Republicans in Congress have been attacking Obamacare and vowing to repeal it for nearly seven years, and President Trump made “repeal and replace Obamacare” a central promise of his winning campaign. Now the President and his party are in charge, but they are scrambling to craft a replacement. Why are they having such trouble?
The main problem is that Republicans are a diverse bunch who opposed Obamacare for a variety of reasons. Those most focused on shrinking the size and reach of the federal government thought Washington was already too involved in health care and should pull back, not expand its role or raise taxes to pay for new health spending. Those preoccupied with personal freedom balked at being required to buy health insurance. Others thought the widespread use of insurance to fund health care was already driving health spending too high and objected to further expanding health insurance. Still, others thought broadening health coverage was a desirable goal, but that the subsidies and regulations that Obamacare used to accomplish this goal were poorly designed and transferred too much power from the states to Washington. All of these Republicans could agree on trashing Obamacare, but they did not have a common intellectual basis for designing a replacement and they still don’t.
The 2016 Republican Platform says: “Our goal is to ensure that all Americans have improved access to affordable, high-quality healthcare…” It avoids saying that the federal government has a responsibility to provide that access, which many conservative Republicans do not accept.
If you changed the goal to “all Americans should have affordable health insurance,” you would lose even more conservative Republicans—the ones who see health insurance as an undesirable way to pay for most health expenditures. They believe generous health insurance keeps people from being cost-conscious consumers looking for the most cost-effective provider of knee replacement surgery or cardiac care. If these procedures are covered by insurance, providers don’t have to compete to offer attractive prices (or even make clear to the patient what their prices are). If most of their health care costs are paid by insurance, people tend to use more care, and health care spending goes up. Hence, many Republican health care proposals feature tax subsidies that help people fund health savings accounts (HSAs), so they can shop for health care with their own money. They typically encourage health insurance coverage only for relatively rare “catastrophic” events, although they allow people to use their HSAs to buy more generous health insurance if they want it.
HENRY KOTULA 