Rand Paul, Senate Bill 222, Long-Term Contracts, and the AHCA
Rand Paul, like many Americans, doesn’t love the TrumpCare/RyanCare that came out of the house. Here is what Rand Paul thinks about healthcare reform.
In Paul’s Fox News article in which he promotes his Senate Bill 222, Sen. Rand Paul: Senate has chance to fix ObamaCare after the House didn’t, he makes it clear that he like many Americans isn’t happy with the House GOP healthcare bill.
His first complaint is one that will probably give progressives and liberals pause, that is,
“Virtually every Republican ran on dismantling the abomination of ObamaCare and fixing our broken health care system. Does the House Health Bill do that? I don’t think so, and I’ll tell you why…”
Yet his second statement right after that should give that some demographic hope,
“… There were many areas of reform considered – repealing regulations, cutting taxes, and introducing free market reforms into the system. The bill so far falls short on two of the three (it cuts taxes). But most importantly it falls short on free market reforms to lower prices and provide better, less expensive health care to millions of Americans.”
In other words, Paul is correctly pointing out that all the GOP bill does is cut taxes, it does not offer free market reforms to lower prices and provide better, less expensive health care to millions of Americans.
Finally, some honesty. The House keeps saying “choices” “solutions” “better healthcare,” but it is empirically evident from reading the bill and writing about it that it really is mostly just a tax break (for the rich and a bit for the rest of us… but at the expense of assistance programs).
Rand than goes on to rightly complain,
“The people who wrote the bill don’t really think they’ve solved the problem, either. Strong evidence for that is the House bill’s creation of a massive federal program to pay insurance companies to continue coverage for those who develop a “pre-existing” condition, aka become seriously ill without insurance.
By creating this $140 billion federal entitlement to perpetually fund a high-risk pool, the House acknowledges that the brokenness of our health insurance system will continue, and they have offered no other solution than a federal bailout to insurance companies and states.”
Again, this is generally right. The tens of millions kicked off their plan (over time) will have to rely on an underfunded risk pool. That risk pool is a giant burden to the tax payer. A giant risk-pool for those who can’t afford insurance is not a free-market, it is actually pretty far from it.
So, here let’s ask ourselves, “what is a free market.”
Well, a free market is a market in which the dollar speaks. In healthcare the dollar rarely speaks directly, this is because things are funded and subsidized, care is often accessed in emergencies, and many people are priced out of care (even some of those with plans due to out-of-pocket costs).
This is to say, if we want the free market to work, we need to tweak our current legacy system in a direction that allows it.
I know Paul and I agree on that, but I also know we aren’t in the same tent. That said, let’s see what is other tent solution is and see if it is better than the AHCA.
Rand goes on, nothing out subsidization distorts the market (not just subsidies for people, but healthcare subsidies for industry) but his point is encapsulated here,
“So, life insurance is often purchased for 20 years, and if you become sick during that 20 years and the risk of you dying increases, the insurance company bears that risk, not you. That’s how health insurance should work.”
In other words, why are we all buying this month-to-month product when our health is something that we need to care for for a lifetime?
That is a refreshing outlook.
Specifically Rand goes onto say [paraphrasing], “only if we ease up on regulation and allow people to band together into buying pools.”
Ok, so buying pools instead of high-risk pools, and pools where you can buy in for decades rather than per-month.
That sounds closer to a solution than the AHCA, but as Rand notes, “insurance companies will NEVER, out of the goodness of their hearts, offer such a product.”
Very correct, insurers don’t even offer annual policies outside of the workplace, why would they start offering 20 year policies to groups?
But wait, think about what Rand is saying here with his Senate Bill 222 (the one that contains these ideas).
What he is really saying is that consumers should be able to be in a large group and buy a long-term policy.
OK, well, see: “what a public option is.”
People on Medicare have Medicare, people on Medicaid have Medicaid, people in the employer market have a group plan, that just leaves the 15% or so who have to use the private market.
Why not create a single public option that people can buy into with a tax, then let people band into private groups if they want.
This gives even more choice. This public option doesn’t have to be a bureaucratic nightmare, in fact I’d suggest rolling Medicaid, Medicare, and the public option into one catastrophic coverage option and then offering tiers (like with Medicare) and then letting private companies sell alternative plans.
We could split the difference and offer annual contracts (not 20 year ones), and then those other groups could band together for longer contracts.
This is to say, Rand and I aren’t in the same tent, but I do get the feeling like Rand and some other sensible Americans who care about both the free market and ethics/morality are in another tent. That tent is “actually fix the problems facing the American people and healthcare, not by shifting money from the poor to the rich, or the sick and old to the rich, but by helping to ensure we maximize free-market principles so all Americans rich and poor can vote with their dollar and access healthcare.
Senators like Rand Paul will be working on the AHCA, it is important to express to them that fixes are welcome, and that the AHCA as it is doesn’t cut it.
We know industry wants a tax break, we know the House promised them one, but a bill that doesn’t fix healthcare too is not acceptable. That is of course an opinion, but I have trouble imagining the American who thinks that tax breaks for the rich at the expense of the sick and poor is the solution to our healthcare problems.
The solution is the only solution there ever is, that is to embrace economic principles that work in a way that also ensures universal coverage.
NOTE: So, do I love The Obamacare Replacement Act (S. 222), no. But do I welcome the intention of putting power in the hands of consumers yes. The Rand Paul bill and the Ryan AHCA bill have a lot in common, like in the way the ACA and Bernie’s plan do, but Rand has some good ideas that didn’t make it into the AHCA. Given where we stand today, good ideas that aren’t already on the table are welcome. We should have been reaching across the aisle years ago, making a plan that was a little bit Rand, a little bit Bernie, and a little bit Obama and Ryan. Instead one faction keeps offering half a solution, maybe the Senate will offer us a turning point.