Scandal Sheet

The future of health policy after Obamacare

This article originally appeared on heartland.org.

As we all know, when President Barack Obama sold his health care law to the American people, he sold it to them primarily on the basis of cost. He did this because the polling was so unanimous: People weren’t demanding massive increased regulation of the insurance marketplace to achieve any particular moral goal about coverage levels or anything of the sort – the vast majority of Americans just cared that their health insurance premiums were too high. So Obama made the case for his law based not on increasing coverage, but on decreasing costs – and along the way, he promised no one would lose their doctor or their plan, or see worse coverage because of his law. In each case, his argument was in line with the polling data on what the American people wanted.

But what about making the case for health policy reforms in the post-Obamacare era? For most center-right health policy experts and opinion-makers, the assumption has taken hold that coverage levels must be sustained or even increased under any comparable reform. They believe the argument in favor of universal coverage has been lost, and that any plan that kicks people off of an entitlement program is doomed to fail politically.

This is an assumption held by most people in Washington and the media. Here’s an example from an unnamed GOP aide:

“If you want to say the further and further this gets down the road, the harder and harder it gets to repeal, that’s absolutely true,” the aide said. “As far as repeal and replace goes, the problem with replace is that if you really want people to have these new benefits, it looks a hell of a lot like the Affordable Care Act. … To make something like that work, you have to move in the direction of the ACA. You have to have a participating mechanism, you have to have a mechanism to fund it, you have to have a mechanism to fix parts of the market.”

But I wonder how accurate this frame is. Post-Obamacare polling data on this question are lacking, but given the behavior of so many individuals and entities in reaction to Obamacare it’s possible the bulk of Americans still hold the same views they did prior to the law’s passage: they want to retain their current plans and they dislike disruption in their insurance experience, but most of all, they want lower costs for themselves, not broader coverage for everybody else. And as we all know, on that count, Obamacare has been an unmitigated failure, as Scott Gottlieb notes:

Earlier today I reported that health insurance premiums are showing the sharpest increases perhaps ever according to a survey of brokers who sell coverage in the individual and small group market. Morgan Stanley’s healthcare analysts conducted the proprietary survey of 148 brokers. The April survey shows the largest acceleration in small and individual group rates (for renewing health plans) in any of the 12 prior quarterly periods when the regular analysis has been conducted. The average increases for the present quarter are in excess of 11% in the small group market and 12% in the individual market, where consumers purchase coverage directly from health plans. Some states show increases 10 to 50 times that amount. The analysts conclude that the “increases are largely due to changes under the ACA.”

This coverage vs. cost debate is going to be tested in 2016 in a major way as Republican presidential candidates propose their favored strategies. Last week, Louisiana Gov. Bobby Jindal released his replacement plan. The FAQ is here. Whether Jindal decides to run for president or not, his plan represents a bet that the American people still care more about cost than they do about the promise of increased coverage. Phil Klein weighs in:

Under Jindal’s proposal, Obamacare would be replaced with a system that equalizes the tax treatment of health insurance. Instead of merely giving tax advantages to those who obtain insurance through their employers, the Jindal plan would create a standard deduction for health insurance for all taxpayers. His plan also allocates $100 billion over a decade for grants to states if they agree to set up a program to guarantee coverage for those with pre-existing conditions and drive down premiums. Additionally, the plan would return some money to states known as Disproportionate Share Hospital Payments – which were slashed as part of Obamacare – and states would have to direct the funding toward expanding health insurance. He said there would be more than enough money to finance the grants out of the savings generated by other elements of his plan. … Though many elements of the plan are ones that conservatives have advocated in the past, the question now facing Republicans is whether the implementation of the health care law – specifically the fact that there are now millions more people receiving government-subsidized insurance and Medicaid – changed the policy calculus.

For more, Ross Douthat discusses Jindal and the policy dilemma here. Ramesh Ponnuru’s critique is here. And there’s an interesting Jon Gruber comment here.

I’m unsure where Jindal’s proposal will fall in the spectrum of replacement plans advocated in the 2016 cycle, but it seems significant he would decide to go this route when it comes to one particular point of comparison. When it comes to the expansion of Medicaid pursued so vigorously by Chris Christie and John Kasich, many on the right believe such expansions of the entitlement state to be eternal and unchallengeable in the court of public opinion. But the subtext of what Jindal is doing here indicates his position that this is not the case – that rolling back such entitlement expansions is key to any conservative reform, rather than getting into a back and forth with the left on who is more generous.

In making the case for his plan, Jindal repeatedly returned to the point that a bidding war with the Democrats is impossible to win within the arena of entitlement policy: They will always promise one dollar more to one more person. The favored strategy for winning that argument is going to be something voters will have to decide.

Sign Up
DISQUS COMMENTS

FACEBOOK COMMENTS

Comment with Facebook