far more in some states. The cascade of insurers quitting the unprofitable exchanges, lower-than-expected enrollment and narrowing provider networks are contributing to the law’s woes. Liberals have been wrong on all the major health-care questions. They said health costs would fall, people could keep plans and doctors they liked, and voters would learn to love ObamaCare.

Instead, ObamaCare’s manifest failures have primed voters for new reform alternatives, and almost any change in policy direction would improve on the status quo. Even some Democrats were privately discussing reopening the law under Hillary Clinton.

So far most of the debate has been focused on the insurance mandates to cover birth control, pre-existing conditions and allowing adult children to stay on their parents health plan until age 26, as if those were the entire bill. The first and third mandates increase costs at the margins but also happen to be popular. Our guess is that insurers would continue to offer them even if not required by law.

The notion that pre-existing conditions cannot be covered without a federal command is a liberal myth meant to frighten the most vulnerable, and cancer patients are not going to be turned away at hospital doors. But the ObamaCare mandate-subsidize-regulate program is not the only or best option to help the sick, as reality has exposed.

The details are technical and involve the design of health insurance contracts, but the main point is that there are reasonably healthy markets—like employer-sponsored plans, Medicare Advantage and the Medicare drug benefit—that do not exclude the sick. ObamaCare’s high and rising costs are due to its architecture and attempt at income redistribution, not to some economic inevitability.

As a candidate in 2008, then Senator Obama recognized that the fundamental problem with the insurance market is that it’s too expensive for many consumers. He said that you don’t solve homelessness by passing a law that requires people to buy houses. It’s a shame he abandoned that philosophy in the White House.

The reason so many people haven’t joined ObamaCare is that they’ve concluded that its health plans don’t offer value for the money, even if they qualify for subsidies. Deregulating and devolving power to states and consumers to innovate and experiment would allow insurance products and prices to reflect what consumers want. Unchaining health care from Washington would also increase competition and lure more insurers back into the individual market. We’d favor replacing ObamaCare’s complex subsidy structure with a refundable tax credit for people who lack job-based coverage.

One lesson of ObamaCare that Republicans should recognize as they debate a replacement is the need to minimize disruptions. Medicine is among the most personal and visceral of political topics, and voters tend to be sensitive to government-created turmoil in their own lives. Democrats learned this in their 2010 and 2014 midterm debacles, or at least they should have.

Another lesson is to approach the debate with humility and build a stable and durable political consensus. Democrats never even tried this in 2009 and 2010, and they imposed a single “comprehensive” solution on a large and diverse country of 320 million people. Other than ObamaCare, there’s no law that says Texas and California must have the same priorities.

House Republicans unified this year around a smart set of health-care reforms in their “Better Way” plan, and let’s hope they will avoid a friendly-fire massacre over the meaning of “repeal.” Even Senate Democrats may have an incentive to cooperate because so many of them are up for re-election in 2018 in states Mr. Trump won.

One virtue of his election is how it is already breaking up fossilized political certainties and thus expanding policy opportunities. The Affordable Care Act is vulnerable because it is failing, and the Republican goal should be to put patient-centered, higher quality and truly affordable coverage within closer reach for all.

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