Wednesday, 02 August 2017 13:31

Louisiana Senator Cassidy at center of Trump's Obamacare repeal maelstrom

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cassidyAnother attempt, another stalled action to pare the bad aspects of the misnamed Patient Protection and Affordable Care Act (“Obamacare”). Another attempt, another stalled action to pare the bad aspects of the misnamed Patient Protection and Affordable Care Act (“Obamacare”). Where does that leave Louisianans and what does Sen. Bill Cassidy have to offer about this?

As to the first question, if you’re a more productive member of society, in a bad place. Keep in mind the law does little to improve health care access for the population as a whole, mainly achieving dramatic wealth redistribution. For Louisianans, health care insurance premiums for Affordable Care Act-compliant plans have increased on average between 10 percent to 20 percent in 2015; 6 percent to 30 percent in 2016; 23 percent to 41 percent in 2017; and scheduled for 2018 in a range from 12 percent to 36 percent.
In other words, in the worst of all scenarios, the law has helped triple non-group rates in Louisiana. Nationally, the average increase from 2013 to 2017 was 60 percent, well beyond the pace of medical inflation.

But people with incomes under 400 percent but above 100 percent of the federal poverty limit haven’t experienced much in the way of increases at all. The law subsidizes them, to the tune of an estimated $42.6 billion for 2017. This means that not only do middle-class-and-above Americans get hit with rapidly escalating premium increases but also their tax dollars largely fund the subsidies; this group paid almost 87 percent of income taxes. While they struggle to pay for health insurance, the 75 percent of filing households who pay only 13 percent get theirs nearly free.

Nor has Obamacare done anything to contain costs. In theory, stuffing more people onto insurance supposedly would encourage them to engage in more preventive medicine that should lower expenses. While a study here or there suggests this happened to a minor extent, most efforts show the law likely has had no effect on the gap between inflation and medical inflation, meaning the rate of increase of spending on medicine has not disproportionately slowed relative to all prices since the advent of Obamacare.
In fact, most of the research on the question, much of which predates Obamacare, shows preventive medicine does not save money because it often does not address root causes of disease – due to lifestyle choices – and it merely delays costly treatments – for example, maybe catching the onset of diabetes that could kill someone only to have that person develop a malady more expensive to treat such as Alzheimer’s some years later.


Worse, the continual rise in premiums that Obamacare doesn’t slow becomes exacerbated because of all the extras compliant policies force on ratepayers. That becomes compounded when competition dries up because rising health care costs and compliance requirements make markets unsustainable: simply, insurers can’t make money and they leave the market. Worst all, the only reasons many parts of America have competition or even a single company writing policies is because of the subsidies.

In the wake of unsuccessful efforts to fix Obamacare, Pres. Donald Trump has said to hasten to reform process he might kick the prop out from under the program, bringing taxpayer relief by defunding subsidies that would pay $8 billion in 2018. With insurers then having to pass along costs to the 400 percent-plus segment, fewer still will buy compliant policies and pay the fine, making that business less profitable and causing more to head to the exits.

Into this maelstrom Cassidy, with two other senators, wants to step. He backs a proposal that would cut taxes on medical devices and individual and employer mandates, although not taxes in individuals. This would result in an aggregate loss of government revenue dedicated to program funding, but in response program administration would devolve to the states that could work more efficiently. The problem is this would retain the current wealth redistribution mechanisms, which then a state could neuter at great waste; rather than pay for bureaucracy to collect and redirect money back or to a smaller degree of redistribution, why not simply don’t have it collect the money at all?

In the final analysis, if the only thing that can happen in the current environment is the Trump Administration acting to make more visible the redistributive aspects of Obamacare, then it must pursue that. Defunding would ratchet up the pressure on Congress to pass reforms that actually focus foremost on health care policy that puts health care delivery first, unlike Obamacare that seeks to redistribute resources and enrich special interests through driving business to and subsidizing insurers and health care providers.

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Jeffrey Sadow

Jeffrey Sadow is an associate professor of political science at Louisiana State University in Shreveport.   He writes a daily conservative blog called Between The Lines

jeffsadow.blogspot.com/
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