We Don’t Need An Individual Mandate And Massive Giveaways To Insurance Companies To Help People
The argument for passing the terrible Senate bill is that 30 million more Americans would gain “insurance coverage.” It is a strong argument, but it leaves out a lot of very big caveats (the “coverage” will be junk insurance, people are forced to buy, that it will not stop medical bankruptcy, it will still price out many in need because of the large community ratio, and the excise tax meant to pay for the bill will eventually worsen most Americans insurance coverage). Most importantly, this argument ignores that a slightly redesigned bill could cover roughly the same number of Americans for dramatically less money, without an individual mandate, or massive giveaways to the private health insurance corporations.
If we drill down into the CBO numbers on the House bill and the Senate bill, we see that most Americans would gain insurance coverage due to the expansion of Medicaid. The House expansion of Medicaid to 150% of the FPL would cover roughly 15 million more Americans. The employer mandate in the House bill combined with relatively modest small business tax credits would result in roughly 6-7 million Americans gaining coverage. These three provisions increase the number of Americans with insurance by roughly 23 million and a bill containing them would cost only about $315 billion.
The Senate bill maintains the CHIP program and as a result covers roughly 4 million Americans not covered by its expansion of Medicaid to 133% FPL. (The House bill would end the CHIP program.) Adding a maintenance or expansion of the CHIP program to the House bill would be an extremely cost effective way to expand coverage by several million.
Far and away the most expensive part of the bill is the massive giveaways to the private insurance companies combined with the Senate bill’s refusal to implement a real employer mandate. Expanding public programs like Medicaid and CHIP are substantially more cost effective ways to increase insurance coverage. Private insurance companies do a terrible job of providing cost-effective health insurance. The awful decision to give these inefficient insurance companies massive subsidies to cover Americans, who would be forced to buy their bad products, only results in a relatively small increase in insurance coverage at a huge cost. The idea that these companies, proven to be failures at controlling costs, would be given huge amounts of money without any new public competition to keep them honest is mind boggling.
One also needs to keep in mind how low the quality of insurance that will be offered on the new exchange. Much of this expanded “coverage” will not prevent financial ruin due to illness. A lot of this insurance will be junk “insurance in name only.”
The bills could easily be redesigned to increase insurance coverage by roughly 30 million Americans at a fraction of the cost if we drop the massive giveaway to the insurance companies, and the individual mandate. The bill would need to contain:
- The insurance market reforms
- The House’s employer mandate and slightly increased small business tax credits
- Medicaid expansion to 150%-200% FPL
- Maintaining or expanding CHIP program
- A permanent COBRA expansion with subsidies
This bill, depending on design, should cover close to 30 million more Americans, and for less than a net cost of $500 billion. While this would not get us true universal coverage neither would the Senate bill.
Don’t tell progressives that they must accept the Senate’s massive corporate giveaway simply because it will help some people. Those same people could be helped for a fraction of the cost to the government (with a bill done through reconciliation), and without enriching the health insurance companies trying to kill real reform.
At some point, there is so much graft and corruption in the bill you simply must stand up against it. Enriching and empowering your enemy before the next health care reform battle is not a path to real victory.