Why Do Louisiana Republicans Want to Replace Obamacare with Obamacare?

For the latest evidence that bipartisanship occurs in politics when conservatives agree to rubber-stamp liberal policies, look no further than Louisiana. Last week, that state’s senate passed a health-care bill by a unanimous 38-0 margin.

The bill provides that, if a court of competent jurisdiction strikes down all of Obamacare, Louisiana would replace that law with something that…looks an awful lot like Obamacare. Granted, most remain skeptical that the Supreme Court will strike down all (or even most) of Obamacare, not least because the five justices who upheld its individual mandate in 2012 all remain on the bench. Notwithstanding that fact, however, the Louisiana move would codify bad policies on the state level.

If a federal court strikes down the health-care law, the bill would re-codify virtually all of Obamacare’s major insurance regulations on the state level in Louisiana, including:

  • A prohibition on pre-existing condition exclusions;
  • Limits on rates that insurers can charge;
  • Coverage of essential health benefits “that is substantially similar to that of the essential health benefits required for a health plan subject to the federal Patient Protection and Affordable Care Act as of January 1, 2019,” including the ten categories spelled out both in the text of Obamacare and of the Louisiana bill;
  • “Annual limitations on cost sharing and deductibles that are substantially similar to the limitations for health plans subject to the federal Patient Protection and Affordable Care Act as of January 1, 2019”;
  • “Levels of coverage that are substantially similar to the levels of coverage required for health plans subject to the federal Patient Protection and Affordable Care Act as of January 1, 2019”;
  • A prohibition on annual and lifetime limits; and
  • A requirement for coverage of “dependent” children younger than age 26.

The Louisiana bill does allow for slightly more flexibility in age rating than Obamacare does. Obamacare permits insurers to charge older individuals no more than three times younger enrollees’ premiums, whereas the Louisiana bill would expand this ratio to 5-to-1. But in every other respect, the bill represents bad or incoherent policy, on several levels.

First, the regulations above caused premiums to more than double from 2013 through 2017, as Obamacare’s main provisions took effect. Reinstating these federal regulations on the state level would continue the current scenario whereby more than 2.5 million people nationwide were priced out of the market for coverage in a single year alone.

Second, the latter half of the Louisiana bill would create a “Guaranteed Benefits Pool,” essentially a high-risk pool for individuals with pre-existing conditions. Given that the bill provides a clear option for individuals with pre-existing conditions, it makes little sense to apply pre-existing condition regulations—what the Heritage Foundation called the prime driver of premium increases under Obamacare—to Louisiana’s entire insurance market. This provision would effectively raise healthy individuals’ premiums for no good policy reason.

Third, the legislation states that the regulations “shall be effective or enforceable only” if a court upholds the Obamacare subsidy regime, “or unless adequate appropriations are timely made by the federal or state government” in a similar amount and manner. Curiously, the bill does not specify who would declare the “adequa[cy]” of such appropriations. But should a court ever strike down most or all of Obamacare, this language provides a clear invitation for Democratic Gov. John Bel Edwards to demand that Louisiana lawmakers raise taxes—again—to fund “adequate appropriations” reinstating the law on the state level.

As on the federal level, conservatives in Louisiana should not fall into the trap of reimposing Obamacare’s failed status quo for pre-existing conditions. Liberal organizations don’t want to admit it, but the American people care most about making coverage affordable. Obamacare’s one-size-fits-all approach undermined that affordability; better solutions should restore that affordability, by implementing a more tailored approach to insurance markets.

Recognizing that they will get attacked on pre-existing conditions regardless of what they do, conservatives should put forward solutions that reduce people’s insurance costs, such as those previously identified in this space. Conservatives do have better ideas than Obamacare’s failed status quo, if only they will have the courage of their convictions to embrace them.

This post was originally published at The Federalist.

Kamala Harris vs. Hillary Clinton on Benefits to Immigrants

Back in January, jaws dropped when presidential candidate Sen. Kamala Harris (D-CA) admitted at a CNN town hall that she wanted to take away the existing health arrangements of hundreds of millions of Americans. Now we know one reason why.

In another interview with CNN that aired Sunday, Harris admitted that she wants to provide taxpayer-funded health care, along with education and other benefits, to individuals unlawfully present in this country. But as even Hillary Clinton recognized, doing so wouldn’t just cost precious taxpayer dollars. It will also encourage individuals to migrate to the United States for “free” health care.

In the interview, CNN’s Jake Tapper asked Harris about language in Section 102(a) of the House and Senate single-payer bills, which would make health coverage available to all individuals present in the United States, regardless of their legal status. When questioned whether she supported granting benefits “to people who are in this country illegally,” Harris responded unequivocally that she does: “Let me just be very clear about this. I am opposed to any policy that would deny in our country any human being from access to public safety, public education or public health, period.”

Compare Harris’ response to the words of none other than Hillary Clinton. When testifying before Congress about her health-care task force’s plan in September 1993, Clinton said she opposed extending benefits to “illegal aliens,” because it would encourage additional migration to the United States:

We do not think the comprehensive health care benefits should be extended to those who are undocumented workers and illegal aliens. We do not want to do anything to encourage more illegal immigration into this country. We know now that too many people come in for medical care, as it is. We certainly don’t want them having the same benefits that American citizens are entitled to have.

Clinton may not want illegally present foreign citizens having the same benefits that American citizens would be entitled to under single payer, but Harris does.

The problems sparked by single payer would reach far beyond undocumented foreigners living in this country. To wit, both the House and Senate single-payer bills prohibit individuals from traveling “for the sole purpose of obtaining health care” from the new government-run system. But note the specific wording: It only prohibits foreign citizens from traveling for the sole purpose of receiving health care.

This extremely permissive language would give federal officials fits. So long as anyone states some other purpose—visiting the U.S. Capitol, for instance, or seeing a Broadway play—for his or her visit, the language in the bills would make it impossible to deny these foreign citizens health care funded by U.S. taxpayers.

Provisions like these would not just cost American taxpayer dollars, it would also cost the U.S. health-care system. Growth in benefit tourism would greatly increase demand for health care (as would many other provisions in a single-payer system). Because of this greater demand, American citizens would have an increasingly difficult time accessing care. Foreign residents may not like waiting for care either, but individuals from developing countries lacking access to advanced health treatments might find queues for care in this country far preferable to no care at all in their native land.

Don’t Insult Americans’ Intelligence

In the same CNN interview that aired Sunday, Harris also tried, albeit unconvincingly, to “clean up” her January comments about “mov[ing] on” from private insurance. She claimed to Tapper that single-payer legislation would not fully eliminate private insurance. However, host Tapper rightly pointed out that supplemental insurance could only cover the very few services that the government-run plan would not, like cosmetic surgery.

Tapper also asked Harris about the unions that have health plans that they like now, not least because they gave up pay raises in prior years to keep rich health benefits. Harris could only concede that “it’s a legitimate concern which must be addressed.” I’m sure that those individuals facing the loss of their health coverage feel better, because Harris has officially dubbed their concern “legitimate.”

Note to Harris: Legal hair-splitting about whether single payer bars all health insurance, or just virtually all health insurance, and patronizing constituents fearful of losing their coverage, doesn’t seem like the best way to win support for a government takeover of health care. Perhaps next time she gives an interview with Tapper, she will finally have an answer for why she wants to give benefits to individuals unlawfully present, while taking coverage away from nearly 300 million Americans.

This post was originally published at The Federalist.

The CBO Report on Single Payer Isn’t the One We Deserve to See

On Wednesday, the Congressional Budget Office (CBO) released a 30-page report analyzing a single-payer health insurance plan. While the publication explained some policy considerations behind such a massive change to America’s health care market, it included precious few specifics about such a change—like what it would cost.

Sen. Bernie Sanders (I-VT), perhaps single payer’s biggest supporter, serves as the ranking member of the Senate Budget Committee. If he asked the budget scorekeepers to analyze his legislation in full to determine what it would cost, and how to go about paying for the spending, CBO would give it high-priority treatment.

But to the best of this observer’s knowledge, that hasn’t happened. Might that be because the senator does not want to know—or, more specifically, does not want the public to know—the dirty secrets behind his proposed health-care takeover?

Hypothetical Scenarios

The CBO report examined single payer as an academic policy exercise, running through various options for establishing and operating such a mechanism. In the span of roughly thirty pages, the report used the word “would” 245 times and “could” 209 times, outlining various hypothetical scenarios.

That said, CBO did highlight several potential implications of a single-payer system for both the demand and supply of care. For instance, “free” health care could lead to major increases in demand that the government system could not meet:

An expansion of insurance coverage under a single-payer system would increase the demand for care and put pressure on the available supply of care. People who are currently uninsured would receive coverage, and some people who are currently insured could receive additional benefits under the single-payer system, depending on its design. Whether the supply of providers would be adequate to meet the greater demand would depend on various components of the system, such as provider payment rates. If the number of providers was not sufficient to meet demand, patients might face increased wait times and reduced access to care.

The report noted that in the United Kingdom, a system of global budgets—a concept included in the House’s single-payer legislation—has led to massive strains on the health-care system. Because payments to hospitals have not kept up with inflation, hospitals have had to reduce the available supply of care, leading to annual “winter crises” within the National Health Service:

In England, the global budget is allocated to approximately 200 local organizations that are responsible for paying for health care. Since 2010, the global budget in England has grown by about 1 percent annually in real (inflation-adjusted) terms, compared with an average real growth of about 4 percent previously. The relatively slow growth in the global budget since 2010 has created severe financial strains on the health care system. Provider payment rates have been reduced, many providers have incurred financial deficits, and wait times for receiving care have increased.

While cutting payments to hospitals could cause pain in the short term, CBO noted that reducing reimbursement levels could also have consequences in the long term, dissuading people from taking up medicine to permanently reduce the capacity of America’s health-care market:

Changes in provider payment rates under the single-payer system could have longer-term effects on the supply of providers. If the average provider payment rate under a single-payer system was significantly lower than it currently is, fewer people might decide to enter the medical profession in the future. The number of hospitals and other health care facilities might also decline as a result of closures, and there might be less investment in new and existing facilities. That decline could lead to a shortage of providers, longer wait times, and changes in the quality of care, especially if patient demand increased substantially because many previously uninsured people received coverage and if previously insured people received more generous benefits.

That said, because the report did not analyze a specific legislative proposal, its proverbial “On the one hand, on the other hand” approach generates a distinctly muted tone.

Tax Increases Ahead

To give some perspective, the report spent a whopping two pages discussing “How Would a Single Payer System Be Financed?” (Seriously.) This raises the obvious question: If single-payer advocates think their bill would improve the lives of ordinary Americans, because the middle class would save so much money by not having to pay insurance premiums, wouldn’t they want the Congressional Budget Office to fully analyze how much money people would save?

During his Fox News town hall debate last month, Sanders claimed a large show of support from blue-collar residents of Bethlehem, Pennsylvania for single payer. The ostensible support might have something to do with Sanders’ claim during the town hall that “the overwhelming majority of people are going to end up paying less for health care because they’re not paying premiums, co-payments, and deductibles.”

Where have we heard that kind of rhetoric before? Oh yeah—I remember:

At least one analysis has already discounted the accuracy of Sanders’ claims about people paying less. In scrutinizing Sanders’ 2016 presidential campaign plan, Emory University economist Kenneth Thorpe concluded that the plan had a $10 trillion—yes, that’s $10 trillion—hole in its financing mechanism.

Filling that hole with tax increases meant that 71 percent of households would pay more under single payer than under the status quo, because taxes would have to go up by an average of 20 percentage points. Worse yet, 85 percent of Medicaid households—that is, people with the lowest incomes—would pay more, because a single-payer system would have to rely on regressive payroll taxes, which hit the poor hardest, to fund socialized medicine.

Put Up or Shut Up, Bernie

If Sanders really wants to prove the accuracy of his statement at the Fox News town hall, he should 1) ask CBO to score his bill, 2) release specific tax increases to pay for the spending in the bill, and 3) ask CBO to analyze the number of households that would pay more, and pay less, under the bill and all its funding mechanisms.

That said, I’m not holding my breath. A full, public, and honest accounting of single payer, and how to pay for it, would expose the game of three-card monty that underpins Sanders’ rhetoric. But conservatives should keep pushing for Sanders to request that score from CBO—better yet, they should request it themselves.

This post was originally published at The Federalist.