This week, House Republicans will take the symbolic step of voting to repeal the health-insurance reform act signed into law by President Obama last year. The vote won’t mean anything, given that the Senate will refuse to go along and that President Obama holds a veto. But it will at least allow GOP House members to claim they took action.
What we don’t know, however, is how the Republicans propose to address health care reform themselves. Their slogan during the campaign was “repeal and replace,” but replace with what? They offer no plan, no approach, no solution of their own. And it’s rather odd, if you think about it. Sure, they only took power in the House a few days ago. But we’ve been debating health-care reform for at least two decades if not longer. During last year’s bitter fight over health care, Republican leaders were constantly in front of the TV cameras, complaining that Obama and the Democrats were refusing to listen to all their great ideas.
Well, now that Republicans control the House, they can propose and vote on all those great ideas.
And those ideas would be … ?
Hello? Those ideas would be …?
For example, what’s the GOP plan to cover those with pre-existing conditions who can’t get insurance? (A new administration study estimates that one fifth of American non-elderly adults have a pre-existing condition that might bar them from getting coverage, and as many as one half have conditions that would require them to pay higher rates for coverage.)
In addition, what do we do about the estimated 50 million Americans — an increase of four million — who went without any kind of health insurance in 2009? According to new numbers released last month by the Kaiser Foundation, more than 22 percent of nonelderly adults and more than 10 percent of the nation’s children had no coverage last year. Workplace-provided health insurance is becoming less and less common, and as the report notes, “The number of Americans lacking medical coverage now exceeds the population of Spain.”
Coverage for those with pre-existing conditions is one of the more important and politically popular achievements of the Obama health-insurance reform. People love the outcome, but many are admittedly less than pleased with the means used to achieve it, which is a mandate that individuals must get health insurance or pay a fine or tax.
Here’s the crux of the problem: A requirement that insurance companies have to cover you, no matter how sick or injured you are, creates a massive incentive to game the system. Healthy people will refuse to buy insurance, knowing that if they do happen to get sick, they can always walk into an insurance office and get coverage. Conversely, sick people will naturally rush to buy coverage, throwing off the balance between healthy and sick needed to make insurance financially feasible.
A new study by Anthony LoSasso, a professor at the University of Illinois at Chicago, documents the danger. LoSasso took a look at what happens in states that prohibit insurance companies from pricing health insurance based on an individual’s health history. Instead, they are required to use a “community rating,” in which healthy and sick people pay the same rate. It’s a much milder version of ObamaCare intended to make insurance more affordable for those with health challenges.
The chart below illustrates what happens. Sicker people buy more insurance, while healthier people flee, which in turn drives up the cost of insurance and makes the situation even worse.
That’s why ObamaCare includes an individual mandate to buy insurance. It’s the only way — short of a single-provider system — that can address the existing-condition problem without creating an even larger “free-rider” problem in the process.
As I’ve documented before, Republican leaders understand how popular and even necessary it is to find a way to cover those with pre-existing conditions. They have promised to retain that part of ObamaCare, but they have never explained how they intend to do so without relying on some form of individual mandate.
The time has come for answers.