I normally get asked about legislation that impacts health care. And normally, I would like to offer more carefully written commentary that what follows in this post! However, Congress is moving at break-neck speed to pass “Repeal and Replace” legislation for healthcare, and so it seems prudent to offer “fast commentary” in response. My apologies for that. Never the less, let me offer some thoughts…
As I have said many times before, Obamacare was no masterpiece of public policy. But, what the House just passed appears to be even worse. It is a tangled mess of tax cuts, imprecise incentives, and contradicting policy. It fails the good public policy test on several accounts, but let me highlight two…
1) INSURANCE ROULETTE: Insurance only works when a lot of people buy it. Insurance only works when the risk is spread as evenly as possible. This bill introduces a number of complex and convoluted tax incentives, repeals any form of a personal responsibility mandate, and introduces the opportunity for states to allow rate hikes for people with pre-existing conditions. These provisions do NOT strengthen the insurance umbrella of the country. This bill will NOT bring more people into the insurance system. It does not spread the risk. There are no reputable studies or estimates that forecasts more people sharing more risk in the insurance market. That makes this bad policy. This country already has an unacceptable rate of medically-driven bankruptcies because of people incurring costs they cannot afford. To continue down this pathway does not solve the healthcare crisis in the USA.
2) TAX POLICY vs. FISCAL POLICY: It is a well proven fact that if the government needs to get something done…it is faster, cheaper, less prone to fraud, and more effective to pay for it DIRECTLY, rather than give tax breaks hoping someone else will pay for it. Conversely, trying to get people to do things through income tax deductions is expensive to monitor, does not always product the desired result, is subject to higher levels of fraud, and always leaves some people behind. This healthcare bill relies on tax policy, rather than fiscal policy, to get healthcare done! That is a huge mistake — all research shows it cannot and will not be as effective as subsidies or other direct benefits would be. (Again, Obamacare was not the perfect answer on this issue; but, two mistakes in a row does not make something right!) Do not assume that I am advocating for a one payer system or direct government provided healthcare — I am not. But, if the insurance market is out-of-reach for some people…the right answer is to directly — without red tape — help those people get into the insurance market. The answer is NOT to create complex tax programs and hope that they will have the intelligence of a tax accountant to figure it all out.
END NOTE: This legislation is still new and was rushed through, so many of us will try to study it over the coming days. But, Congress has once again demonstrated that is has precious little expertise or leadership when it comes to healthcare. And yet, they continue to muddle with a system that they refuse to understand. And, more importantly, they seem oblivious to the reality that what they have passed will hurt people. It might help some. But, it will hurt millions as well — and they don’t seem to understand that at all.
MORE TO COME LATER