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Republican governors aren’t ‘letting Obamacare fail,’ they’re actively sabotaging it, says Dean Baker, co-director of the Center for Economic and Policy

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SHARMINI PERIES: It’s The Real News Network. I’m Sharmini Peries coming to you from Baltimore. The Affordable Healthcare Act is a thorn in the eye of Republican lawmakers. But despite repeated promises to repeal and replace Obamacare, the healthcare bill is stuck in the Senate. The Senate cannot agree on what kind of healthcare system they would like to promote. Senate Minority Leader, Chuck Schumer, responded to the situation as such. Let’s have a look. CHUCK SCHUMER: Now it’s getting clearer and clearer that Senate Republicans won’t be able to pass either their bill or a backup plan of repeal without replacement. We Democrats believe that the time has finally come for our Republican colleagues to take us up on our offer of working together to improve the healthcare system rather than sabotage it. Evidently, President Trump is proposing a different path. He wants to throw up his hands rather than roll up his sleeves to work with us and solve the problem. But let’s be very clear about what the President is proposing and where his path would lead. The President would not be, quote, “letting Obamacare collapse.” He is actively, actively trying to undermine the healthcare system in this country using millions of Americans as political pawns in a cynical game. SHARMINI PERIES: Dean Baker from the Center for Economic Policy and Research wrote in his recent blog that even without a vote in Senate, Obamacare is already in the process of collapse because Republican governors in red states are sabotaging it or, at least, refusing to make the minimal effort to keep it alive. Dean Baker is the co-director of The Center for Economic Policy and Research in Washington, D.C. Good to have you with us, Dean. DEAN BAKER: Thanks for having me on. SHARMINI PERIES: So Dean, in your blog as I said, you wrote that Obamacare is collapsing, specifically in red states, because of the lack of competition in the exchanges. This means that people may still purchase insurance, but they have no real choice as to an insurer when there is only one insurer available in their area. So explain that to us and explain how it is being sabotaged. DEAN BAKER: A lot of people probably heard Donald Trump and many of the Republicans in Congress make a big point of saying how we have over 1300 counties in the country where there’s only one insurer. And there’s, in fact, a few counties where there’s at this point no insurers in the exchange. And they’ve harped on this and said, “Well, this is the collapse of Obamacare.” And we looked at this more closely because the map’s quite striking when you look at it. Overwhelming the counties where there’s only one insurer are Republican states. So we just did a simple calculation. We said, “What’s your probability of being in a county where there’s only one insurer in the exchange?” And in a Republican state, say, with a Republican governor – straightforward definition – it’s over 20 percent. So over 20 percent of the people who live in states with Republican governors have one insurer in their exchange. And again, in some cases, zero. If you’re in a Democratic state – and we pulled out North Carolina because they’ve had a Republican governor and they still have an overwhelming Republican legislature – so we just pulled that one out. They elected a Democrat in January. Otherwise your probability of being in a county with only one insurer is just 1.8 percent. So the basic story, this idea of the competition in the exchange disappearing, this is overwhelmingly a Republican state problem. It’s basically – you could always have more competition; it’s generally good – but it’s basically not a problem in the states where Democrats are governors. And when we look at it more closely, there’s sort of a simple explanation here. Basically, the Democrats, Democratic governors have tried to make the act work, and part of that was expanding Medicaid. All the states with Democratic governors expanded Medicaid. And what that meant was you directly extended care to a lot of people, but also you pulled a lot of the less healthy people out of the exchanges, which made it a better market for the insurers. They’re always happy to insure healthy people, so if you pull out, less healthy people out, it makes a better market. The other thing that they did was they tried to promote the exchanges. They tried to encourage people to buy insurance. And kind of a simple story there. People who are less healthy, you don’t really have to prod them in the sense that they know they’re going have big bills so they’re happy to buy the insurance. It’s the more healthy people. So you get a more balanced exchange if you make an active effort to try and get people into the exchanges. So that seems to be the story in the states where Democratic governors were in control. Whereas in the Republican states, they didn’t want the Affordable Care to work and, in a lot of cases, it’s not working very well. SHARMINI PERIES: Now, one of the criticisms on the part of the Republicans who were promoting the repeal in their new act is that there isn’t enough young people who are registering for insurance; young healthy people, that is, that are registering for health insurance. And this causes an imbalance in the system that can cause a deficit. Explain what they actually mean by that. And is it a deficit? DEAN BAKER: Well, the logic – and they focus on young people and put the word in “healthy” – we wanted healthy people … Yeah, well we want healthy. For the logic of the insurance to work you need healthy people, because you do obviously have people who are less healthy and they’re going to cost a lot of money. And if they aren’t paying their premiums, that means the insurance companies lose money. And it’s not a question of liking it; the insurance companies are not liking it. They aren’t going to be in there to lose money. So you need healthy people in the exchanges. And the argument that the Republicans have made is, “Oh, this is unattractive. Healthy people aren’t going to the exchanges.” The reality is, we’ve actually had somewhat more people insured that had been projected. Now, they’re not in the exchanges in the number projected, and the reason for that is more then are now covered by employers. So the projections made back in 2012 before the Affordable Care Act took effect assumed that you’d have about three or four million fewer people insured by their employers, and that those people would have ended up in the exchanges. As it turned out, employers haven’t dropped coverage at the same rate as was expected. So insofar as people aren’t showing up in the exchanges, healthy people, that’s the biggest factor. And when I’m saying ‘healthy people’ I’m linking that to employer provided insurance. There’s a simple story there. If you’re working full time – which is the basic story if you’re getting employer provided insurance – then you’re reasonably healthy as a general rule. So by virtue of the fact that you have, say, four million more people with employer provider insurance than had been projected, you’re keeping relatively healthy people off the exchanges. So that’s the dynamic. I mean, you could say, “Well, that’s a problem. That does mean fewer healthy people on the exchange.” But it’s not that all these people are saying, “Oh, that’s a bad deal.” What’s happening is, their employers are providing them insurance, so why should they go on the exchange. SHARMINI PERIES: All right. So when we are talking on the left and we’re debating the Obamacare and pushing for that, or where some states and some parts of the healthcare movement have certainly gotten behind the single payer system. And you recently said in a New York Times piece, you suggested in light of the Republican policy, Democrats may decide for a single payer system. Why did you say that, and is that a feasible option for the Democrats? DEAN BAKER: Well, I think people realize this is not where we wanted to end up. Maybe that was always the case, but I think it’s become very clear the Affordable Care Act might be a big step forward. You have over 20 million, almost 30 million people who’ve gotten insurance who didn’t previously have it. And that’s a really, really big deal. But you still have a lot of high co-pays, a lot of deductibles, it’s unnecessarily complicated. So I think people realize increasingly that we do want something like – I’m tempted to say universal Medicare but even that, of course, isn’t a pure single payer system – but in any case, something like the Canadian system where you have a universal system that everyone’s in. So I think that’s a feasible program to move towards. We will not get there in a single step, though. I don’t it’s plausible to think best case scenario we get someone good in the White House in 2021, and Democrats control Congress. We’re still not going to get there in a single step. So I think we have to think, how could we do this piecemeal? How could we pull more people in, lower the age to Medicare, at the same time that we do things like have a public option and exchanges, better subsidies so that people have lower deductibles, lower co-pays? So I think we’d have to think about how we sort of say, okay, single payer’s where we want to get, but we have to do this piecemeal and have kind of a process for getting from here to there. SHARMINI PERIES: All right. Dean, I thank you so much for joining us today and explaining this part of the conversation in Washington, and look forward to having you back. DEAN BAKER: Great. Thanks a lot for having me on. SHARMINI PERIES: And thank you for joining us here on The Real News Network.

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Dean Baker is co-director of the Centre for Economic and Policy Research