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CBO Confirms Fake Repeal of Obamacare Would Increase Premiums

What happens when Republicans pursue a half-baked repeal of Obamacare and sell it to the public as full repeal of Obamacare? Premiums go up because of the core Obamacare provisions left behind, yet that increase will be blamed on the false pretense that Obamacare was indeed repealed.

Earlier today, the Congressional Budget Office (CBO) released a budgetary and economic score of the presumptive GOP plan to “replace” Obamacare. CBO concluded that not only will premiums fail to decrease, but will increase by 20-25% and 27 million more people would be uninsured. The Left is using this as proof that repeal of Obamacare is a net negative. In fact, this CBO score explicitly states that full repeal of Obamacare would decrease premiums, but only chose to score the GOP’s half-baked repeal, which retains Obamacare itself while repealing only the funding mechanisms.
Now Republicans have a PR nightmare of their own making and feel pressure to “replace” Obamacare in order to plug the hole — a hole that only exists because they are in fact not repealing what is qualitatively 80% of Obamacare.

What is Obamacare?

Obamacare is not the individual mandate or the subsidies. Those are the [insufficient] funding mechanisms to cover the cost of the law. What is the law? A hodgepodge of rules and regulations that result in insurance companies being unable to offer actuarially solvent plans. Between guaranteed issue, community rating, mandated benefits, mandated networks providers, intractably limiting actuarial value requirements, and enrollment and contractual flexibility for individuals to drop coverage until they get sick, insurance has become completely insolvent. These regulations have not just driven up costs, but have destroyed the market by taking the concept of “insurance” out of insurance.

CBO scores GOP’s fake definition of Obamacare

The prospective Obamacare “repeal” law scored by CBO does not repeal any of these elements. Instead, it repeals the requirement to purchase health care and the subsidies along with the ACA’s Medicaid expansion. Thus, the outcome, as we predicted, is quite obvious. Prices remain high, there is no choice or competition in the marketplace, yet the funding mechanism is cut off. This creates a phenomenon of adverse selection and increased premiums. Think about it: if the costly regulations remain in place but you take away the penalty to buy insurance why would someone like me — whose annual health costs have tripled as a result of Obamacare — bother purchasing insurance?

CBO directly addresses this point:

The ACA’s changes to the rules governing the nongroup health insurance market [regulations, such as guaranteed issue and community rating] work in conjunction with the mandates and the subsidies to increase participation in the market and encourage enrollment among people of different ages and health statuses. But eliminating the penalty for not having health insurance would reduce enrollment and raise premiums in the nongroup market. Eliminating subsidies for insurance purchased through the market-places would have the same effects because it would result in a large price increase for many people. Not only would enrollment decline, but the people who would be most likely to remain enrolled would tend to be less healthy (and therefore more willing to pay higher premiums).

Leaving the ACA’s market reforms [euphemism for insurance regs] in place would limit insurers’ ability to use strategies that were common before the ACA was enacted. For example, insurers would not be able to vary premiums to reflect an individual’s health care costs or offer health insurance plans that exclude coverage of preexisting conditions, plans that do not cover certain types of benefits (such as maternity care), or plans with very high deductibles or very low actuarial value (plans paying a very low share of costs for covered services). [clarification and emphasis mine]

Obviously, CBO always overestimates the coverage issue and underestimates the cost of liberal policies. But in a general sense, CBO actually agrees with our analysis that the panoply of regulations is what has made health insurance insolvent. When CBO says repeal of Obamacare will result in higher, not lower, premiums and will exacerbate the complete death spiral of insurance, it is working with the assumption the GOP has presented to them — that they are not repealing the insurance regulations.

Imagine injecting a patient with a painful disease in one arm while injecting them with morphine in the other arm. The only way to stop the morphine (subsidies, individual mandate) is to get rid of the self-immolating injections (debilitating insurance regulations). The answer, first and foremost, is to stop injecting the patient with the disease.

Tearing down the Berlin Wall of regulations would both lower costs and increase number of insured

Repealing the insurance mandates will do more than just lower the cost of coverage. More people would be covered by a positive momentum of lowering costs and fostering choice and competition in the marketplace. CBO recognizes that the “number of people without health insurance would be smaller if, in addition to the changes in H.R. 3762, the insurance market reforms mentioned above were also repealed.” [emphasis added]

Now imagine if in addition to repealing the Obamacare-era regulations, we rolled back other anti-market forces, made insurance a national market (which encourages states to reduce their respective regulations), got rid of the anti-trust exemption, create equal tax treatment for individual insurance purchasers, and expanded HSAs? Prices would diminish, competition would rise, and more individuals would feel incentivized to purchase one of the many tailor-made and cheaper plans they can actually afford.

The dumbest policy and dumbest messaging

Yet instead of committing to full repeal of the insurance regulations in the bill, Republicans responded to the CBO defensively by saying they will have a replacement plan:

Once again, this is akin to saying I’ll take away the morphine but find a suitable replacement. How about taking away the disease itself — the insurance regulations — which were not scored by the CBO, as the report itself said? Then you won’t need a “replacement” plan, other than instituting further free market reforms that we needed long before Obamacare.

Republicans have managed to successfully paint themselves with the liabilities of Obamacare … under the banner of repealing Obamacare.

There is only one viable option to repealing Obamacare: REPEAL OBAMACARE. (For more from the author of “CBO Confirms Fake Repeal of Obamacare Would Increase Premiums” please click HERE)

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What Comes after Repeal? How to Fix American Health Care, Part 2

Thursday, I laid out the case for why Obamacare should be repealed, instead of propped up and tinkered on by additional top-down, boardroom thinking. It’s clear that whatever replaces Obamacare must focus on quality and incremental local solutions, not one-size-fits-all government mandates.

In this respect, the federal government’s biggest task for replacing Obamacare is to get out of the way and let state policymakers and health care providers innovate.

First off, let’s get clear what Americans want: They’d like many choices of affordable health insurance plans that allow them to choose their doctors. They want to buy a plan when they are young, then keep their plan from job to job and into retirement. And they’d like it to be truly affordable. These “must haves” are obvious to people of any political orientation.

Instead of approaching this challenge like designing a single system or product (the way Obamacare was constructed), Congress needs to help these conditions develop organically, while preserving freedom of choice for Americans. Here are some further thoughts.

Expand health savings accounts. As we age, our need for medical care increases, yet current government policies offer few incentives for people to save for their future health care needs. The one exception is health savings accounts, which are tax-deductible accounts owned by individuals that roll over from year to year. But those accounts are currently available for just one type of insurance plan—a high-deductible plan.

The improvement would be to expand the scope of health savings accounts so that they can be used with any type of insurance design, as well as to become the accounts into which any funds (either private or public) to help pay for health care needs can be deposited. That way, people would not only have more options, but also a place to keep (for future needs) any savings they get from buying better value insurance and medical care.

Create space for diverse payment models. Congress should remove regulatory obstacles to innovative approaches to providing or paying for medical care. For instance, many direct primary care practices use a monthly subscription payment model instead of the traditional fee-for-service model. This model eliminates significant administrative costs and allows doctors to spend more time with patients. Yet federal and state regulations that inappropriately treat those payments as insurance (as opposed to payments for medical care) further inhibit adoption of this approach that simultaneously reduces costs while improving quality.

Allow innovative new delivery models. In a similar fashion, federal and state lawmakers should remove the regulatory obstacles to other health care delivery innovations, such as specialty hospitals, free-standing emergency rooms, and telemedicine. Indeed, too often those regulatory barriers exist not to protect patients or consumers, but rather to protect less efficient providers from competition.

In general, federal health policy should focus on establishing a few basic rules while leaving most of the detailed decisions to either the private sector or state governments.

For instance, any federal tax relief for health care expenses should be the same regardless of a person’s employment situation. Today, those with employer coverage pay no income or payroll tax on their health insurance benefits, but those purchasing coverage on their own have to use after-tax dollars to buy coverage.

In addition, those who rely on public programs should be able to take the value of their benefits in the form of a contribution that they can apply to the plan of their choice, not dumped into a one-size-fits-all government program.

The federal government should also return to the pre-Obamacare status of setting only minimal rules for insurance markets and deferring to state regulation of insurance as a financial services product.

The federal government should not attempt to design and manage America’s health care system. Federal laws and regulations should allow and encourage insurers and medical providers to compete in offering better quality care at lower costs.

This will require returning health care decision-making to patients and their doctors, and returning policymaking to the lowest level of government that is best equipped to handle it: state legislatures.

Some politicians don’t like the idea of relinquishing that power, but after seeing the results of decisions made in Washington over the last few years, I think it’s worth a try. (For more from the author of “What Comes after Repeal? How to Fix American Health Care, Part 2” please click HERE)

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What Happens for Consumers after Congress Repeals Obamacare

All the talk about congressional Republicans preparing to repeal Obamacare may have some Americans on edge, but GOP lawmakers say they intend to craft a plan that will phase out the health care law to ensure a “stable transition” for consumers who depend on it.

Republicans say they want consumers to keep their health coverage, and continue receiving any subsidies, until Congress can pass a replacement that may not kick in until 2019.

In the days before Donald Trump is sworn in as president Jan. 20, Republicans are continuing to debate the substance of a bill to repeal the Affordable Care Act, popularly known as Obamacare.

Details are sparse, but conservative senators are urging Senate leaders to use legislation from 2015 as a floor, or minimum, for what should be done this year.

That bill phased out parts of Obamacare over two years, repealed the health care law’s individual and employer mandates, and did away with fines for not complying. It also eliminated the law’s Medicaid expansion, medical device tax, and Cadillac tax on high-cost plans.

Congressional committees have started work on a repeal bill. But already President Barack Obama, Democrat lawmakers, and other supporters of the health care law warn that 20 million Americans they say gained coverage under Obamacare—a figure that is disputed as inflated—are in jeopardy of losing that coverage.

Though Republicans plan to send a bill repealing Obamacare to Trump in the next few weeks, GOP lawmakers are considering delaying implementation of the repeal for two years to protect those who gained coverage under Obamacare.

“The repeal legislation will include a stable transition period as we work toward patient-centered health care,” Senate Majority Leader Mitch McConnell said on the Senate floor Thursday in a speech mapping out Republicans’ path for repeal.

A two-year transition before Obamacare’s official repeal takes effect would give Congress time to pass and implement a replacement plan. The goal is to ensure that those who obtained health coverage under the law—and received tax credits—would continue to until the replacement for Obamacare is implemented.

“There’s more of an understanding that if you just throw 20 to 30 million [insured Americans] out on the street, that’s not politically wise and, as far as I’m concerned, immoral,” Timothy Jost, professor at the Washington and Lee University School of Law and a supporter of the Affordable Care Act, told The Daily Signal.

“How do you deal with that?” Jost said. “I think the idea is you repeal it and put it off for some period of time and adopt and implement a replacement plan.”

Many proposals introduced by Republican members of the House and Senate, including House Speaker Paul Ryan’s “A Better Way” plan, include tax credits to provide financial assistance to consumers who purchase coverage in the individual market.

“We want to have tax credits that give everybody a shot at buying, take their tax credit and go buy a health plan of their choosing,” Ryan said Thursday during a town hall hosted by CNN.

Republicans “generally are not talking about” ending all subsidies, Jost said. But since they haven’t yet introduced a replacement for the health care law, he said, it isn’t clear whether tax credits will be based on a consumer’s age or income.

Republicans may agree it will take time to eliminate Obamacare without imperiling Americans’ insurance status, but GOP lawmakers remain split over aspects of the repeal legislation itself.

Some Republican senators, for example, would like to see a repeal of Obamacare’s taxes delayed for several months, while others say the taxes should be rolled back immediately after Trump signs the repeal bill into law.

The 2015 reconciliation bill, which members of the last Congress said plotted the steps for successfully dismantling Obamacare, repealed all of the law’s taxes immediately. Obama vetoed that bill.

Alyene Senger, a policy analyst at The Heritage Foundation’s Center for Health Policy Studies, advocates following the model set by the 2015 legislation and repealing the taxes immediately. Included are taxes on prescription drugs and health insurers, as well as higher restrictions and penalties placed on health savings accounts.

Other Republican lawmakers want to see GOP leaders produce a replacement plan before they vote to repeal Obamacare.

At first, House conservatives advocated a repeal-first, replace-later strategy. Now, though, they’re backing a plan to replace the law soon after voting to repeal it.

Congress took a major step toward repealing Obamacare this week after members passed a budget resolution for fiscal 2017. The resolution instructs committees in the House and Senate to begin writing the bill to repeal the law using a process called reconciliation.

After the November election, Republican lawmakers said they planned to have a bill repealing Obamacare on Trump’s desk not long after his inauguration Jan. 20.

But Trump has begun to set his own expectations for Congress.

At his first press conference since the election, the president-elect Wednesday mapped out a timeline for Obamacare’s repeal and replacement that centers around Senate confirmation of Rep. Tom Price, R-Ga., his pick to run the Department of Health and Human Services.

“We’re going to be submitting as soon as our secretary is approved, almost simultaneously, [or] shortly thereafter, a plan,” Trump said. “It will be repeal and replace.”

The Senate Finance Committee, which has primary jurisdiction, hasn’t scheduled a confirmation hearing for Price.

The Georgia Republican will appear at a courtesy hearing next Wednesday before the Senate Health, Education, Labor, and Pensions Committee. Republican Sen. Lamar Alexander of Tennessee, chairman of that panel, said earlier this week he doesn’t expect Price to be confirmed until mid-February.

Under Trump’s timeline, that would delay repeal of Obamacare until at least then.

But GOP leaders in Congress hope to move faster.

Ryan said Thursday that congressional Republicans are “moving as quickly as they can” to repeal and replace the health care law. But, Ryan admitted, it will take “a little bit of time.”

“The law is collapsing,” Ryan said, “and so we’ve got to rescue people from the collapsing of this law and fix this problem.” (For more from the author of “What Happens for Consumers after Congress Repeals Obamacare” please click HERE)

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Why Obamacare’s ’20 Million’ Number Is Fake

Liberals are notorious for caring about “groups” of people, but when it gets down to individual persons, not so much. You’re about to see this play out in spades as Democrats cry crocodile tears over the coming repeal of Obamacare.

You hear it over and over again: “This will be catastrophic for the 20 million people who were previously uninsured but now have coverage! You can’t take away their health care!”

First of all, no one is talking about doing that. Any repeal legislation will have a transition period for those who got coverage through Obamacare to move to new plans. And second, they will have more choices and better options. Win. Win.

But liberals would rather focus on quantity, how many millions we’ve given something to, versus quality, what does that “gift” mean for individual people.

The Obama administration claims 20 million more Americans today have health care due to Obamacare. The reality is that when you look at the actual net gains over the past two years since the program was fully implemented, the number is 14 million, and of that, 11.8 million (84 percent) were people given the “gift” of Medicaid.

And new research shows that even fewer people will be left without insurance after the repeal of Obamacare. Numbers are still being crunched, but between statistics released by the Congressional Budget Office and one of the infamous architects of Obamacare, the Massachusetts Institute of Technology’s Jonathan Gruber, it’s estimated that anywhere from 2 to 7 million people now on Medicaid would have qualified for the program even without Obamacare.

That further discredits the administration’s claim of 20 million more Americans having health insurance because of Obamacare.

Multiple studies have also shown that even those who are uninsured often have better outcomes than those with Medicaid. A University of Virginia study found that for eight different surgical procedures, Medicaid patients were more likely to die than privately insured or uninsured patients. They were also more likely to suffer complications.

And it is important to note that this study focused on procedures done from 2003-2007, prior to the geniuses in Washington deciding it was a good idea to put even more people on the already overburdened Medicaid system.

Additionally, despite what proponents of the law promised, there is little evidence to show that the use of emergency rooms, which have a higher level of medical errors, has decreased due to Obamacare.

Then there is this reality: While Obamacare has handed out millions of new Medicaid cards, that does not mean the recipients now have quality health care. In fact, it doesn’t ensure they have health care at all. That’s because increasing numbers of doctors aren’t accepting Medicaid.

As a Louisiana woman told The New York Times, “My Medicaid card is useless for me right now. It’s a useless piece of plastic. I can’t find an orthopedic surgeon or a pain management doctor who will accept Medicaid.”

Keep that in mind every time liberal Democratic senators pull out the Kleenex boxes bemoaning the fact Republicans are the ones trying to take people’s health care away.

Speaking of which, a much underreported fact of Obamacare is how many truly needy and disabled Americans are NOT getting the services they need because of the expansion of Medicaid for able-bodied adults (aka healthy) of prime working age, 19-54.

So while the left talks about all the new people Obamacare is helping, it neglects to mention that over half a million disabled people, from those with developmental disabilities to traumatic brain injuries, are on waiting lists for care.

And many of them are on waiting lists because Obamacare gives states more money to enroll able-bodied adults than it does to take care of disabled children and adults who qualified for Medicaid prior to Obamacare.

If you think that doesn’t have a real-world perverse impact, note this. Since Arkansas expanded its Medicaid program under Obamacare, it’s rolls have grown by 25 percent. During that same time, 79 people on the Medicaid waiting list who suffered from developmental disabilities have died. I would encourage you to read my former Heritage Foundation colleague Chris Jacob’s full piece on this.

Finally, it’s not just those enrolled in Medicaid that are finding fewer health care provider options. For people who now have health plans through the Obamacare exchanges, new Heritage Foundation research shows that this year, in 70 percent of counties across the country, those consumers will have only one or two insurers to choose from.

Add to that the millions of people who lost the doctors and health plans they liked and are now paying higher premiums for less coverage, and you can see that quality health care and anything resembling “choice” has quickly disappeared for an increasing number of Americans due to Obamacare.

So the next time a defender of Obamacare tries to take the moral high ground about the millions of people the law has helped, ask them to define what “help” looks like. (For more from the author of “Why Obamacare’s ’20 Million’ Number Is Fake” please click HERE)

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The False Narrative Of “Repeal and Replace” Is Preserving Obamacare

What is the GOP plan to replace Obamacare? That is the question vexing all of the Republican beard strokers in Washington these days. But it is the wrong question to ask and it is built upon an erroneous premise. Along with false information about Senate procedures, it is contributing to the reluctance to repeal this disaster.

The real questions that should be on the GOP’s mind are: what is wrong with our health care system, how did Obamacare exacerbate all of its existing vices, and how we can roll back not just the Obama-era anti-market interventions, but reform even some destructive policies that existed prior to Obamacare?

The entire mantra of “repeal and replace” was flawed from day one because it accepted the Democrat premise that Obamacare actually served a semi-useful function, albeit with some glaring flaws, and therefore, must be replaced with something similar. It presupposes a solution without understanding the problem. It’s like the mindless calls for “immigration reform” and “criminal justice reform” without specifying what is wrong to begin with and which problem is being solved with the “reform.”

Health care reform is no different, although much more complex by its very nature.

Much like immigration reform, conservatives should absolutely have a contrasting plan on health care, but not because of Obamacare. Obamacare needs to be repealed, period. Not replaced. Conservatives should have been supporting true free market health care long before Obamacare. Rather than replacing Obamacare in pursuit of similar goals, the plan should be rooted in diametrically opposite premises, guiding principles, and goals.

The root problem with Obamacare

In pursuit of the utopian goal of universal coverage for every last American, liberals have created a living hell of unsustainable crushing costs for everyone. At its core, this is what government has been doing for decades with mandates, regulations, and subsidies. This has created a death spiral of government-induced rising costs, a need for subsidization, and a further self-fulfilling increase in prices in health care and health insurance due to the circuitous cycle of government market distortions. Obamacare merely took all of those liberal health care policies and stepped on the gas pedal, making the price of health care and insurance astronomically high, inducing a need for well over $1 trillion in combined federal and state subsidies and spending on health care overall.

To be clear, while the tax hikes, extra spending, and unconstitutional requirement to purchase insurance or for employers to offer health insurance are onerous, by far the worst elements of Obamacare are the actuarially insolvent insurance coverage regulations. Those regulations, most prominently guaranteed issue (must cover all pre-existing conditions, even if they never had any insurance) and community rating (charge everyone the same unsustainable price), have driven the cost of insurance into a death spiral. The second worst elements are the massive subsidies and the Medicaid expansion, which not only drive up the government’s budget in order to cover the self-inflicted high costs, but indirectly create an even greater inflationary pressure on consumer prices.

“Repeal and Replace” accepts the premise of that root problem

When Republicans refer to “repeal and replace” they really mean bait-and-switch because they are accepting the premise that we need to keep the pre-existing condition coverage mandates that are responsible for unsustainable costs along with refundable tax credits (which are subsidies in all but name only) in order to sustain the higher prices. Accordingly, when they say they are concerned we must not repeal Obamacare unless we have a replacement plan in place, they mean we must not repeal the coverage regulations until we have similar regulations in place. Likewise, they mean we must not repeal the subsidies until we have a pale-pastel version of the subsidies in place.

This entire approach is rooted in ignorance of free markets but also in a broken political barometer. Even though Republicans are in their strongest electoral position since the Civil War precisely because of the crushing Obamacare premiums, they still believe that on net they will somehow lose by repealing what they were asked to repeal. The loss of coverage and unaffordable costs are on Democrats, not Republicans. The number of people who would somehow lose coverage by getting rid of the mandates (remember, there was always guaranteed issue for those who already had some form of insurance beforehand) and would not be eligible for any other program is very small relative to the number of those who would see relief and the benefit to the broader market.

As for the subsidies and Medicaid expansion, everyone already agrees that we would have a two-year transition to give us plenty of time to lower costs both through repeal of the insurance mandates and through further free market reforms. But that decline in prices will never be actualized if Republicans don’t use budget reconciliation to get rid of the insurance regulations, particularly guaranteed issue and community rating. With the wide perception that Republicans repealed Obamacare, they will get blamed from premiums not decreasing as promised because the media and the public will not realize that the insurance regulations remained in place.

Affordable health care: repeal, reform, and restore

The central goal of any conservative health care plan, on the other hand, should be reducing market costs of health care and health insurance, not expanding access or universal coverage as an ends to itself. The essential guiding principle of achieving that goal is eliminating as many of the government regulations and interventions that have driven up the costs of health care. Simultaneously, reform must foster as much opportunity for flexibility, portability, personal responsibility for individuals; innovation, and competition in the market place for health insurance, as well as fixing anti-market forces on the supply side of health care itself. The end result will not be utopia. Rather, it will provide the largest array of choices at the lowest costs for the broadest number of people — the best outcome we can ever aim for.

The primary focus of conservative health care reform should therefore be centered on countermanding those odious price-hiking regulations and interventions, while keeping government spending on health care to as little as politically feasible.

The absolute worst thing for Republicans to do is to maintain the pre-existing condition mandate, in effect, “replacing Obamacare with Obamacare.” This is what makes insurance so costly for everyone.

Instead, Republicans should be focused on reforming the entire system and restoring the free market. Republicans should work on lowering the costs for those who want to purchase insurance on their own, and that will help expand coverage. Also, equal tax treatment for the individual and employment markets, eliminating the anti-trust exemption for insurance, coupled with expanded HSAs and breaking down cross-state insurance barriers, will make insurance portable, affordable, and foster more options and competition. It will further incentivize healthy consumers to take responsibility for their own health insurance, shop wisely, not over utilize and distort pricing, which in itself will reduce the inflationary pressure and create numerous cheaper options for a variety of coverage plans. This will limit the scope of the pre-existing condition problem and shore up more funds to deal with the minimized scope of the problem.

Coupled with numerous supply side fixes, such as tort reform, breaking down onerous FDA regulations on drugs and devices, cutting regulations on telemedicine and scope of practice for health care extenders, updating rules on medical accreditation, allowing doctors to write off the cost of indigent care, and giving hospitals authority to turn away illegal immigrants with non-urgent care will go a long way in reducing the actual cost of health care. This, in turn, will take pressure off the need for third and fourth party payer and help restore insurance to its original purpose.

Rather than a death spiral of self-fulfilling price hikes and bankrupting subsidies, restoring the free market will create a self-fulfilling momentum of price decreases, efficiency, portability, and personal responsibility.

However, each one of these ideas needs to be ironed out and passed through regular order. Unlike Democrats, we don’t believe in throwing in 10 disparate ideas into one bill. In the meantime, Obamacare — with its core regulations — can and must be repealed immediately. If Republicans truly understood health care, they would see that is the only viable option on the table. (For more from the author of “The False Narrative Of “Repeal and Replace” Is Preserving Obamacare” please click HERE)

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After Repealing Obamacare, GOP Should Replace with Something Better Than Previous System

Seven years after the tainted, party-line passage of Obamacare, Republicans are in position to repeal it. The GOP has pledged a speedy repeal, but remains divided over what to offer as a replacement.

Obamacare critics who imagine they must put together their own legislative plan numbering hundreds or thousands of pages are mistaken. Instead, they should build a comprehensive policy by passing a series of smaller, more digestible bills to deal with specific problems.

Obamacare was a failure from the start, built on the shameless lie that people could keep their health plans and doctors and that costs would go down. Of course, the entire scheme was based on forcing individuals immediately, and employees with company plans eventually, into new, federally-approved systems.

The government would deny coverage it viewed as inappropriate, mandate benefits patients didn’t want, limit doctor choice for most everyone, and shift costs from the old to the young. Never mind if you were forced to pay more for less, you had to buy government-approved insurance or pay a penalty. To soften the economic blow taxpayers were forced to subsidize patients and providers alike. No surprise, the insurance and pharmaceutical lobbies liked Obamacare and contributed millions of dollars to help push it through Congress.

The law relied on expanding Medicaid, a welfare program, putting federal and state budgets simultaneously at risk. Medicaid originally was created to cover the poor and never delivered good care. Now Medicaid covers people who aren’t poor and still doesn’t deliver good care.

Of course, Obamacare didn’t work out as expected — by the administration, that is. Premiums skyrocketed for policies people didn’t like. More sick than healthy people signed up, causing insurance companies big losses. Some insurers dropped out of the market entirely; others came to the federal government with hands extended. Patients found they had fewer choices even as they paid more. And the cycle continued.

The American people don’t like it. Congress should repeal it.

However, simply returning to the previous system isn’t a good solution, since it was flawed. What the GOP should do now is what the Obama administration should have done then: address specific problems with specific reforms. Rather than come up with GOPCare or TrumpCare, Republicans should simply adopt common sense changes which result in better health care.

For instance, Congress should protect our most critical safety net program, Medicaid, by block granting it to the states. The 1996 welfare reform applied this principle to the federal cash assistance program, AFDC, and literally broke the inter-generational cycle of poverty for millions of Americans, Block granting Medicaid would give states the ability to prioritize health care spending on their most vulnerable citizens. Permitting governors to design their own quality, cost-effective medical care delivery systems would benefit needy patients and taxpayers alike.

Insurers should be allowed to sell policies across the nation, making health insurance more competitive. Congress should override anti-competitive state mandates, which raise costs and reduce access.

Health insurance should be portable, which requires changing the tax treatment of health insurance. One possibility would be to shift the tax deduction from employers to employees. There are others, like restoring the availability of Health Savings Accounts.

Everyone agrees that people with preexisting conditions and chronic illnesses need access to affordable care — which is actually affordable. The federal government should promote state high-risk pools as well as private charitable care.

Medicare patients deserve greater choice. Beneficiaries liked the Medicare + Choice program, which Obamacare unfortunately restricted. The needs of seniors are varied; so should be their health coverage options.

These and other reform proposals could be enacted separately. But taken together, they would offer a serious, patient-friendly alternative to what we now have. Congress could begin working on these reforms even before repealing Obamacare.

At the same time, Washington policymakers on both ends of Pennsylvania Avenue should coordinate with the states on how the federal government can make it easier for states to improve medical care. As with Medicaid, states should be held accountable while being given more freedom to design policies best tailored to meet their citizens’ needs.

On January 20, eight years of irresponsible, liberal social engineering will come to an end. Republicans need to be prepared to govern. They will fill the White House, dominate Congress, and control most state governments.

It then will be imperative for conservatives to prove that they can propose as well as oppose. Eight years of resistance blocked much that was bad. Now is the time to redress the damage that occurred. Starting with health care.

Republicans don’t have to have all of the answers. But they do have to show that they are committed to finding serious solutions to the many problems before us. It’s time to do that now. (For more from the author of “After Repealing Obamacare, GOP Should Replace with Something Better Than Previous System” please click HERE)

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What You Need to Know about the Process Republicans Are Using to Repeal Obamacare

There’s a lot of talk about the procedure Republicans are using to dismantle Obamacare, but what exactly is reconciliation and how does it work?

Reconciliation is a budget tool used for legislation that changes taxes, spending, or the deficit. The procedure is especially powerful in the Senate, since a reconciliation bill only needs 51 votes to pass.

This year, GOP lawmakers are taking a crack at repealing the health care law through reconciliation, and the Senate took the first major step toward dismantling the law Thursday.

After a lengthy voting session, the upper chamber passed a budget resolution for 2017 that instructs four congressional committees to start writing the repeal bill.

Senate Majority Leader Mitch McConnell praised his Senate colleagues for taking “an important step” toward repealing Obamacare.

“The American people have called on Congress to act and finally bring relief from Obamacare,” McConnell said in a statement after the Senate passed the budget resolution. “I am pleased that the Senate took this critical step towards keeping that commitment tonight, and I look forward to our House colleagues passing it soon.”

The House is expected to vote on the budget resolution Friday.

Once both chambers have passed the fiscal blueprint, the committees that oversee the Affordable Care Act can begin working on the actual bill that will repeal Obamacare.

They have until Jan. 27—just one week after President-elect Donald Trump’s inauguration—to complete the legislation. (For more from the author of “What You Need to Know about the Process Republicans Are Using to Repeal Obamacare” please click HERE)

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Holding Obamacare Repeal Hostage for Replace Guarantees Its Defeat

After six years of pushing for a repeal of Obamacare, some on the right are now critiquing Congress’ effort for a full repeal. Their arguments do more to confuse the issue than to present a viable path forward for eliminating the harmful effects of this law.

Congressional Republicans appear set to finally repeal Obamacare using reconciliation, a process that allows them to overcome a Democratic filibuster in the Senate and pass budget-related legislation with a simple majority of the chamber’s members.

The repeal bill would include a transition period to give Congress time to debate how best to replace Obamacare with a series of patient-centered reforms, each of which would address specific problems in the health care system.

But critics of this approach derisively dub it “repeal and delay” and assert that it is based on a fatally flawed strategy that inevitably presents the GOP with several insoluble problems.

They claim that repealing Obamacare in this way guarantees market instability, higher premiums, and ultimately the loss of coverage for millions of Americans. This is because the insurance regulations mandated by the law may not be included in the reconciliation bill.

As a consequence, the critics argue that so-called “repeal and delay” carries with it significant political risks that will come back to haunt the GOP.

If that weren’t enough, the critics also contend, counterintuitively, that repealing Obamacare first makes replacing it more difficult.

According to the American Enterprise Institute’s Joseph Antos and James Capretta, the effect of repealing Obamacare before replacing it makes “it much more difficult to build a broad political coalition for the replacement plan.”

Antos and Capretta say that under such an approach, Republicans would eventually be forced to “reverse course and take steps to provide some kind of emergency insurance” for those negatively impacted by repeal because of the political backlash that would result.

Similarly, Heather R. Higgins and Phil Kerpen argue in a separate piece that “Democrats would have little incentive to come to the table on a ‘replace’ bill” in such an environment. And Peter Suderman, writing at Reason, argues that the current approach would set up “a political and policy equilibrium that is likely to make more effective reforms even more difficult.”

The implicit assumption in each of these critiques is that Democrats are willing to repeal Obamacare now just so long as we replace it with market-based reforms that Republicans can support.

Given this, some Republicans have proposed their own repeal plans. And they all largely reflect this common belief that Obamacare can only be repealed and replaced if it’s done simultaneously.

But the fundamental problem with this approach is that it actually poses greater political risk for the GOP, makes repeal less likely, and ensures that the replace debate will occur in the context of the framework created by Obamacare.

Holding repeal hostage for replace perpetuates the current market instability, increasing premiums, and coverage losses that have been the result of Obamacare. This poses significant political risks for a GOP that has consistently promised its supporters it would repeal the law as soon as it was able.

As pointed out by The Wall Street Journal, “affordability, choice and competition are due for another tumble next year under the status quo.” The health insurance market is getting worse day by day, and the American people expect Congress to stop the situation from deteriorating further.

In this environment, it will be difficult for Republicans to persuade their constituents that they are truly committed to repealing Obamacare when they now control the House, Senate, and presidency, and still can’t bring themselves to fully repeal it.

In addition, tying replace to repeal by voting on them simultaneously makes success in either effort unlikely. Congressional Democrats are unlikely to negotiate when the price of doing so is to facilitate Obamacare’s demise.

Their participation in efforts to replace the health care law while it is still on the books would acknowledge that it has been a failure, something rank-and-file Democrats have been unwilling to concede up until now despite all of the mounting evidence to the contrary.

Some critics concede that the absence of significant bipartisan support for the current replace plan means that almost every elected Republican will have to support it. Barring unified GOP support, it is unlikely that the legislation can pass the House or Senate.

Moreover, the partisan nature of this replace effort requires it to be accomplished through the same reconciliation process that critics are currently attacking, since Senate Republicans are unlikely to overcome a Democratic filibuster.

At best, such a process ensures that the GOP replacement plan can pass only by using the same controversial process that Democrats used to ram Obamacare through the Congress in the first place. That process, just as much as Obamacare’s substance, has been responsible for poisoning the debate ever since.

Legislation that combines repeal with a comprehensive package of reforms would inevitably be an enormous thousand-plus-page bill that will have been written in secret. And it will ultimately need to be quickly forced through the House and Senate, giving members and their constituents little time to read, much less understand, its numerous complicated provisions.

While the editors at National Review are correct in their assessment that building near-unanimous Republican support around such a replace plan will take time, they are wrong to assume that the end result will be “a real win.”

Instead, the most likely outcome is that Obamacare will continue to be the law of the land and any changes to it will be considered in the context of that baseline. As a consequence, efforts to enact the fundamental reforms that are needed to fix our health care system will be seriously disadvantaged.

The process to fully repeal Obamacare must begin now. The current plan to do so using budget reconciliation is a necessary first step in that process. The House and Senate did just that in the last Congress when they repealed the guts of Obamacare, and they should do at least that much again this year. Only then can the real effort begin to replace it.

Political risk, real or imagined, should not be used as an excuse for members of Congress to avoid doing the job they signed up for in November. No one said it was going to be easy. But a promise is a promise.

It’s time to repeal Obamacare. (For more from the author of “Holding Obamacare Repeal Hostage for Replace Guarantees Its Defeat” please click HERE)

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New Legislation Could Open up Health Care Options After an Obamacare Repeal

Rep. Dave Brat, R-Va., has introduced a bill in the House that, if passed, will allow individuals to decide how they want their health care funds to be spent, without the influence of the government or health insurance providers.

Brat said that the health savings account legislation is a way for lawmakers to prove to the American people that they have a plan to replace Obamacare after repealing it.

“First and foremost, we are putting through one of the biggest public policy initiatives of the decade with an Obamacare repeal,” Brat told The Daily Signal in a phone interview. “And so that has become very important to people, what you are going to replace it with. People want assurances that they are going to be better off.”

Labeled the Health Savings Account Expansion Act, or H.R. 247, “this bill equalizes the tax treatment for health insurance and care between different ways of paying for it,” according to a statement from Brat.

Mia Heck, the director of the health and human services task force at the American Legislative Exchange Council, or ALEC, told The Daily Signal that health savings accounts help individuals plan for their future.

“A health savings account (HSA) is a pre-tax medical savings account available for taxpayers who are enrolled in a high-deductible health plan,” Heck said in a statement provided to The Daily Signal. “The high-deductible health plan serves as catastrophic coverage, while encouraging individuals and families to save money to use toward future medical expenses. Funds deposited into an HSA are not subject to federal income tax.”

According to Brat, health insurance accounts enable consumers to shop around for plans that best suit their needs.

“Instead of having to get coverage approved from the government, an employer, or an insurance company, people will be able to use their [health savings account] funds directly for the products and services that they value,” Brat said.

Sen. Jeff Flake, R-Ariz., has reintroduced a companion bill in the Senate.

Flake said that the Health Savings Account Expansion Act puts individuals in charge of their health care decisions without penalty from the government or their insurance provider.

“[Health savings accounts] give consumers greater control over their health care dollars by providing them with a tax-advantaged savings option for their medical expenses,” Flake said in a speech Wednesday on the Senate floor. “This means that the dollars they work so hard to save can grow over time, tax-free, and be withdrawn, tax-free, for qualified medical expenses.

The Health Savings Account Expansion Act includes several reforms, according to Brat’s website.

First, it enlarges contribution limits to $9,000 to $18,000 per year for people who file single or jointly.

Second, it removes restrictions imposed by Obamacare for items that are purchased over the counter.

Third, it permits users to allocate health savings account funds to pay their health insurance premiums and other health care costs, such as doctor visits.

Fourth, it simplifies regulations “by eliminating the high-deductible health plan mandate.”

This legislation, according to Brat, is a free-market solution to the health care crisis.

“People are going to be very rational when it comes to allocating your own dollars that the doctor or whatever service you are going for,” Brat told The Daily Signal.

Brat sees his proposed legislation as a way to plan for the future and address the problems Obamacare has created.

“The reason Obamacare policy is so important is because it is right in the middle of Social Security and the Medicare crisis,” Brat said. “Both of those programs are insolvent in 12 years. And the kids won’t get any of those programs if we don’t do something about this.”

The campaign of President-elect Donald Trump has also spoken favorably of health savings accounts.

His presidential campaign website stated that they would be of “great benefit” to individuals. (For more from the author of “New Legislation Could Open up Health Care Options After an Obamacare Repeal” please click HERE)

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How Obamacare ‘Repeal and Replace’ Became a ‘Bait and Switch’ Monstrosity

Earlier this week, we warned that absent a major course correction, Republicans plan to keep the insurance regulations — the most onerous part of Obamacare, which is responsible for permanently destroying the insurance market.

Hence there is no repeal of most of Obamacare, just the funding mechanisms, such as the subsidies and the individual mandate. Worse, they are considering preserving some of the tax increases of the law in order to fund “the replacement” of the subsidies with … subsidies in-all-but-name-only (on top of the $1 trillion we spend on federal-run health care, not including state expenditures).

Earlier today, CQ posted an article which confirms these suspicions — that “Republicans consider keeping some Obamacare taxes intact” (subscription required):

Ways and Means Chairman Kevin Brady, R-Texas, whose committee has jurisdiction over the law’s taxes in the House, suggested the issue is part of the ongoing discussion, but that no decisions had yet been made.

“As we look at the deal, as we look at the numbers, and more importantly, the step-by-step approach to make health care more affordable, the taxes themselves become a part of that discussion,” Brady said. “Truly, no decisions have been made yet. We’re looking at the universe of options there.”

A Senate staffer suggested a similar discussion had come up among members this week.

Whether they ultimately keep some of the taxes or give into conservative pressure to include all Obamacare taxes in the repeal bill, the die is already cast on their “replace” bill. It is quite evident that they plan to create a massive entitlement built on top of preserving the insurance regulations and therefore are in need of an enormous pot of savings and revenues to fund the new scheme. The truth is the lobbyists for the health care industry want to continue a massive stream of subsidies and that is driving much of this perfidy:

Several lobbyists indicated that waiting to repeal some of the law’s more unpopular taxes, like the Cadillac tax, could entice some interest groups to work more closely on the replacement effort. It would also increase the savings associated with repealing the legislation, which could change the negotiation dynamics.

The mix of not repealing the price-hiking insurance regulations and replacing the existing subsidies with a new form of subsidies is a toxic combination. In fact, it is simply a bait-and-switch of the existing core of Obamacare.

I would define the main component of Obamacare in one sentence as follows: Require that private insurance companies offer coverage that is actuarially insolvent and unsustainably expensive and then offer massive taxpayer subsidies for families to afford those unsustainable plans, which in turn artificially inflates the price of insurance even more, which in turn engenders an even greater need for subsidization.

That is essentially the general cycle of government intervention in a nutshell, most dramatically embodied through Obamacare in particular. And that is essentially what will result from the GOP bait-and-switch plan to maintain the insurance regulations and concoct massive subsidies through refundable tax credits.

This plan will not only raise the cost of health care/health insurance and engender a greater need for government subsidization of unaffordable “private” plans, but it will also distort the health care market in general for the existing government-run programs, such as Medicaid.

The cost of covering an individual in the subpar Medicaid program was $3,247 per individual in 2011 before Obamacare was enacted. In 2015, according to data from the Department of Health and Human Services, the cost of enrolling an individual in Medicaid doubled to $6,366 per individual. And that is only for the second year of implementation. The cycle of regulation, public funding, overutilization, and lack of ability to peg the cost to the service has created a circuitous death spiral of unaffordable costs and unsustainable subsidies.

This cycle of failure is nothing but a handout to hospitals and insurers. Anyone concerned with helping the most people and creating a sustainable pro-growth economy would focus on lowering costs through deregulation, limiting subsidization, restoring insurance to its original purpose, and empowering individuals to have portable control over their own destiny through expanded HSAs.

Yet, Republicans are pursuing the elusive utopian goal of universal coverage (Obamacare in-all-but-name-only) because that has long been the official position of K-Street and the Chamber of Commerce. A more efficient socialism is good for their clients.

Nothing about this past election has changed the political barometer and priorities of GOP leaders in Congress. It’s one big bait-and-switch. It is now up to the president-elect and his likely influential vice president to make good on their promise to fully repeal Obamacare and replace socialism with the free market. (For more from the author of “How Obamacare ‘Repeal and Replace’ Became a ‘Bait and Switch’ Monstrosity” please click HERE)

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