Why Republicans are so bad at health care

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Republicans have had seven years to figure out how they want to replace Obamacare, and this is what they’ve come up with: a plan that, according to the nonpartisan Congressional Budget Office, would lead to 23 million more people not having insurance and, in states that wanted to, sick people being burdened with much, much higher costs.

Maybe they needed eight years?

The real question here is why. Why weren’t Republicans able to put a plan together that people actually, you know, like — theirs is polling in the low 20s — and why did it take so long? And the answer is pretty simple: Republicans are philosophically opposed to redistribution, but health care is all about redistribution. For a long time, they tried to wish that away, and it was only when that wasn’t an option anymore that they moved on to Plan B: trying to pass the least redistributive bill they can before anyone noticed how much it doesn’t redistribute.

That last part isn’t working so well.

Now, if we could start from scratch, Republicans would like our health-care system to work the way Singapore’s does. Everyone would have catastrophic insurance to protect against true medical emergencies and then use health savings accounts to pay for routine care out of pocket. It’s not just that this would make people pay their own way as much as possible. It’s also the idea that making them do so would make them shop around for the best deal.

There are two problems with this, though. First, as economist Ken Arrow pointed out long ago, picking the right medical care is a lot different from picking the right car. People don’t know enough to be good comparison shoppers, and they’re not going to scrimp when their health is on the line. But second — and more importantly — we don’t have the low health-care costs you need to make all this work. Singapore’s government, you see, has been able to keep costs down because it owns most of the country’s hospitals, it employs a lot of the doctors, and it subsidizes cheaper treatments to try to get people to choose them. The result is that they spend only about 5 percent of their GDP on health care compared with the 18 percent we do. Which is really all you need to know about why their system works for them but wouldn’t for us. It’s a lot easier to pay for their own health care when that costs three or four times less what it does here.

How have Republicans dealt with this? Well, for the most part, they haven’t. They still want people to use HSAs, to pay higher deductibles, to have more “skin in the game” that will supposedly turn them from patients into consumers — never mind that that would just price a lot of people out of the market altogether. That’s actually a feature, not a bug. Health care is only a major priority for Republicans insofar as they can make it redistribute less money. So while conservative wonks might be focused on trying to make the health-care system more of a free market, conservative politicians are more interested in what that means for their tax cuts.

Just look at Trumpcare. It’s only a health-care bill to the extent that it takes health care away from the poor and middle class to pay for a tax cut for the rich. Indeed, over the next decade, it would cut Medicaid by $834 billion and health-care subsidies by $276 billion, all to finance a trillion dollars’ worth of tax cuts mostly benefiting wealthy investors.

But that was still too redistributive for the far-right House Freedom Caucus. They didn’t just want to stop the rich from having to pay for the poor. They also wanted to stop the healthy from having to pay for the sick. So they added an amendment that would allow states to opt out of Obamacare’s basic rules. Insurance companies wouldn’t have to charge people with preexisting conditions the same as people without them, and could sell plans that didn’t include “essential benefits” such as hospitalizations, mental health and maternity care. That would allow young, healthy people to save money by buying bare-bones plans, while older, sicker people would have to pay more for theirs since they’d be the only ones buying those types of comprehensive plans. The insurance market, in other words, would bifurcate. Healthy people would buy affordable plans that didn’t cover a lot, and sick people would try to buy unaffordable ones that did — until they couldn’t. Republican Mark Meadows, who more than anyone else pushed for these changes, was reportedly reduced to tears when he found out that they’d mean a lot of people with preexisting conditions would lose their coverage, which makes you wonder what he thought they were doing.

The rest of the GOP sure knew.

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Why Republicans are so bad at health care

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