The latest salvo in the left's Obamacare narrative is that Donald Trump will not be able to keep insurance available to those with chronic illnesses or to allow children to stay on their parent's policy to age 26 without all the taxes that Obamacare includes. It's an article in the New York Times, so it must be correct, or so they are telling us. (One might remember that the same New York Times had the odds of a Hillary victory at more than 95% early in the evening on election day.)
There's a problem with this story; however. Basically, it's completely wrong. Here's why:
1. The biggest cost of Obamacare has been the payment by the federal government of all the costs for the people added to the Medicaid rolls in many states. If that cost is reduced because eligibility goes back to more reasonable levels, there will be a lot of money made available.
2. Another major cost of Obamacare has been the massive bureaucracy set up to administer the program. If Obamacare is gone, so too the salaries of all those bureaucrats will disappear.
3. A third major cost of Obamacare has been the items required by the law to be included in every health insurance policy. How many people really need pediatric dental coverage? Everyone has it, but those without children don't need it. How many gay couples need maternity coverage? How many people could do quite well without an unlimited cost ceiling? Millions of people did quite fine for many decades with an annual maximum recovery. Getting rid of many of these items will reduce the cost of insurance; that will reduce the massive cost of subsidies currently being paid to individuals. That means more federal savings.
4. Keeping children on one's policy need not be free. It would make sense for there to be some sort of sliding scale. Maybe at age 21, there would be a small additional payment above the family rate. At age 22 that would rise until at age 26, the full amount would be charged. The idea of keeping children on their parent's policies has been to help people newly entering the workforce to afford coverage. There's no reason why the rest of us have to pay the full amount.
5. Similarly, those with illnesses should not just get a free ride. People ought to pay something for the extra costs of their medical care. For example, there can be high risk policies for those who could not have gotten insurance in the days before Obamacare. Those policies might cost 50% more or even double the policies for everyone else. For people who are unable to afford this coverage, there could be federal assistance, but that would be far from everyone.
6. If the federal subsidies for low income individuals were replaced with some sort of federal health savings credit for every low income taxpayer, the cost structure could change dramatically. Imagine no subsidies but instead people getting funds that can be used only for medical costs. The point here is not that this is the plan pushed by Trump, but rather that by adjusting such a plan, costs could be reduced while medical care could be increased.
There's a problem with this story; however. Basically, it's completely wrong. Here's why:
1. The biggest cost of Obamacare has been the payment by the federal government of all the costs for the people added to the Medicaid rolls in many states. If that cost is reduced because eligibility goes back to more reasonable levels, there will be a lot of money made available.
2. Another major cost of Obamacare has been the massive bureaucracy set up to administer the program. If Obamacare is gone, so too the salaries of all those bureaucrats will disappear.
3. A third major cost of Obamacare has been the items required by the law to be included in every health insurance policy. How many people really need pediatric dental coverage? Everyone has it, but those without children don't need it. How many gay couples need maternity coverage? How many people could do quite well without an unlimited cost ceiling? Millions of people did quite fine for many decades with an annual maximum recovery. Getting rid of many of these items will reduce the cost of insurance; that will reduce the massive cost of subsidies currently being paid to individuals. That means more federal savings.
4. Keeping children on one's policy need not be free. It would make sense for there to be some sort of sliding scale. Maybe at age 21, there would be a small additional payment above the family rate. At age 22 that would rise until at age 26, the full amount would be charged. The idea of keeping children on their parent's policies has been to help people newly entering the workforce to afford coverage. There's no reason why the rest of us have to pay the full amount.
5. Similarly, those with illnesses should not just get a free ride. People ought to pay something for the extra costs of their medical care. For example, there can be high risk policies for those who could not have gotten insurance in the days before Obamacare. Those policies might cost 50% more or even double the policies for everyone else. For people who are unable to afford this coverage, there could be federal assistance, but that would be far from everyone.
6. If the federal subsidies for low income individuals were replaced with some sort of federal health savings credit for every low income taxpayer, the cost structure could change dramatically. Imagine no subsidies but instead people getting funds that can be used only for medical costs. The point here is not that this is the plan pushed by Trump, but rather that by adjusting such a plan, costs could be reduced while medical care could be increased.
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