Last post I talked about ObamaCare’s Last Stand, an eleventh hour attempt to replace ObamaCare with a bill called Graham- Cassidy. The bill must be passed by the Senate before the end of the month if it is to use the reconciliation rules that only require 51 votes.

Just how good is this last minute bill pieced together by Senators Lindsey Graham (SC), Bill Cassidy (LA) Dean Heller (NV) and Ron Johnson (WI)?

John C. Goodman, the father of Health Savings Accounts and perhaps the premier healthcare economist of our nation, says it is very good and he gives us ten reasons to believe that:

Affordability

There are currently about 30 million Americans without health insurance, mostly because the value of insurance products being offered isn’t worth the money. Millions have elected to pay the tax associated with non-compliance rather than purchase an expensive and largely worthless insurance product. Graham-Cassidy will allow states to offer more attractive insurance packages at lower cost.

The use of risk pools and reinsurance will also help control costs for high-risk patients. Goodman says, “If a state establishes a dedicated source of funding (outside of its block grant) for this purpose, it should be able to reduce premiums in the non-group market by as much as 50%.”

Universal

At least one plan could be offered with a premium that is no more than the subsidy the state provides. Since these plans would require no out-of-pocket payment by the enrollee, people could be automatically enrolled through the Food Stamp program, by H & R Block, the DMV, or other ways. Universal coverage could be a reality.

Tailored

The block grants to the states would allow them to tailor insurance products for the specific needs of the people. Currently, low and moderate income families are being forced to buy coverage inappropriate for their needs or their finances. Instead, they could choose policies that meet their needs and even allow them to establish a Health Savings Account.

Equitable

This bill would allow states to level the playing field for those purchasing insurance in the individual market. Currently they do not enjoy the tax exclusion of those getting their insurance through their employer. Under this reform, the employer and individual mandates go away and states can equalize the subsidy offered in the group and individual market.

Portable

Because states will have the power to equalize the government subsidy available at work and in the marketplace for low and moderate income families, they will also be able to allow portable insurance for these same people. Therefore, employees could take their insurance with them when they change jobs, just like a 401-K account.

Private

It is a well-known fact that healthcare outcomes with private insurance are much better than those with Medicaid. This reform will allow many people currently on Medicaid to purchase private insurance with the same government dollars.

Fair

Gaming the system is a big problem with ObamaCare. Many people drop their insurance when they are healthy and sign up again when they are sick. Of those who enrolled in January, approximately 25% have dropped out of the system by September and then roughly half of those re-enroll the following year. Because insurance companies must cover people for a 90 day grace period, these people abuse the system. It’s like being able to purchase homeowner’s insurance after your house is on fire. This greatly increases the cost of insurance for everyone.

Under Graham-Cassidy, states will be able to require individuals to pay the full actuarial cost of any unfair gaming activity.

Personalized Care

At $50 per month for an adult and $10 for a child, the cost of direct pay (concierge) medicine has come down to a level that should make it accessible to almost everyone. This reform allows these fees to be paid from a Health Savings Account or by a third-party insurer.

Specialized Care

Centers of excellence will be able to specialize in specific diseases – such as cancer care, heart disease and diabetes. They will be able to ask health questions and screen applicants to help get the right patient to the right plan.

A Real Health Insurance Marketplace

ObamaCare’s risk adjustment is focused on plans, not patients, and there is no realistic way for a plan to know what compensation it will receive for enrolling a patient with a costly medical condition. This uncertainty forces insurers to raise prices. With the flexibility in this bill, states will be able to set up a risk-adjustment mechanism that will protect patients, not health plans, and centers of excellence will be rewarded for providing efficient, high-quality care to patients with the most serious medical problems.

That’s plenty of reasons to support Graham-Cassidy as a huge improvement over ObamaCare.

(Senate Majority Leader Mitch McConnell has pulled the bill for now because there are insufficient votes for passage. It is my hope the bill will be brought up again in the future.)

 

This week Republicans get their last chance to replace ObamaCare. If they fail now the country can count on more ObamaCare – at higher prices – or single-payer healthcare – which is even worse.

Senate Republicans Bill Cassidy and Lindsey Graham have introduced a bill referred to as Graham- Cassidy, which tries one last time to get 51 votes in the Senate to undue the damage of ObamaCare. They have until September 30^th to pass it under the Senate rules of reconciliation or wait until 2018. (I explained this new bill in an earlier post called Another ObamaCare Replacment Plan.)

The main advantage to this bill over previous bills is block grants. The states will be given federal dollars, which they can then use to provide healthcare to their residents in new and creative ways they choose. Liberal states like California may choose single-payer healthcare and eliminate all choice of other systems. Conservative states like Indiana may choose a free-market system that incentivizes health savings accounts and lower-cost consumer-driven insurance products tailored to the specific needs of individuals. Others may retain ObamaCare.

At this writing the success or failure of the bill is riding on the votes of four Republican senators. All of the Democrats oppose the bill because they oppose any changes to ObamaCare – except if it is replaced by a single-payer system. The four crucial senators are Lisa Murkowski (AK), Susan Collins (ME), John McCain (AZ) and Rand Paul (KY).

Senator Paul has openly refused to vote for the bill, even though he did vote for the so-called “skinny repeal” bill that preceded this one. His current opposition defies understanding since a “no” vote may ensure the continuation of ObamaCare – which he opposes. Senator Collins usually finds a way to vote against Republican bills she calls “disappointing.” Her opposition will probably come from the bill’s defunding of Planned Parenthood, although the same money will be sent to community health centers to treat women not requesting abortions. The other two are riding the fence as I write these words.

Kimberley Strassel, columnist for The Wall Street Journal, believes Senator McCain will ultimately support the bill since the governor of Arizona is a supporter and the bill’s sponsor, Senator Graham, is his best friend in the Senate. That leaves the fate of the bill up to Alaska Senator Lisa Murkowski.

Strassel says the decision ought to be an easy one for Murkowski. No state has suffered higher premiums than Alaska, which has seen increases over 200% and now leads the nation. Only one insurer is left to choose on the exchanges. Doctors are overwhelmed with the new Medicaid enrollees.

Furthermore, Strassel points out that Alaska benefits greatly from federal largess that supports its small population. Alaska gets more dollars per capita than any other state. It receives billions in annual federal grants and billions more in defense spending. Federal dollars support an estimated one-third of all the jobs and household income in the state. A “no” vote on healthcare could dry up this support.

Lanhee J. Chen, writing in The Wall Street Journal, discusses the objections of opponents. He says their misguided complaints are these:

• Insurers may discriminate against sick patients. The bill still requires states to provide coverage for those with pre-existing conditions, despite false accusations from liberal celebrities like Jimmy Kimmel. These protections of ObamaCare will remain.
• Caps on Medicaid spending. The status quo of Medicaid spending is unsustainable. That’s the hard truth liberals won’t face. ObamaCare greatly expanded the initial intent of Medicaid to cover only poor women and children and the disabled, expanding coverage to able-bodied adults. This must be curtailed or those who truly need the program won’t get the care they need.
• Lower block grant funding in some states. The current Medicaid funding disproportionately benefits the rich states at the expense of the poor states. This is especially true in those states that expanded Medicaid under ObamaCare. This bill is intended to create funding parity, regardless of Medicaid expansion. Naturally some states will complain but those states have been milking the system and that must end.

 

There is plenty of room for complaining about this legislation for the purists that want everything (like Rand Paul). But reality forces us to consider the alternatives. If this bill goes down in flames like the last one, the country will be forced to endure more ObamaCare at even higher prices than last year. Many individuals will have no insurance choices on the ObamaCare exchanges as insurers bail out of the market.

The alternative is the single-payer system that Democrats want. If that’s what you want you can move to Canada. But if that was the solution then why are so many Canadians coming here for their healthcare?

 

Single-payer healthcare is alive and well – at least in the minds of Progressives. This is no surprise since they’ve been pushing this agenda for the last century.

The latest state to take up this proposal is California. Last month, Assembly Speaker Anthony Rendon announced he was forming a special committee “to develop plans for achieving universal health care in California.”

Sally Pipes, writing in Forbes, says Rendon has been under pressure from Progressives all summer ever since he shelved SB 562, a bill passed by the Senate on June 1 that would have placed all Californians into a new, state-run single-payer healthcare system. No one, however, has figured out how to pay for the system.

It is true that single-payer is more popular than ever according to recent polls. A recent Quinnipiac University poll showed 51% of Americans support it. A Pew Research Center poll found that even 12% of Republicans favor single-payer, an increase from just 7% three years ago. According to an IBD/TIPP poll, 57% of those closely following the healthcare debate favor single-payer. Even doctors surveyed by Merritt Hawkins favored it by 56%.

All of which just goes to show how ill-informed most people, even doctors, are about single-payer healthcare.

Vermont Senator Bernie Sanders is the leading advocate of single-payer healthcare in the Senate. Sanders campaigned for the presidency last year promising everyone “Medicare for All.” Now he has introduced new legislation in the Senate he calls The Medicare For All Act. What he won’t discuss is the failure of single-payer in his own state of Vermont.

Even though Vermont Governor Peter Shumlin promised the people a single-payer state healthcare system, he admitted defeat when the numbers didn’t add up. The plan would have required a 160% tax increase to pay for the $2.9 Billion increase in annual expenditures. It would have required an 11.5 % increase in payroll taxes plus premiums of up to 9.5% of income. Despite these increases hospitals and doctors would have been paid less.

The state of Colorado has also tried this idea. Coloradans got to vote on this issue in the November election but when they saw the price tag included a $25 billion payroll tax, 80% voted against it.

There is plenty of real world experience to measure the effectiveness and cost of such systems in other countries. The United Kingdom, Canada, and Sweden all have single-payer systems and all have been forced to pay private practitioners out of the system for treatment to alleviate the horrendous waiting times within the system.

The British NHS system recently abandoned its goal of providing elective procedures such as hip replacement and hernia repair within eighteen months. They have also resorted to denying surgeries deemed by the government as “of limited value.”

In Canada, the Fraser Institute reports median wait times to see a specialist are now 20 weeks (that’s five months!) – more than double the wait in 1993. Wait times for a CT scan or ultrasound average a month; for an MRI it is three months.

So the lessons of experience are clear. Single-payer healthcare produces:

• Increased waiting times for diagnostic testing and treatment
• Delayed or denied surgical procedures
• Massive tax increases

 

How could anyone favor single-payer healthcare if they knew all that?

 

(Note: For more on single-payer healthcare, read earlier posts Reasons for Single-Payer Defeat in Vermont and Single-Payer Versus Market-Driven Healthcare: Which is Better?)