Republicans Want to Replace Obamacare with…Obamacare-Lite?

Americans Trust Democrats Over Republicans on Health CareEver since Barack Obama signed the Affordable Care Act on March 23, 2010, the Republicans in Congress have tried to repeal it. This week’s vote was their 50th attempt.

And yet, despite their unyielding opposition, their earnestness rings hollow to most Americans for the simple reason that they have not offered an alternative path to health care reform. Even the party’s own strategists have chastised it for its negative approach, for failing to offer a plan of their own, for obstructing rather than leading.

Finally, their pleas have been answered — in the form of the Patient Choice, Affordability, Responsibility, and Empowerment Act, or “PCEREA,” sponsored by Republican Senators Orrin Hatch, Tom Coburn, and Richard Burr.

At long last, we can answer the simple question that Democrats have been asking Republicans since March 23, 2010: You got a better idea?

Unfortunately, the answer is a disappointing “no.”

The ACA, better known as “Obamacare,” has four major provisions: (1) a ban on price discrimination against sick people, (2) an “individual mandate” requiring everyone to purchase health insurance or pay a fine to the IRS, (3) tax credits for Americans who cannot afford to purchase insurance, and (4) a Medicaid expansion for the poorest Americans who don’t pay enough taxes to qualify for the tax credits.

The PCEREA does away with the first provision right off the bat. The most popular feature of Obamacare, the one that appeals to our basic sense of fairness, is the rule prohibiting insurers from charging different prices to different consumers based on health status. The Republicans would erase this rule, once again making insurance least affordable for the people who need it the most.

With the first provision gone, there isn’t much need for the second one. This is what most people have trouble grasping about the individual mandate: As unpopular as it is, it’s necessary in order to sustain the most popular part of the law. Without an individual mandate, a ban on price discrimination will simply result in insurers charging high rates to everyone, driving all but the sickest consumers out of the market. Insurers can only afford to charge reasonable rates across the board if healthy people are required to buy in.

The PCEREA replaces these two provisions with two new provisions called “continuous coverage” and “auto-enrollment.”

Under “continuous coverage,” Americans would be given a one-time opportunity to buy insurance at prices that aren’t based on health status. So long as they keep this insurance plan for the rest of their lives, they’ll never be discriminated against. If they miss this opportunity — say, by being born after the window passes — they can be discriminated against. If they lose their plan — say, because they change jobs — they can be discriminated against. Basically, “continuous coverage” is a con, a “first come, first serve” lottery that doles out the right to fairness like it’s a privilege, a prize in some twisted game, and then snatches it out from your hands if you fall on hard times or dare to exercise your freedom of choice.

Under “auto-enrollment,” states can sign you up for insurance without your consent, but you can opt out. Basically, the Republicans are assuming that the problem with the insurance market is that Americans are so stupid that they aren’t signing up for insurance that they need and can afford.

Astonishingly, the Republicans have simply taken the provisions of Obamacare and made them temporary — and called it “reform”! We’ll give you fair prices, but only for a little while. We’ll require you to sign up for insurance, but only until you back out.

The third provision confirms this ploy. Just like the ACA, the PCEREA offers tax credits to Americans who purchase insurance on the individual market. The only difference is that the Republicans’ tax credits are far less generous, helping far fewer people.

Finally, the PCEREA addresses Medicaid by restricting its availability to only certain types of Americans, apparently the ones whom the Republicans deem worthy: pregnant women, children, the disabled — but not, for example, working parents. It would also change Medicaid into a block grant program, where it would get a chunk of money every year regardless of how much it needs, leaving most states with tremendous shortfalls during recessions and leaving patients out in the cold when they need help the most.

This last provision is just cruel, but the Republicans can slip it into the bill because the rest of the proposal looks so thoughtful and measured that they’re hoping you won’t notice that it will do almost nothing to address the serious problems ailing our health care system. It is little better than the status quo that existed before Obamacare — and in that sense, they haven’t really offered an alternative after all.

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This op-ed was published in the Huffington Post, and an abbreviated version was published in the South Florida Sun-Sentinel.

Does Obamacare Infringe on Our Liberty? Or Does It Give Us Even More Freedom?

What right does the government have to make you buy health insurance?

That’s the question that riles Obamacare critics the most. It’s not the premiums or the website or the dropped coverage. It’s the infringement on their liberty.

Does Government Threaten Our Freedom?You hear it all the time: “This is a free country!” That’s what everybody says. But what do they really mean? Do they know what freedom is?

It seems obvious at first. Freedom is lack of coercion. Therefore, anything the government makes you do infringes on your freedom.

But there are different types of coercion, and the government isn’t the only one doing the coercing.

Let’s say that you want your daughter to attend the best school in America. But you can’t afford the tuition. Do you really have freedom of choice? If you choose the school you want, they won’t let you through the front door. If you force your way in, they’ll arrest you.

So you “choose” a more affordable school. You wanted a better school, but they forced you to settle for a different one. Sounds like coercion to me.

Let’s consider another example. You want to retire at the age of 65. You’ve worked hard throughout your entire adult life. Unfortunately, wages haven’t risen, and the bills kept piling up. You saved as much as you could, but it’s only enough to live off for a couple years. Oh, and one more thing: Social Security and Medicare don’t exist.

If you “choose” to retire, you’ll go broke. You’ll go without preventive health care. Your chances of dying early will increase significantly.

So you have a choice: Keep working or die young.

In this case, you actually have less freedom because the government is less involved. Without Social Security and Medicare, you do not have the freedom to choose a long, healthy retirement.

Freedom requires more than the absence of laws and taxes. True freedom of choice requires the capability to make that choice — and the free market doesn’t always give us that capability.

Jobs are scarce. Most of us don’t have the freedom to work anywhere we want. We take what we can get. For many of us, that means working at a company that doesn’t pay for our health insurance. So we “choose” to buy insurance on the individual market.

Before Obamacare, the individual market charged really low rates to healthy people and really high rates to sick people. So the people who needed insurance the most couldn’t afford it. They didn’t have the capability — and therefore the freedom — to buy it.

Obamacare outlaws that kind of discrimination. It requires insurers to charge the same rates to healthy and sick people alike, and that means that healthy people will have to pay higher rates. Some of them won’t want to, so they’ll stop buying insurance. When they drop out, they leave behind the sicker people who are most costly to insure, forcing insurers to raise rates even more. It’s a vicious cycle, a “death spiral,” that results in almost everyone being priced out of the market.

Virtually no one will have the freedom to buy health insurance on the individual market.

And that’s why we have an individual mandate. If the healthy people don’t drop out, there’s no death spiral, and the insurance remains affordable for the people who need it the most.

The government gives them a freedom that the free market cannot. It gives them the capability to purchase health insurance.

If we choose not to buy insurance, we pay a penalty. As Supreme Court Chief Justice John Roberts has written, “it makes going without insurance just another thing the Government taxes, like buying gasoline or earning income.” Those taxes pay for our roads and Army and Navy and Social Security and Medicare — and those things give us the freedom to live a life that we often take for granted. Without those taxes, without those government-funded investments, we could not call ourselves a free country.

In the same way, without Obamacare, without the government making us buy health insurance, we would be condemning millions of Americans to lives without health care. We would be restricting their freedom. And what right do we have to do that?

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This op-ed was published in today’s South Florida Sun-Sentinel and Huffington Post.

Why #SCOTUS Upheld #ObamaCare

In celebration of the Supreme Court’s historic decision to uphold the individual mandate of the Affordable Care Act, we reproduce an excerpt from Chief Justice John Roberts’s opinion on behalf of the majority:

Under the mandate, if an individual does not maintain health insurance, the only consequence is that he must make an additional payment to the IRS when he pays his taxes. That, according to the Government, means the mandate can be regarded as establishing a condition—not owning health insurance—that triggers a tax—the required payment to the IRS. Under that theory, the mandate is not a legal command to buy insurance. Rather, it makes going without insurance just another thing the Government taxes, like buying gasoline or earning income. And if the mandate is in effect just a tax hike on certain taxpayers who do not have health insurance, it may be within Congress’s constitutional power to tax.

The exaction the Affordable Care Act imposes on those without health insurance looks like a tax in many respects. The “[s]hared responsibility payment,” as the statute entitles it, is paid into the Treasury by “taxpayer[s]” when they file their tax returns. It does not apply to individuals who do not pay federal income taxes because their household income is less than the filing threshold in the Internal Revenue Code. For taxpayers who do owe the payment, its amount is determined by such familiar factors as taxable income, number of dependents, and joint filing status. The requirement to pay is found in the Internal Revenue Code and enforced by the IRS, which—as we previously explained—must assess and collect it “in the same manner as taxes.” This process yields the essential feature of any tax: it produces at least some revenue for the Government.

We have similarly held that exactions not labeled taxes nonetheless were authorized by Congress’s power to tax. In the License Tax Cases, for example, we held that federal licenses to sell liquor and lottery tickets—for which the licensee had to pay a fee—could be sustained as exercises of the taxing power. And in New York v. United States we upheld as a tax a “surcharge” on out-of-state nuclear waste shipments, a portion of which was paid to the Federal Treasury. We thus ask whether the shared responsibility payment falls within Congress’s taxing power, “[d]isregarding the designation of the exaction, and viewing its substance and application.” (United States v. Constantine). [Other examples include:] Quill Corp. v. North Dakota (“[M]agic words or labels” should not “disable an otherwise constitutional levy”); Nelson v. Sears, Roebuck & Co. (“In passing on the constitutionality of a tax law, we are concerned only with its practical operation, not its definition or the precise form of descriptive words which may be applied to it”); United States v. Sotelo (“That the funds due are referred to as a ‘penalty’…does not alter their essential character as taxes”).

Although the payment will raise considerable revenue, it is plainly designed to expand health insurance coverage. But taxes that seek to influence conduct are nothing new. Some of our earliest federal taxes sought to deter the purchase of imported manufactured goods in order to foster the growth of domestic industry. Today, federal and state taxes can compose more than half the retail price of cigarettes, not just to raise more money, but to encourage people to quit smoking. And we have upheld such obviously regulatory measures as taxes on selling marijuana and sawed-off shotguns. Indeed, “[e]very tax is in some measure regulatory. To some extent it interposes an economic impediment to the activity taxed as compared with others not taxed.” That [the law] seeks to shape decisions about whether to buy health insurance does not mean that it cannot be a valid exercise of the taxing power.

While the individual mandate clearly aims to induce the purchase of health insurance, it need not be read to declare that failing to do so is unlawful. Neither the Act nor any other law attaches negative legal consequences to not buying health insurance, beyond requiring a payment to the IRS.

The Affordable Care Act’s requirement that certain individuals pay a financial penalty for not obtaining health insurance may reasonably be characterized as a tax. Because the Constitution permits such a tax, it is not our role to forbid it, or to pass upon its wisdom or fairness.

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This excerpt has been lightly edited to make it more readable to a lay audience.