Since several of you have asked, because you’re rightly confused as to why Cruz is supporting the Cruz-Lee Amendment to the GOP healthcare proposal but not Lee, let me explain in everyman’s language.
The number one reason your premiums skyrocketed under Obamacare is its regulations required everyone to be in the same risk pool to subsidize it. So men had to pay for pap smears and breast exams. If you lost 100 pounds like I have, or practice preventative medicine to avoid the doctor like my editor Todd does, you’re in the same risk pool as those with pre-existing conditions and chronic ailments. If you’re a single, healthy millennial like my producer, Aaron, you’re in the same risk pool as a large family who’s constantly at the doctor with a sick kid. And so on, and so on.
Because the cost of guaranteeing universal coverage is sky high, and that’s not what insurance is anyway. Insurance is not a guarantee of an outcome in the now, but a soft landing at the prospect of a bad outcome later. And the more you’re a prospect for a bad outcome later, the pricier that soft landing becomes because you’re a higher risk for a bad outcome than others.
But since the argument became universal coverage and not the best coverage possible, the entire system bent at the need of 3-5 million “uninsurables” (for lack of a better word) with chronic/catastrophic and expensive pre-existing conditions. Since they, as well as the elderly because we’re obviously typically less healthy the older we get, could not possibly pay the rates required of insuring them in an actual market, they had to be subsidized.
And the way they were subsidized was putting the rest of us less likely to experience a bad outcome in the same pool with them. This is why your premiums skyrocketed the past few years. This is why insurers have left the Obamacare exchanges. This is why you couldn’t keep your current doctor & plan if you liked it as Obama promised.
This isn’t a sustainable business model. And everyone who says otherwise is either a liar, or doesn’t understand basic economics or the business model of insurance.
The Cruz-Lee Amendment attempted to alleviate that by government providing an incentive for private insurers to buy their way out of Obamacare, by agreeing to provide a separate risk pool for those “uninsurables.” Government would even give them access to a fund (see that as our money) to help alleviate their costs of doing so. If private insurers agreed to these government regulations, they were then allowed to reintroduce competition into their business models. And as we all know, competition is what makes prices go down.
So make no mistake, this is what most of us would call a bailout even in its original form. This is why I said the Ted Cruz I know probably had to swallow his own bile to even go this far.
But he did it because until we separate the risk pools, there is simply no possible way premiums are going to go down. It is not possible for insurers to stay afloat covering all these exorbitant costs without raising prices on those of us costing them less, as Obamacare already established. This is what it means to repeal Obamacare, and Republicans were never going to do that. Cruz-Lee knew this, so they offered this more than half measure to at least get us an incremental step there.
Now, Republicans can cut taxes and penalties to alleviate other forms of suffering Obamacare has caused, and they are attempting to do that to be fair. However, those items are a drop in the bucket corporately by comparison, because they don’t address the fundamental reason your premiums skyrocketed, as a I previously explained. Essentially Republicans are saying “we can’t rebuild the house the arsonist burnt down so you’re still homeless, but we can replace the furniture.”
The current version of the Cruz-Lee Amendment that McConnell has approved has two major changes — it doesn’t exempt insurers who buy-in from as many Obamacare regulations, and it doesn’t permit a separate risk pool for the uninsurables.
Again, I can’t reiterate this enough — there is no way your premiums are going down as long as we put the chronically sick and pre-existing in the same pool as the relatively healthier. Economics just doesn’t work that way. Insurance just doesn’t work that way. So this isn’t even the Cruz-Lee Amendment, it’s really the McConnell Amendment. Essentially McConnell took Cruz-Lee meeting Republicans more than halfway, but then cut that in half as well.
These are facts, as Ted Cruz’s former chief of staff Chip Roy, who now works for the Texas Public Policy Foundation, has analyzed as well as CR’s very own wonk Daniel Horowitz. This is why Lee has yet to support it, because it’s not what they agreed upon. They will likely need Mike’s vote to pass this, so let’s pray he uses the leverage he has at the moment.
Since I know your next questions are why is Cruz supporting this, I would urge you to direct those questions to Ted. I love him, and have several friends working with and for him as we speak. But I have to do what I promised you I would do, which is tell you the truth to the best of my ability and that’s what I’m doing now. Knowing Ted, I’m sure he’s thought this through and has his reasons, but it’s his responsibility to share those. Mine is simply to do what I did here.
Finally, I apologize for the length, but while I said I would explain it everyman’s language, I didn’t say it would be short. Everything can be explained simply, but not all simple things can be explained shortly.
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Since several of you have asked me, here's what's wrong with the Cruz-Lee Amendment. It no longer is that:https://t.co/xyui3p2OXo
— Steve Deace (@SteveDeaceShow) July 14, 2017
The more I read about the Senate healthcare bill the more it sounds like TARP for insurance companies.
— Erick Erickson (@EWErickson) July 15, 2017
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