The Republican Senate’s third failed attempt at repeal and/or replace was a surprise to many, including this writer. I believed they would get something passed, even for the limited purpose of getting a bill back to the House, and into conference committee. Senator Graham subsequently announced he had a plan which he would move forward with, but that too seems to have died as Senator McConnell said the Senate is moving on. President Trump has continued to attack on Twitter those Republican Senators who voted against the last Senate bill, Mr. McConnell and Republicans in general for the failure to pass healthcare reform. A group of house members from the “Common Sense Caucus” have issued a set of principles to create a framework for healthcare reform. As yet, beyond the press release, not much has happened. Will Republicans revisit healthcare, or, in fact, let the repeal and replace mantra die.
Senators Lamor Alexander and Patty Murray have scheduled hearings on how to stabilize the insurance markets under Obamacare. President Trump has not determined how the administration will handle a variety of issues related to Obamacare, and in particular, insurance company payments and the healthcare exchanges. There is no doubt that action needs to be taken to modify, amend, or fix Obamacare. The question is who will do what, when, and how will it affect our premiums? The issue of Obamacare and health insurance in general are certainly important, as healthcare is roughly twenty percent (20%) of our economy and with or without insurance it affects us all.
The mantra coming out of both Republicans and Democrats mouths to the effect that various plans they offer will reduce healthcare costs is a complete and utter misrepresentation of reality. Obamacare contained provisions that it was hoped would reduce healthcare cost while Republican plans are aimed at reducing health insurance costs and not healthcare costs. One might argue that these two are intimately linked, and thus, if you reduce insurance costs you will reduce healthcare costs. Then again, likely not.
The Republicans’ opposition to Obamacare has been based upon primarily two objections – Obamacare was shifting costs from one socioeconomic group to another socioeconomic group; and that the mandates were un-American. There is some truth to the former, no doubt. The Republicans, on the other hand, are involved in their own form of cost shifting. If you lower insurance premiums by increasing deductibles, or removing coverages, you have cost shifted either to the insured, since those monies will come out of pocket, or to the providers if those with plans that cover less or have higher deductibles do not have the resources with which to pay for that care. Senator Cruz, during the Republican health debate offered a plan which essentially provided that insurance companies if they offered plans with the full spectrum of Obamacare mandated coverages could then offer plans with less coverages. The assumption being that the coverage that included all of the Obamacare mandates would be more expensive (higher premiums), while the plan covering less would have a lower premium. Let’s assume for the sake of argument that in both plans the deductible is essentially the same. What is the difference? The difference is that the lack of coverage becomes an immediate out-of-pocket expense to the patient. It is not too difficult to conjure up a situation where a patient arrives at a hospital after suffering a heart attack, it is not one of the covered areas, and now that must be paid out-of-pocket. Will the average American have the ability to do that, I think not.
Reduction in healthcare costs should be our goal. A good start would be by reining in drug costs, finding ways to make patients compliant (taking their medications, visiting doctors for checkups and securing necessary treatment), as well as shifting some of the risk for healthcare outcomes to the providers. New York is addressing the latter with its Value Based Payments Plan as it strives to work through this complex algorithm. Obamacare pointed us toward this meaningful reform, if Republicans were serious about healthcare reform they’d fix Obamacare and address drug costs.
The public should not be fooled, what Republicans in Washington are offering is not healthcare reform.
Mr. Owens is a former member of Congress representing the New York 21st, a partner in Stafford Owens in Plattsburgh, NY and a Senior Advisor to Dentons to Washington, DC.
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