The always great Austin Frakt and Aaron Carroll at The Incidental Economist have provided a summary of the new Republican plan to replace Obamacare, The Republican Study Committee Has a “Replace” Plan. Their take on it is very much the same as what I wrote yesterday, Republicans New Healthcare Distraction. That isn’t too surprising, given that much of my thinking about healthcare has been informed by Aaron Carroll. But as usual, they noticed some things that I had missed.
The big part of the Republican plan is to provide a standard tax deduction for purchasing health insurance. The current system is unfair. If your employer provides you with insurance, he gets to write it off; but if you buy insurance for yourself, you don’t get to write it off. So the Republican plan allows individuals to write off up to $7,500 per year for insurance. But there are two problems. First, this is going to be a very expensive program. It’s weird: when the government spends money to pay for a program, conservatives understand that this costs money. But when they cut taxes to pay for a program, they somehow think it is free. Regardless, of what they think, this program is not free.
The second problem is that this is basically just another tax cut for the rich. Most of the poor will not be able to afford health insurance, so they won’t get the tax break. Those poor people who do manage to buy health insurance will not see their taxes go down by much because they aren’t paying high marginal tax rates. So the program is little more than a giveaway to those relatively wealthy people who are already buying insurance on the open market. It will do very little to make insurance affordable for those without it now.
That is generally true of the Republican “replacement” program. Obamacare has two major goals. First, it tries to provide health insurance to those who do not currently have it. Second, it tries to reduce healthcare costs. Even though the program has not been fully implemented, we are already seeing success with these two goals. But the Republican plan does nothing to reduce healthcare costs other than the usual “magic of the marketplace” nonsense. And at best it does nothing to provide health insurance to those who currently have none.
It is more likely that the plan will make healthcare less affordable for those without it. A good example of this is the tired old conservative idea to allow insurance companies to sell policies across state lines. Frakt and Carroll note, “[The policies will] be great if you’re young, healthy, or wealthy enough to afford to fill in the coverage gaps. They’ll be terrible if you are older, have a chronic condition, or, again, if you’re low income.” We see this time and time again with their ideas. It really is as simple as this:
What the Republicans seem to be saying is, “Obamacare is a law that involves healthcare, so here is a replacement bill that also involves healthcare.” There is no consideration of what the new healthcare law is actually being used for. And that’s because the Republicans are not putting forward this “replacement” plan in good faith. It is only put forward as political cover. It is like replacing SNAP (food stamps) with another “poverty program” that let’s everyone write off their food purchases.
Of course, the media is not covering it like that. For example, the Christian Science Monitor covered it as though it were a real plan and only mentioned a single (weak) liberal complaint against it. And that’s the big problem with political coverage: the media will always present clear Republican nonsense as though it were a real effort at legislation. There continues to be no downside for the Republicans’ continuing efforts to destroy civil society. And so the Republicans continue to try to destroy civil society.