If there’s one thing President-elect Trump has a mandate to do, it’s to lead the effort to repeal Obamacare and replace it with something that works for the entire healthcare community.
That’s easier than it sounds. The healthcare community, broadly defined, doesn’t just consist of patients and doctors. It includes hospitals, healthcare providers and private insurance companies, all of whom have been dragged from pillar to post over the last few years as the system tried to sort itself out. The solution must work for everyone involved.
However, if patients are going to get the kind of care they need at a price they can afford, there absolutely must be market-based solutions that rely on the private sector to ensure people have the kinds of healthcare choices they demand. A vibrant and competitive insurance market is vital to that.
The promise to pull everything up by the roots and toss it in the waste bucket is politically soothing to some. The dysfunctional nature of Obamacare correctly has people genuinely up in arms. But we can’t just turn the ship around and go back where we came without realizing the very real human costs of another healthcare transformation.
The process of putting together something good to take the place of what has become a bad deal for far too many people needs to begin by recognizing a competitive private health insurance marketplace where consumers can pick from among a wide range of choices at prices they can afford is the best way forward.
As politically palatable as it might seem, changes to the healthcare system that renege on existing obligations uproot the temporary reinsurance and cost-sharing reduction programs, could hurt the middle class, and may end up limiting future coverage options for far too many people.
Remember, participating health plans were required to reduce their premiums based on federal rules. Specifically, in the case of the reinsurance program, insurers were required to both lower premiums and pay into a fund to help offset catastrophic medical claims based on the assumption those reinsurance dollars would be paid back. Legislators in Washington, instead of using those funds to control spiraling costs, now want to keep that money and put it towards wasteful programs and pork-barrel spending.
Good business decisions are necessarily based on assumptions about the marketplace. If the government steps in and changes the rules in the middle of the game, even if those rules are bad to begin with, adverse effects will almost surely occur. Efforts to redirect money owed to the private sector are wrong and violate basic conservative principles no matter how much we may dislike what those monies are being used to do.
Failing to keep existing obligations and defunding the reinsurance and cost-sharing programs would be economically and medically harmful to hundreds of thousands of people in rural areas. Almost 60 percent of those on the exchanges get some form of cost sharing subsidies. Many are working middle-class families making up to $61,000 for a family of four. Millions also just purchased their policies during the most recent open enrollment period. These families and patients would face significantly higher premiums in 2018 (even more than they saw in 2017). Reforming the current Obamacare mess must cause premiums to fall, not rise.
For most, Obamacare did not deliver the reforms people thought they would be getting. Whatever Trump and the Republican-controlled Congress do, they should keep in mind how and why Obamacare failed.
Jeopardizing a fragile market will do further harm to consumers battered by premium hikes, deductibles increases and doctors moving out of their plans. If even more companies withdraw, it will be that much harder to put the underpinnings of a healthy, vibrant private market into place once full repeal takes hold.
While repeal and replace makes perfect sense and should happen swiftly, it makes zero sense to take out our frustrations on insurance companies, reach back in time, and withhold reimbursements that were due by law. We need a clean slate, not a vindictive attempt to settle past scores.
George Landrith is president of Frontiers of Freedom, a public policy think tank. Thinking of submitting an op-ed to the Washington Examiner? Be sure to read our guidelines on submissions.
