How Republicans Should Handle The Inevitable ObamaCare Implosion
INVESTOR'S BUSINESS DAILY
Everyday Americans will now experience the unfolding and worsening train wreck called ObamaCare, now that its major provisions became operative on Jan. 1.
If Republicans are complicit in this big-government quagmire, then some form of federally run health care will become permanent. If they resist the siren song of entitlements, then in three years the GOP may be able to replace ObamaCare with free-market reforms that will vastly improve America's excellent health care system.
The twin objectives of ObamaCare, as stated in the Affordable Care Act's text, are to provide near-universal health care coverage while reducing costs. ObamaCare will manifestly fail on both counts, as costs increase for millions of Americans, and the number of uninsured rises sharply from 47 million (including illegal immigrants, who are exempt from ObamaCare's mandates).
President Obama promised that Americans would save an average of $2,500 per year, that the rolls of the uninsured would drop by 30 million (presumably leaving only 17 million uninsured) and that those who enjoy their current coverage can keep it. "Period."
Most Americans are hearing stories of skyrocketing costs and even a left-leaning outlet labeled the president's promise that you can keep your coverage — "period" — as "the lie of the year."
But ObamaCare is even worse than that.
As of Jan. 1, anyone can now demand coverage at any time under the guaranteed-issue provision. And when the insurance company makes the required offer under the community-rating provision, the monthly premiums must be virtually the same for everyone in the local area.
Only four factors such as age and tobacco use are accounted for, but otherwise everyone is forced to pay the same, regardless if they are a marathon runner who never drinks or a morbidly obese drug addict.
If you refuse to purchase this insurance, you pay a tax penalty of $95 or 1% of taxable income, which over time increases to $695 or 2.5%, respectively. Most young, healthy Americans will pay that penalty vs. $5,000 or more for an annual policy.
If you catch a cold, it's cheaper to pay a doctor out-of-pocket, not purchasing insurance unless you become terribly ill or are in a serious car accident. It's like being able to buy homeowners insurance after your house burns down. Why would you pay for the insurance before a fire, if you can now get it after you know you'll need it?
Young people by the millions will decline to pay into this system. Many doctors will decline both new Medicaid patients and Medicare patients, because ObamaCare's reimbursement rates are too low. Americans will have fewer medical options or willing providers.
Of the four traps Republicans must avoid, two are already in the ACA: expanding Medicaid, and setting up state exchanges. The others are "fixes" that will become popular talking points this year: increasing subsidy amounts and income cutoffs.
Each of these is to convert ObamaCare into a wealth-redistribution system, whereby over time perhaps half of the U.S. population will pay for the other half.
ObamaCare subsidies only flow through state-run exchange policies, and are the only trigger for employer-mandate liabilities. So businesses will gravitate to states that eschew exchanges to avoid this mandate.
Young professionals with growing families will follow those businesses for job opportunities. And newer doctors will flock to those states for growing businesses and paying patients, and also because those states are the ones refusing to expand Medicaid.
Republicans will best serve the nation by resolutely standing on principle. ObamaCare cannot be salvaged, because government-run health care cannot work better than free markets. Government safety nets work only when relatively few people are in those nets. You cannot expand it to cover everyone and make it work.
President Obama will veto any comprehensive repeal legislation. If Republicans try to "mend it, not end it," as a compromise, expanding programs, payments and coverage while reducing penalties, or removing specific, unpopular mandates, they will become part of this problem, and some version of ObamaCare will always plague our nation.
But if Republicans show how to improve health care with private enterprise and personal empowerment, then they can present the American people with a stark contrast and clear choice.
Americans trust freedom over bureaucracy. After several years of ObamaCare's increasingly bitter medicine, if Republicans offer Americans a true philosophical choice, they will give us a chance in the House and Senate, and after that the White House.
McIntosh is a former congressman and chairman of the Conservative Action Project.
Blackwell is the former Ohio treasurer and a director of the Club for Growth.
Klukowski is the senior legal analyst for Breitbart News and on faculty at Liberty University School of Law.