TrumpCare Death Spiral?
On Monday morning, House Republicans chipped out their first TrumpCare draft. It was a terrible, half-hearted, miserable, disingenuous piece of political noise. The only surprising part was that they put out something this unfinished. Poor thing had almost no chance; dead on arrival.
Why isn’t there a real Republican healthcare plan? That’s easy. The ACA was the Republican plan, modeled on the system Mitt Romney built. The Democratic plans looked much different. Democrats had either singer-payer or an open market that included a robust public option. The Republican plan was the only completely market-based approach.
Obama allowed part of the Republican plan as an effort at compromise. Republicans were unhappy, demanding more compromises. Obama compromised more. Republicans remained unhappy. Finally, Obama and the Democrats ended up compromising down to the Republican plan, with all the Democratic bits removed. Really, they did. I was there.
And in the end, Obama had to pass it all with Democratic votes, because the Republicans voted as a block against him. In fact, Republicans vowed to frustrate every Obama initiative, so as to deny him and the Democrats any possible victory. Republicans have spent most of the last decade trying to smother that baby in its crib.
They’ve been dragging their feet, sabotaging every control they could reach, and throwing sand in every gear possible. Then they complained loudly about every stumble and all the funny noises from that box with the wrench sticking out of it.
Sorry, but a lot of people have short attention spans, and don’t connect, say, the Republican refusal to expand Medicaid with higher health costs across their state. Or the Republican refusal to set up or support local healthcare markets with the lack of local health markets. Or how so many insurance companies dropped out of the state markets the year after Republicans refused to reimburse insurance companies for costs they’d been promised would be reimbursed.
And Americans as a group are still paying all the healthcare costs.
Right. Cry me a river, liberal!
No, really. Americans are always paying for all our healthcare, every year. It’s a closed system. Before or after the ACA, it doesn’t matter. In the end, everyone got paid. People paid medical costs directly, it was paid through insurance programs (which we paid for), forgiven fees (which we (doctors) pay for), it was charity (which we paid for), or unreimbursed emergency room visits (paid for through lost fees, higher taxes and higher medical costs for the rest of us). Some of this care is done efficiently, some is terribly inefficient, but we pay it all regardless, every year.
Remember the healthcare crisis? No? Healthcare costs had been rising much faster than inflation for decades before the ACA was written. Healthcare cost were predicted to crush civilization, or some such hyperbole, but it really was a bad trend. Despite that, Republicans managed to crush most of the cost containment parts of the ACA (‘Death panels’. Remember?), which is something else we have forgotten. Still, even the basic law has surprised me at how well it has been keeping costs down.
And now the ACA is going away. So, where to go from here?
Well, first, people are still getting sick. That’s a big part. Worse, the vast majority of healthcare costs are concentrated on the very sickest people. Almost everyone else pays more into the system than they get out. It’s the whole point of insurance: spread those concentrated costs across a population. Most people pay in more money than they get back, but an unlucky few get much more. Remember: they’re the losers in this gamble. This is insurance.
We did the free-market thing before ACA, and it wasn’t great. For-profit insurance companies only wanted to issue policies to people who won’t use them much. That’s why they denied coverage to people with preexisting conditions. But what’s good for insurance companies is terrible for all of us, since most of us don’t know ahead of time who’s going to get sick.
This is called the three-legged stool problem, and it exists across all healthcare plans.
First leg: unless you want to take the sick out back behind the barn and shoot them, you can’t exclude people with preexisting conditions. Besides, we all pay the costs in the end, whether it’s through charity, Medicaid, taxes, or whatever.
Second leg: not everyone can afford insurance. The strictly capitalist, free-market approach is easy: no money, no care. Intellectually correct for Ayn Rand fans, but not great for anyone who’s less comfy with the sick poor spreading disease and dying by the roadside. So the better off have to cover at least some of the cost for the very poor. But since we’re paying that money anyway, unless you start taking them behind the barn, dumping them won’t save us money in the end.
Third leg: you need everyone. The system is only affordable if you spread the costs over all the people. If you can’t exclude anyone for a preexisting problem, some people will opt out until they get sick, then hop onto the nearest policy. That’s the only real death spiral, and no, it’s not good. To avoid that, you have to include everyone, all the time. You either do it through insurance payments like ACA, or taxes like Canada or Great Britain, but there’s no escape from the mandate to join in.
All the solutions have those three limits. Drop any of those legs and the whole thing falls over. The form healthcare takes can be anything from single-payer to…well, ACA, but it will have to take account of those elements.
