In the months following Trump’s inauguration, Congress had a singular focus: to dismantle the Affordable Care Act. The goal was twofold; first, by repealing the ACA, GOP lawmakers would finally fulfill seven years’ worth of campaign promises to their constituents. And second, the elimination of Obamacare would free up a lot more money that could be used to offset that golden goose of the Republican Party: tax cuts.
Unfortunately, when it comes to being nefarious masterminds, the GOP only meets half the requirements, so repeated attempts to repeal the Affordable Care Act failed spectacularly. Like villains from “Scooby-Doo,” congressional Republicans took their botched healthcare plans and skedaddled, yelling “THIS ISN’T OVER YET! YOU’LL SEE!” over their shoulders.
The next line item — line item number two for a Congress that’s been in session for nearly a year, if you’re keeping score at home — is, of course, tax reform. Paul Ryan’s tax bill passed the House yesterday, bringing him one step closer to finally achieving the tax cuts he’s presumably been dreaming of since he was standing around a keg in college. (This is your periodic reminder that Paul Ryan is a tremendous dork.)
The tax bill is, predictably, not great for anyone not in the wealthiest 1% of Americans. Adherents of trickle-down economics — like Ryan and many in the GOP — believe that by giving the top 1% more money, they will, out of the goodness of their own hearts, reciprocate by spending more on their employees’ salaries. This idea, of course, does not work, but it offers enough political cover for Ryan and his pals to get away with giving their big-money donors massive tax cuts.
So how does Obamacare fit into all this?
The reason the GOP wanted to dismantle Obamacare before moving on to tax cuts was because the budget reconciliation period (which ended September 30th) would have allowed them to do so with a simple majority rather than with 60 Senate votes. Once that period ended, the GOP had to take another tack to undercut the ACA. And that, my friends, is where tax reform comes in.
In order to pay for some of the tax cuts outlined in the bill, the GOP has taken some extreme measures: Ryan’s new bill is estimated to add nearly $1.5 trillion to the deficit over the next decade, a far cry from the “we must shrink the deficit to ZERO in the next 10 years” plan the GOP endorsed two years ago. But there’s another cut the GOP wants to make to help pay for these massive tax cuts for people who don’t need them: the individual mandate.
The individual mandate — perhaps the most unpopular component of Obamacare — requires every American to have health insurance or pay a penalty for not having it. The GOP, of course, believes the individual mandate is un-American and a glaring example of government overreach; after all, who is the government to tell the free people of the United States of America that they should have health insurance? It’s their right not to, get your laws off of my healthcare, Don’t Tread on Me, and so forth.
Whether or not you believe you shouldn’t be punished for not having health insurance — even President Obama himself took a lot of convincing on the matter — the reason Obamacare works (and it does) is because of the individual mandate.
The Affordable Care Act required private insurance companies to offer health care plans to everyone, even those with pre-existing conditions. Naturally, insurance companies balked at this idea — insurance companies profit when people don’t use their plans, so by adding people who were guaranteed to use their plans, the profits would inevitably decrease. The individual mandate was an incentive for insurance companies: to offset the increased cost of covering people with pre-existing conditions, the mandate would also get people to buy insurance that were unlikely to ever use their policies (mostly young people).
The mandate also provided an additional benefit: fewer ER visits (and lower costs to medical providers). Since everyone had insurance anyway, more people would go to the doctor for medical issues they might otherwise have put off until they became emergencies. This allowed medical providers to focus less on curative work — i.e., fixing problems after they’ve already become problems — and more on preventative work.
As you might imagine, preventative medicine is a lot cheaper than curative medicine. For example: imagine that you feel like you’re getting a cold. With preventative medicine, you’ll go to your primary care physician and find out you have a sinus infection. But no worries; they diagnose it, give you antibiotics to break it up, and you’re on your way, all for around $200 total — you pay some of the cost (say, $25) with your copay, the insurance company pays the rest. Easy, right?
But with curative medicine, that’s not what happens. You don’t want to spend the money or time on a doctor for a simple cold, so you take some Dayquil and wait for it to pass. Only it doesn’t, and before you know it, you have a full-blown sinus infection, one that’s so bad that you have to go to the emergency room. The bill for that: $1,000 — not only does your ER visit cost you more in copay money, it also costs the insurance company more. And that’s assuming you even have insurance; without the individual mandate, you could get stuck with a $1,000 hospital bill, just because you didn’t think you’d ever get sick.
Getting rid of the individual mandate also means that insurance companies will start losing money — all the people who thought “Eh, I really don’t need this insurance” will stop paying for coverage, leaving insurance companies with only the sickest and most needy. And in order to defray the higher costs of covering those people, insurance companies will — drumroll please — start raising premiums. That will lead to more healthy people who actually want insurance to get priced out of their own plans and decide to roll the dice with their health, which, in turn, will lead to even higher premiums for the sickest people who can’t afford to go without coverage. And on a long-enough timeline, even these people won’t be able to afford the coverage they need. All of this will inevitably lead to yet another round of GOP claims that rising premiums mean Obamacare doesn’t work, giving them precisely the pretext they need to repeal it once and for all.
Whether the GOP ultimately repeals Obamacare or simply puts it in an impossible position to succeed makes no difference — how quickly or slowly you yank the rug out is of little importance to the person standing on it. In the end, repealing the individual mandate is still a gross abdication of duty towards one’s constituents for no other reason than to protect the financial interests of the donor class.
No wonder the GOP is so excited about it.