Tags: Healthcare Reform | Medicare | Social Security | Ted Cruz | gop | obamacare | taxes

Cruz's 'Consumer Choice' Offers Best Healthcare Reform

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July 11, 2017. Sen. Ted Cruz, R-Texas is followed by reporters on Capitol Hill in Washington, D.C. A healthcare proposal from Senate conservatives would let insurers sell slimmer policies provided they also offer a comprehensive alternative. It’s being billed as pro-consumer, allowing freedom of choice and potential savings for many. (Jacquelyn Martin/AP)

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Friday, 14 Jul 2017 12:53 PM Current | Bio | Archive

After seven years campaigning against Obamacare, U.S. Senate Majority Leader Mitch McConnell, R-Ky., has now begun the final GOP attempt to reform it. If this fails, his announced next step is working with Senate Democrats to save it by increasing its subsidies — whatever the cost.

The fact is that Republicans won the Senate, U.S. House of Representatives, and the presidency mostly on public dissatisfaction with Obamacare. They probably would lose it just as quickly by being unable to produce a workable replacement.

After the disappointing House bill and multiple futile attempts in the Senate, even free marketers like The Wall Street Journal editors had concluded that a rational market solution was politically impossible, conceding Obamacare’s market-destructive guaranteed-issue and community-rating provisions must be accepted "at least for now" (one editor said indefinitely), essentially despairing of market capitalism surviving for health insurance in the U.S.

But miracle of miracles the revised Senate plan now includes the "Consumer Choice" of Sen. Ted Cruz, R-Texas, which would allow health insurers to sell rational, health-rated plans that do not meet Obamacare requirements, if they also offered a plan that meets all other Obamacare requirements including covering all those with serious pre-existing medical conditions.

Poorer individuals choosing an Obamacare plan would still be eligible for subsidies. Those initially choosing a health-rated market plan would have the option of transferring into an Obamacare-compliant plan even after they became seriously ill.

Subsidies for Obamacare-compliant plans would be increased to meet higher costs, meaning government spending could actually increase under Cruz’s reform. But this separation of plans effectively creates a high-risk pool for the less-healthy long sought by conservatives. It openly treats these subsidies as government welfare and therefore is more honest while preserving a true, rational market alternative at a reasonable cost for the remaining great majority of the population.

This is a simple solution that is both rational and can be explained to a frightened public.

People can retain everything Obamacare does or change to a real market plan at reasonable cost, now paid with tax-exempt savings, another long-favored conservative option.

Everyone has choice, the ill can get government subsidized insurance, and the majority of the population can be covered in an insurance market that actually can work.

In a subsequent editorial, The Wall Street Journal considered the Cruz plan as a "reasonable compromise" with moderates but was concerned that if the moderates rejected it conservatives might be tempted to vote against "the other gains of the overall bill, including the first major Medicaid reform since 1965, repealing the individual and employer mandate, reversing a chunk of Obamacare tax hikes and other types of deregulation such as state waivers."

But what gains are the most important?

State flexibility is unquestionably a conservative gain. But Obamacare already allows state waivers and President Obama granted many. Without any change in the law, the Trump administration can interpret them more broadly and rationally. How about repealing the individual and employer mandate? This section of the Obama healthcare law has never been enforced — and never needs to be.

So the gains all come down to the tax cuts and Medicare reductions. The only important tax cuts were for the 3.8 percent investment income surtax and increased payroll taxes for higher income employees, which the new Senate proposal removed. The gains for Medicare are gradually reducing the Obamacare expansion of eligibility above the poverty level and capping payments to states, both of which have enormous cost and coverage implications. Any conservative would prefer cutting taxes and restricting Medicare eligibility to those who are actually legally poor.

But if it is a question of priorities, cutting benefits for the almost-poor to decrease taxes on the rich is not a winning argument, which is why the Senate bill conceded the tax issue. So the only remaining gain is for Medicaid.

It is important for future fiscal survival to limit this exploding entitlement but the real Republican purpose for the $772 billion in savings over 10 years is not savings, but to fund overall tax reform, again subject to "cut the poor to support the rich." The "stabilization fund bailout" for the big insurance companies opposed by Sen. Rand Paul, R-Ky., is another, but no one else seems to care about that.

At the end, free choice in a health market for the great majority of Americans surely must be preferred even over opposition to subsidies, which can be fought in budgets. Sen. Cruz’s honest and simple solution can be explained to anyone. No benefits are reduced for those preferring Obamacare and the gain for the rest of the population is a real market, that is the only rational and affordable long term solution to make health insurance work.

The debate is clarified. Only the Cruz amendment justifies support of an otherwise flawed bill and opposition to it if removed.

Donald Devine is senior scholar at the Fund for American Studies, the author of "America’s Way Back: Reclaiming Freedom, Tradition and Constitution," and was Ronald Reagan’s director of the U.S. Office of Personnel Management during his first term. For more of his reports, Go Here Now.

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DonaldDevine
Only the Cruz amendment justifies support of an otherwise flawed bill and opposition to it if removed.
gop, obamacare, taxes
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2017-53-14
Friday, 14 Jul 2017 12:53 PM
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