Greg Sargent: GOP claims 3-legged stool won't collapse if you take away 2 of them.
There's been a lot of amusing stories over the past few days about GOP Rep. Cathy McMorris Rodgers (she of the "Betty in Spokane" debacle last year), who recently learned the hard way that open Facebook/Twitter posts aren't necessarily the best places to get propaganda supporting your position.
The short version is that she asked people to chime in with their "Obamacare Horror Stories" only to find that the response included a flood of "Obamacare is Awesome!!" stories.
Anyway, today she responded to the flood of positive tales by basically saying that those are mostly about the parts of the ACA which Republicans like, and therefore "don't count" for some reason or another:
"The stories are largely around pre-existing conditions and those that are getting health insurance up to age 26," she said, adding that there is "broad, bipartisan support for those provisions."
Of course, as Greg Sargent of the Washington Post notes:
In other words, the coverage expansion that Obamacare has produced (and that people who responded to her are thankful for) is mainly due to the law’s protections for people with pre-existing conditions and for those up to 26 years old — and because those individual provisions have bipartisan support, they don’t really count as Obamacare! (The subsidies and Medicaid expansion played a large role in expanding coverage, but never mind that for now.)
OK, so if she hates the ACA so much, what's her (and her colleagues') proposal to replace it?
An Affordable Care Act alternative unveiled earlier this month by three House Republican committee chairmen, intended to be put in place if the Supreme Court guts the law in the case of King v. Burwell, would allow people to stay on their parents’ plans until age 26, as ObamaCare does.
The alternative would also guarantee renewability of plans, making sure that people cannot be dropped because of medical conditions.
The law prevents insurers from discriminating against people with pre-existing medical conditions, whether they already have insurance or not. This provision is paired with ObamaCare's mandate to buy insurance, intended to prevent people from waiting until they are sick to buy insurance, knowing they can’t be denied.
Here's the thing: The Affordable Care Act is primarily based on a "3-legged stool" approach (as outlined by the now-infamous Jonathan Gruber back in 2010):
At the health law’s core is a “three-legged stool” approach to reforming these markets: new rules that prevent insurers from denying coverage or raising premiums based on preexisting conditions, requirements that everyone buy insurance, and subsidies to make that insurance affordable.
...The truth is that all three legs of the stool are necessary to assure affordable coverage. The first “leg” is regulations that require insurance companies to offer insurance to any applicant with premiums based on age (and tobacco use) and not on underlying health status. Insurance companies are also prohibited from excluding coverage due to preexisting illnesses.
This is a highly popular reform, but it doesn’t work in a vacuum. If insurance companies must charge the same price to people whether they’re sick or healthy many healthy people will view this as a “bad deal” and not buy insurance. This results in higher prices that chase even more people out of the market. The result is a “death spiral” that leads only the sick to purchase insurance at very high prices. Several states tried such community rating reforms—offering health insurance policies within a given territory at the same price to all persons without medical underwriting—in their nongroup markets over the past two decades, and sharp rises in insurance prices ensued along with rapidly shrinking market size.
This fact motivated Massachusetts in 2006 to add a second “leg” to the stool: a requirement that all residents purchase insurance. In this way the state could ensure a broad distribution of health risks in the market and fair “communityrated” pricing to all.
The problem with this solution in a vacuum, however, is that many families cannot afford health insurance at those community-rated prices. Massachusetts therefore added a third “leg” in the form of subsidies that make health insurance affordable for those below three times the poverty line (as well as some targeted exemptions from the mandate for those who were above the subsidized level but could not afford coverage). This reform has shown very encouraging results, with the number of uninsured in the state falling by 60 percent and nongroup premiums falling by 40 percent.
Gruber may have suffered from diarrhea of the mouth and had delusions of thinking he knew what was going on in the minds of others, but his description of the core of the ACA above was dead-on target.
This is why, as Sargent notes today:
But the King lawsuit threatens to upend that little arrangement. If subsidies are killed in three dozen states, that could cause untold numbers of healthier people to drop insurance. Yet the protections for people with preexisting conditions would remain, and they would be more likely to keep their insurance. Result: Premiums could soar, and the exchanges could ultimately collapse. In other words, if King succeeds, keeping the stuff that McMorris Rodgers and other Republicans say they like could drive prices way up.
If McMorris Rodgers and other Republicans actually want to keep those parts of Obamacare after a ruling striking down subsidies, then presumably they’d offer an alternative that does this. Indeed, the contingency plan floated by House Republicans does in fact promise to keep protections for preexisting conditions, while also vaguely vowing to maintain coverage for those who stand to lose subsidies, even as it would do away with the law’s “mandates.”
McMorris Rodgers and the entire Republican Party claim that they want to keep the first leg (guaranteed issue/etc) because that one is very popular. However, the King case (if they win it) would yank the 3rd leg away across 2/3 of the country...and in doing so, would cause the 2nd leg to collapse as a result.
This would leave the entire private healthcare insurance industry precariously balanced on the single remaining leg...and anyone who has ever sat on a 3-legged stool knows what happens when you pull 2 of those legs away.
Fortunately, #Obamacare covers broken collarbones...at least for now.