GOP lawmakers acknowledge they’ll eventually have to contend with shaky insurance markets and what to do about the elimination of remaining cost-sharing subsidy payments due this year. If a stand-alone bipartisan bill cannot be passed, money to fund the key insurance subsidy program could be resurrected as part of a year-end spending agreement.

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The White House says that substantial changes must be made to a bipartisan health-care deal for President Trump to support it.

The changes would push the bill to the right, raising serious doubt about whether Democrats would agree to the deal.

A White House official said Wednesday night that the deal should include “relief” from ObamaCare’s individual mandate, which requires that people have health insurance. The mandate is a central component of ObamaCare of which Democrats are protective and Republicans critical.

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Sens. Lamar Alexander and Patty Murray say they have reached an agreement on a bipartisan Obamacare deal to fund a key insurance subsidy program and provide states flexibility to skirt some requirements of the health care law.

There is no assurance that the agreement will get to the Senate floor, however. Republicans on Tuesday were lukewarm about the prospect of resuming debate over whether to try to prop up Obamacare after multiple failed GOP attempts to repeal the law.

The deal would include funding through 2019 for Obamacare’s cost-sharing program, which President Donald Trump cut last week. It would allow states to use existing Obamacare waivers to approve insurance plans with “comparable affordability” to Obamacare plans, Alexander said. But it would notably not allow states to duck the law’s minimum requirements for what a health insurance plan must cover.

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Revised waiver language in the Alexander-Murray bill requires states to “provide coverage and cost sharing protections against excessive out-of-pocket spending that are of comparable affordability, including for low-income people, people with serious health needs, and other vulnerable populations.”

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Seeing, hearing, reading, and feeling the new grassroots ferment among progressive Americans for a single-payer health care system, my gut reaction is: I get it. As newly documented in Elizabeth Rosenthal’s book, An American Sickness,1 and the Commonwealth Fund’s report, Mirror, Mirror 2017,2 our health care system provides shockingly poor value and outcomes, and rests on a foundation of greed. It deserves fundamental change.

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The actress Julia Louis-Dreyfus announced on Twitter that she has been diagnosed with breast cancer. We all wish her a speedy and complete recovery. Still, this would not normally be a topic for The Apothecary, except that in making her announcement, she used her diagnosis as a plug for “universal health care,” with the implication that universal health care would improve survival rates. Actual data from countries around the world, with and without so-called universal health care, do not support that contention.

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The #3 reason Medicare-for-All as conceived by Senator Sanders is a bad idea is because of the inevitable rationing it will produce. In other well-known single-payer systems, this rationing takes several forms, including restrictions on the availability of treatments or, more commonly, rationing by waiting.

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The #2 reason this plan is a bad idea is the enormous amount of waste it would create due to moral hazard. Moral hazard is the technical term used by health economists, but it refers to something every reader intuitively understand even if the term itself is unfamiliar.  If you give something to someone for free, they will use more of it and they also will be less likely shop vigorously for a lower price. In short, such consumers will typically use more and pay more (i.e., be willing to accept a higher price) for “free” services.

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With one exception, every tax known to man shrinks the economy to some extent resulting in a loss of welfare for consumers and producers [1]. That is, “whatever you tax, you get less of,” whether that be labor, consumption of various products, capital or anything else policymakers have figured out how to tax. The exact amount the economy shrinks (which in turn determines the size of the associated welfare losses to consumers and producers) depends upon exactly what is taxed.

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Obamacare has not done much to slow the growth of health care costs. Government actuaries project that health spending will grow 5.8% a year over the next decade — substantially faster than growth in the economy. Could Republican proposals to sell health insurance across state lines bend the cost curve and make premiums health plans more affordable ?

The idea seems simple enough. Right now, if you are buying your own health insurance, that coverage must be sold by an insurer regulated in your state. Instead of a national market, health insurance is sold in 51 state markets (including D.C.) with differing regulations.
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