One Key Question About the GOP’s Obamacare Replacement Bills
Much has been said and written about the GOP’s replacement bills for Obamacare, including this great roundup of reactions from my Fortune colleague Sy Mukherjee. Alas, I was closing the magazine and couldn’t weigh in. But this morning, I woke up with a swirl of questions in my head about the Republican plan—the two House bills introduced into the Ways and Means and the Energy and Commerce Committees on March 6—and what comes next. But here’s just one:
What problems do the replacement bills solve? This is the very good question that Peter Suderman asked in a blog post for Reason magazine, which often offers thoughtful analysis from a conservative point of view. Republican leaders have railed against Obamacare since its inception, contending that the mandate to buy insurance was un-American and that it created a new entitlement program with potentially runaway costs.
But their “fix” doesn’t fix any of that. The legislation swaps out an Obamacare penalty (that goes to taxpayers) for failing to buy insurance with a new hefty penalty (that goes to insurance companies) for those who lapse in coverage. As for the big, sweeping infrastructure (the exchanges), it largely keeps that as well. The so-called “entitlement” remains intact, too—with the tax credits of the old system rejiggered, but still there; and the Medicaid payments changed, but still there. (At least a few commentators have suggested that the Republican plan incentivizes states that have yet to accept the Medicaid expansion to rush into the federal program before the window shuts.) As Suderman sums up: “So Republicans would be replacing one set of insurance subsidies with another set of insurance subsidies, while killing the individual mandate but leaving many of the law’s insurance regulations intact.” Yup.
It’s no wonder conservatives in Congress and the commentariat have voiced their full-throated rejection of the plan, calling it “Obamacare Lite,” “Obamacare 2.0,” and my favorite: “RINOcare” (for “Republican-in-name-only”).
My question really isn’t about what it fixes or doesn’t fix about Obamacare, but rather about what it solves in our healthcare system in general. Does it address soaring costs? (Not that I can see.) Does it encourage innovation, new models of collaboration, data sharing? (Hmm.) Does it shift the focus to the prevention of disease rather than fight the costly rear-guard battle that we fight now? (No, it seems to do just the opposite.)
Obamacare, for all its flaws, at least temporarily shored up a rickety system of private, employer-based, and public insurance providers by essentially guaranteeing insurers a market with millions of newly enrolled citizens. I think that was one of its big mistakes, frankly—but that’s for a different column. The program has also helped 20 million Americans get insurance, many for the first time. So one could fairly say that the Affordable Care Act “solved” something.
The Republican plan, by virtually all early readings, is likely to cause many to lose their insurance. It will encourage private companies to stop covering employees (the new legislation cancels provisions in Obamacare that prevent that), and it isn’t likely to shore up anything.
So my question again: What does it solve?
This essay appears in today’s edition of the Fortune Brainstorm Health Daily. Get it delivered straight to your inbox.