I get the forces that have brought Republicans to their health-care plan. Democrats built a shoddy and unworkable structure out of the political equivalent of concrete: nearly impossible to repair or renovate, and darned expensive to demolish. The task is made even harder by the fact that Democrats currently control just enough votes in the Senate to keep Republicans from passing any sort of clean, comprehensive bill.
Speaker of the House Paul Ryan’s assessment last week showed he understands the problems. His argument is, basically: Democrats screwed up the health-care system. They won’t let us fix it cleanly, so if we’re going to do something, these half-measures are the best we can do. Let’s get this passed, address what we can through regulatory changes, then force Democrats to come to the table to negotiate the rest.
Yes, Democrats expanded coverage, which is good, but in the process they made potentially fatal alterations to the market for individual insurance. But I don’t think that Democrats are going to come to the table, even after Republicans push this half-bill through. Instead, I think they’re going to do … well, about what Republicans did with Obamacare: Spend four years pointing the finger of blame.
Republicans should accept, deep in their hearts, that there are no great outcomes possible at this point. Then they should rememberl that nothing is always a policy option: If you can’t do something better than the status quo, don’t do anything. It’s what I said to Democrats in 2009, and it’s what I’m saying to Republicans now.
There are two potential futures if nothing is done. One, the exchanges where individuals buy policies could fail, leaving people unable to buy insurance. Or two, the exchanges don’t fail, and we’re left with an unsatisfactory but still operational system.
In either case, the Republicans’ best option is to wait. Why? Because what they can do now — hastily, without touching the underlying regulations that have destabilized the individual market — is worse than either of those outcomes. The partial-reform structure they think they’ll be able to get through the Senate is likely to make the problems in the individual market worse, not better. And the fact that they’ve tinkered with the program means that Republicans will take 100 percent of the blame.
So I’d wait to see if the long-feared disaster comes at the end of this year, and if it does I’d make sure that Democrats own as much of the blame as possible. If they want to block reform, make sure the public knows they did: Throw up a comprehensive bill that they can filibuster. Appoint a blue-ribbon commission to come up with a unified Republican plan. Stop the funding games the Democrats were using to prop up the exchanges. And if the exchanges collapse, say to the public: “Hey, look, we didn’t touch the individual market. It was the garbage program Democrats rammed down your throats. We tried to save it, but they wouldn’t let us.”
Republicans will have to do something eventually, but they will be in a better position to design alternatives if they wait. If the exchanges survive, they will have time to come up with a plan and sell it to the public. If they don’t survive, then Republicans will be in an even better position, because they no longer could be blamed for taking something away from people.
If the individual market does collapse, there’s going to be a political crisis. They need to think about this now and have a bill ready to go as soon as it happens. As well as a temporary transition program to tide over the folks who are going to lose insurance.
Longtime readers of my column know that my pet proposal is a radical overhaul of the whole system in which we zero out all the existing subsidies and just have the government pick up 100 percent of the tab for medical expenses that exceed 15 or 20 percent of a family’s adjusted gross income: basically, a single-payer catastrophic-care system for expenses that no one can realistically save for. Let people buy insurance for expenses below that, or, if it’s not too expensive taxwise, let people set aside more money tax-free in Health Savings Accounts. And make some more generous provisions for people closer to the poverty line, such as prefunding Health Savings Accounts for them. That’s the whole program. It fits on a postcard, though the finer details — like which cancer treatments we’re actually willing to pay for — obviously aren’t.
However, this is completely politically infeasible, because voters don’t want genuine insurance, by which I mean a pool that provides financial assistance for genuinely unforeseeable and unmanageable expenses. Voters want comprehensive coverage that kicks in at close to the first dollar of spending, no restrictions on treatments or their ability to see a doctor, nice American-style facilities, and so forth. They are also fond of their health-care professionals and do not wish to see provider incomes slashed and hospitals closed, nor do they want their taxes to go up, or to pay 10 percent of their annual income in premiums. This conflicting set of deeply held views is one major reason that Obamacare — and American health-care policy more generally — has the problems it does.
So for now, nothing is what Republicans should do. What they can’t afford to do is try to get comprehensive reform done in stages, or do half of it because that’s what can pass. That kind of thinking is what got us into this mess in the first place.
Megan McArdle is a Bloomberg View columnist.