In all the discussion of the new Republican health care plan, the answer to one crucial question remains obscure: Who is this bill crafted to benefit?
In order to benefit individuals, a plan would have to focus on choice, competition, flexibility – the things that allow people to purchase what best suits their needs. Enter the next act in the health care reform drama – Paul Ryan’s “American Health Care Act” (AHCA for short). Republicans believe in free markets, right? So clearly the fundamental underpinnings of a Republican-designed health care plan will focus on freedom and individual choice, right? Uh … right?
A close look at the AHCA reveals a different operating philosophy, one more tied to preserving the status quo and appeasing industry interests than to improving cost of care, and choice for individuals. Put more simply, Paul Ryan’s Obamacare substitute is fundamentally geared toward keeping a stable customer base for insurers and encouraging universal insurance coverage rather than toward enabling a free market for health care.
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Whether the insurers were actively present in the drafting of this new bill or whether its authors were simply too afraid of political fallout to challenge the status quo, the AHCA continues in the same direction as Obamacare. The first evidence of this deference to industry is how the tax credits at the AHCA’s core are allowed to be used – for insurance only.
These refundable credits (meaning that if you don’t earn enough to owe any taxes, you still get a payment from the IRS) are only allowed to be used to purchase a third-party payment plan (and, of course, the government gets to define what constitutes an acceptable level of insurance).
This is, as the Cato Institute’s Michael Cannon has been pointing out for years, a “soft mandate” on the purchase of government-approved insurance. If you buy the kind of product the government approves of, you get rewarded by the tax credit. If you choose some other way to buy health care, you’re out of luck, and your tax dollars will go to subsidize other folks who choose to buy the insurance that the government wants you to buy.
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Politicians are loath to disrupt the status quo, because it would mean some people might lose their current coverage. There might be turbulence in the insurance markets, and some companies might be harmed and some individuals might not get to keep the coverage they have now. And turbulence is bad for politicians. Better not to rock the boat — even if that means choosing the well-being of insurance companies over the freedom of Americans to choose for themselves.
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The Republican health care plan that K Street wrote https://t.co/CIEjFRUfQc
via @JGWithrow— Conservative Review (@CR) March 13, 2017
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