How is it that no matter what plan the Republicans offer to replace Obamacare, the Congressional Budget Office predicts that 22 million or so people will “lose” their health insurance. Straight repeal or Repeal and Replace with some premium support scheme and the estimate is consistent. It turns out, as the sharp eyed folks at the National Review have found, that 16 million of that 22 or so million people would not so much “lose” their health insurance as they would toss it away with great force.
How the individual mandate inflates health insurance participation
It turns out that when the government forces you to buy a product, on pain of tax penalties, a lot of people will comply whether they need it or not. A lot of Obamacare policies have such high deductibles that carrying them is like having no insurance at all, barring catastrophic illness or injury. The policies are also larded up with provisions that few people need, like birth control services for elderly men or drug and alcohol rehab for teetotalers. Every proposal to repeal and replace Obamacare has the common feature that it gets rid of the individual mandate. That people will let their useless policies lapse will not come as any surprise.
The insurance companies love the individual mandate
The Dirty Little Secret (among others) of Obamacare is that the insurance companies, which were the whipping boys of the health care debate pre-Affordable Care Act, love the individual mandate. Why shouldn’t they? Under the law, the government forces people to buy a mostly useless product.
The feature is also a reason why the companies mostly oppose repeal and replace as it cuts off the gravy train.
The source of dishonesty in health care debate
The way that the media reports the CBO estimates has enabled a lot of fraud surrounding the debate over reforming health care reform. Put out the sound bite that “22 million people will lose their health insurance, ” and the Democrats gleefully go into full Apocalypse mongering.
Sen. Bernie Sanders, I-Vermont has stated, with a straight face, that thousands, maybe millions, will die if the Republicans get their way. Republican moderates, in the meantime, run scared.
Does the CBO do dynamic scoring and estimate how many people ultimately get insurance if cheaper alternatives are available? This question does not have a clear answer. A lot of young people will want catastrophic insurance policies to handle big stuff like cancer or auto accidents, and maybe health savings accounts for day to day health services. Market competition tends to decrease prices in every other industry. No reason exists that it won’t do the same for health care. That fact should be taken into account.
