Republican Healthcare Plan to Nix States’ Ability to Regulate Insurance
Republicans take up the issue of state’s rights when it comes to the protection of minorities, but have no problem ignoring it when corporate profits are at stake, says economist Dean Baker
SHARMINI PERIES: It’s The Real News Network. I’m Sharmini Peries coming to you from Baltimore.
Protests against the repeal of the Affordable Care Act, also known as Obamacare, have been growing throughout the U.S. over the past few weeks. During his address to the Joint Session of Congress on Tuesday, President Donald Trump repeated his promise to repeal the ACA, and replace it with something better. Let’s have a look.
DONALD TRUMP: Tonight I am also calling on this Congress to repeal and replace Obamacare…
With reforms that expand choice, increase access, lower costs, and at the same time provide better healthcare.
Mandating every American to buy government approved health insurance was never the right solution for our country. The way to make health insurance available to everyone, is to lower the cost of health insurance, and that is what we are going to do.
Obamacare premiums nationwide, have increased by double and triple digits. As an example, Arizona went up 116% last year alone. Governor Matt Bevin of Kentucky, just said Obamacare is failing in his state, the State of Kentucky. And it’s unsustainable, in collapse. One third of the counties have only one insurer, and they’re losing them fast. They are losing them so fast. They’re leaving, and many Americans have no choice at all.
There’s no choice left. Remember when you were told that you could keep your doctor and keep your plan? We now know that all of those promises have been totally broken. Obamacare is collapsing, and we must act decisively to protect all Americans.
SHARMINI PERIES: And here is Senator Bernie Sanders reacting to Trump’s comments on the ACA on Wednesday morning.
BERNIE SANDERS: Good evening, before I respond to President Trump’s speech, and what he said tonight, I wanted to say a few words about what he didn’t say. Because when you analyze the speech, sometimes what is more important is what somebody does not say, as opposed to what they actually say.
Some examples: At a time when over half of older Americans have no retirement savings, I did not hear President Trump say one word, not one word about social security or Medicare. During the campaign, as we all remember, President Trump promised over and over and over again that he would not cut social security, Medicare, or Medicaid.
SHARMINI PERIES: Until recently it has been unclear exactly what the ACA replacement would look like. However a few days ago, a draft of the Republican plan was leaked, and according to this document some of the main provisions include, eliminating insurance subsidies for low income families, and eliminating the expansion of Medicaid.
Now joining us to talk about these plans for healthcare is Dean Baker. Dean has written extensively about the ACA, and Mr. Baker is a Co-Director of the Centre for Economic and Policy Research, and is the author of, “Rigged: How Globalization and the Rules of the Modern Economy Were Structured to Make the Rich Richer”.
Dean, thank you so much for joining us today.
DEAN BAKER: Thanks a lot for having me on.
SHARMINI PERIES: So Dean, let’s begin with what we have heard thus far about the Republican replacement plan for Obamacare.
DEAN BAKER: Well, a couple of points I want to make. First off, you had the clip where Trump was saying that Obamacare is collapsing. That’s just a lie. There are more people on the exchanges this year than last year. There are, no doubt, problems, so you know, good for him; he’s discovered that the healthcare system has problems. The rest of us knew that, but you know, he’s a little slower than the rest of us.
Anyhow, it’s not collapsing. They’re trying to make it collapse. If it does collapse, then it will be because they killed it. It was not collapsing at the point he took office that much is clear.
Now, in terms of the replacement, it’s remarkable, here we are, over a month of his administration; we still have no clear idea. I mean, they want to get rid of the Medicaid expansion; they want to get rid of the mandate that people have to get insurance. But what does their plan look like?
I’m sorry, I can’t tell you, ’cause they haven’t given us that information. So, we’re in a situation where they’re telling us they’re killing Obamacare, so people cannot count on the policies they have now, beyond the end of this year. But we have no idea what’s going to be there in 2018. That’s pretty damn irresponsible.
SHARMINI PERIES: So, Dean, a major reason that Trump keeps mentioning, and the notion of repealing the ACA, is that healthcare premiums have skyrocketed in some states. And he mentioned some of those states. What is your response to that argument?
DEAN BAKER: It’s a really important point. A lot of people are confused now. We already have insurers competing across state lines. So, the big insurance companies, United Health, Aetna, Sigma, they all offer policies in multiple states, in some cases maybe even all states. I can’t say for sure. But there’s nothing that prevents Aetna from offering policies in Ohio and Indiana and whatever other state they want.
What they’re talking about, is taking away the power of states to regulate insurance issued in those states. So, what they’re proposing is, if an insurer has a policy approved in any state in the country, I’m going to pick on Mississippi — I don’t know if they have bad regulation — but for purposes here, let’s say they do. So, they allow policy that’s very questionable to be approved in Mississippi. That means that in California, in New York, in Wisconsin and Minnesota, they have to let that same policy be sold there.
So, what they’re trying to do, is take away state’s power to regulate. That’s what they’re talking about. Insurers can already sell insurance in whatever state they want.
SHARMINI PERIES: Now this is contrary to normal Republican discourse, in terms of states having more autonomy.
DEAN BAKER: It’s 180 degrees at odds with that. And it’s really just kind of amazing — maybe I shouldn’t be amazed anymore — but, you know, states’ rights has always been this great principle for them. Well, they say that when it’s a question of protecting the rights of African Americans and other minorities. But when it comes to interfering with corporate profits, they’re totally willing to get rid of states’ rights, as though they’ve never heard of them.
SHARMINI PERIES: All right. And of course, another aspect of this is that the Republicans are proposing a tax-free health savings account. What is it? And would this be a problem, in your eyes?
DEAN BAKER: Look, and this is one of the great jokes that people familiar with healthcare policy — and we have to assume at least someone on the Republican side is. Understand that the whole point is to get people in a common pool. There’s radically different health outcomes. Most people are healthy, and that’s a great thing.
But we do have roughly 10% of the population, has extremely high expenses, average of over 50,000 a year. To make that affordable, you have to get people in a common pool. So, that means those of us who are more healthy, we’re lucky, we don’t have large expenses, we’re going to pay more than it costs to ensure us. Because the idea is, we want these people who are less healthy to be covered. If you don’t want them, fine, let them die in the street.
But they aren’t gonna say that. So, if you give me the option of having a health saving account, me, as a relatively healthy person, I’ll say, “Oh great. I’ll put, you know, 5,000 a year in this account, it’s tax privileged. If I actually need the money for healthcare, I could use it for that, but otherwise it can accumulate year after year. I can save a lot of money that way. That’s great for me.”
But what that means is, for the less healthy people who really need the insurance, they’re going to be paying really high premiums, and the Republicans have nothing but empty promises to offer them.
SHARMINI PERIES: Right. And the other aspect of all of this is, that Republicans are proposing a replacement plan to eliminate subsidies, and the Medicaid expansion plan. What is it, and what will the consequences of this be?
DEAN BAKER: Well, again, between the Medicaid expansion and the subsidies, in the ACA, and also, of course, the requirement that insurers provide insurance for people without discriminating, based on their conditions, that extended coverage to 20 million people.
You take those away, you take away the Medicaid expansion, you take away the subsidies, and you make a joke, we’ll just say, of the requirement that you can’t discriminate, ’cause they will be able to discriminate under the terms we’ve been hearing. You will see tens of millions of people lose insurance, and that to my view, is a really, really big deal.
That’s why there was pressure felt by both parties to have healthcare reform back in 2009, 2010. And I have to imagine that pressure’s going to be much stronger, when people see they could have had it, but the Republicans decided to take it away from them.
SHARMINI PERIES: Right. And, Dean, I guess one of the big points that resonates with everybody, is that ACA has, in fact, in terms of premiums, sky-rocketed, doubled in some cases, for most people. What is your response to that argument that Trump was making yesterday in his speech?
DEAN BAKER: Well, it’s a couple of points. First, it is misleading. There were some states that did have large increases. Part of the story there were the original premiums were very low. So, when they first offered plans back in 2014, the premiums were considerably below what had been projected.
Now, whether they were looking to get a large share of the market, or whether they just had badly under under-estimated the cost, who knows? But with this, what we’ve been seeing with these increases, has been to a large extent, catch-up. But I will say, obviously there are problems.
You know, … problems, there’s a lack of competition, many of us wanted there to be an option for people to buy into a public plan, say, a Medicare/Medicaid type plan, that would have lower costs and ensured that there was at least some element of competition to markets. It would be great to have that. And if you want to be serious, how can we fix it? Well, that would be a great way to go.
But, to just say, “We’re going to throw this out and jump into the unknown, and we’ll see what comes up.” Well, that’s fine if you’re a billionaire like Donald Trump, and other people in his cabinet. But for people who actually need insurance, that’s a sick joke.
SHARINI PERIES: Right. And, so of course, now everyone is looking to people like you, who’ve actually looked into the details of Obamacare, and now what is supposedly being proposed, which we don’t know exactly what it is.
But where should people be focusing on, in terms of their critical views on what Trump is proposing?
DEAN BAKER: Well, you have to see how it is they propose extending coverage to people with pre-existing conditions, ’cause that’s a big issue. I mean, most people are healthy, cover most people, no big deal, they don’t have any health… For the bottom 50% of insurees, their average expenses are less than a thousand a year. No big deal to ensure them. That’s not an issue. The problem is those 10% with average expenses of over $50,000 a year.
So, how are those people being covered? And what they’re proposing is a lot of hand waving, at best. And basically, at the end of the day, I am fairly confident, most of these people won’t be covered, and what that means is, the people who really need care, aren’t going to get it.
SHARMINI PERIES: All right, Dean, we thank you so much. And we appreciate you coming on and giving us a very, very focused analysis on what’s going on, so that we can take it up in other aspects of our work. Thank you so much.
DEAN BAKER: Thanks for having me on.
SHARMINI PERIES: And thank you for joining us here on The Real News Network.