Every time some upstanding leftist brings up single-payer health care, the punditocracy dismisses them as deluded fantasists without any understanding of the realities of government or markets. But House Republicans are apparently going to vote tomorrow on an Obamacare replacement framework that accepts the entire logic of single-payer. It just does it in the dumbest way imaginable.
Let’s understand what House Republicans are trying to do. The American Health Care Act is described as a repeal to Obamacare. But the party’s constituents and even the president of the United States don’t favor such a move, or at least don’t want to deal with the consequences of denying someone coverage because of a pre-existing condition. Yet this is precisely what the House Freedom Caucus demands, based on their belief that “Obamacare regulations” (like insurance companies having to accept sick people) are raising prices.
So an amendment negotiated between the Freedom Caucus and a moderate Republican backbencher from New Jersey named Tom McArthur gives states the ability to obtain waivers to several Obamacare requirements, including the “essential benefits” package that defines acceptable insurance, and the “community rating” provision that forces insurers to charge the same rate for all applicants, except for a narrow band based on age and whether or not the patient smokes. This effectively repeals the pre-existing condition exclusion, because in the states that receive the waiver, they can charge an unlimited amount to the sick, pricing them out of the market.
States could only get the waiver if they showed that their new plan would either “reduce average premiums, increase enrollment, stabilize the market, stabilize premiums for individuals with pre-existing conditions or increase the choice of health plans,” according to Politifact. But there’s enough wiggle room in there (after all, if you purge the sick from the health-insurance rolls, average premiums would indeed probably go down) that a state government friendly to the cause of dismantling Obamacare would surely grant the waiver.
Moderate Republicans grew nervous at the idea that health care would only be affordable for the healthy and not the sick. McArthur claimed, in a press release, that no state could get a waiver unless it figured out how to handle those with pre-existing conditions, like by creating a high-risk pool. These are prohibitively expensive and have failed almost wherever they’ve been tried. McArthur also said that only those with a lapse in coverage can be charged more based on health status, but this creates an incentive for health-insurance companies to jack up prices for everyone, to weed out the poor, who correlate with those who require more health care.