Republicans are in a predictable spot as they head to the midterm election: The party failed to repeal ObamaCare, and the press is waving around double-digit premium increases for 2019. Democrats are pinning the blame on Republicans, though the basic problem is still the structure of the Affordable Care Act.
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Congressional Republicans were elected to repeal Obamacare. They may run this year as the politicians who saved it. Since late last year, GOP leaders have been planning to pump tens of billions of dollars’ worth of new federal spending into the veins of insurance companies that are hemorrhaging red ink on the Obamacare exchanges.
The transfusion is expected to be a concoction of two bills. The first, championed by Sens. Lamar Alexander (R., Tenn.) and Patty Murray (D., Wash.), would appropriate cost-sharing-reduction payments to insurers. The second, sponsored by Sens. Susan Collins (R., Maine) and Bill Nelson (D., Fla.), would give insurers an additional $10 billion (and perhaps more) in federal cash.
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Conservative policy experts and strategists continue to quietly meet and craft a legislative replacement for Obamacare, and with good reason.
People are hurting under the current broken system that denies individuals control over their own health decisions while hugely driving up their costs. Premiums have been rising by ungodly amounts (an average of 37 percent in 2018), while nearly one-third of all counties feature just a single insurer offering coverage in an Obamacare exchange.
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Congress has no choice but to revisit the issue of health reform, and leaders have the greatest opportunity by tackling Medicaid. In 2016 the federal government spent $42 billion on ObamaCare’s exchanges. It spent $358 billion on Medicaid. States and localities pitched in another $208 billion, for a total national Medicaid expenditure of $566 billion in 2016. The growth in spending on health-care entitlements like Medicaid and Medicare threatens to overwhelm the Treasury, starving the federal government of the funds it needs to pay for everything else, including education, welfare and national defense.
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In a letter to President Trump, Leader McConnell, and Speaker Ryan, a dozen health policy leaders recommend that health reform continue to be a top priority in 2018. Insurance premiums continue to soar, and millions of people have little or no choice of health insurers. The group says individuals need to be empowered with greater flexibility and choice and that states are better equipped than Washington to oversee their health insurance markets. This requires legislative action from Congress to redirected resources and provide them with greater regulatory flexibility.
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Senate Republicans killed their own health-care bill on Monday evening. This self-inflicted fiasco is one of the great political failures in recent U.S. history, and the damage will echo for years. This wasn’t the inevitable result of some tide of progressive history, but choices made by individuals to put their narrow political and ideological preferences ahead of practical legislative progress. The “ObamaCare Republicans” come from both the conservative and moderate wings, but all of these Senators campaigned for nearly a decade on repealing and replacing ObamaCare. Now they finally have a President willing to sign literally any bill that lands on his desk, but in the clutch they choked. The ObamaCare Republicans ran on fiscal discipline but they rejected the best chance for entitlement reform in a generation.
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For decades American conservatives have sought to restore meaning to the 10th Amendment, which recognizes the states’ right to manage their affairs free from Washington’s interference. Passing the Republican Senate’s health-care bill would represent historic progress toward that goal.
Governors and state legislatures ask Washington every year for the right to receive their Medicaid funds in the form of a block grant, which would give them autonomy to manage the spending as they see fit. The Senate bill, for the first time, would allow that.
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The new Senate bill 1) Reduces the number of people eligible for subsidies, reduces the values of the premium subsidies, and lowers the cap on total subsidy expenditure; 2) Eliminates the individual and employer mandates; 3) Restricts coverage for abortion; 3) Ends the cost-sharing reductions — but not before paying insurers back for the money they’ve already laid out; 4) Gives states a great deal more flexibility in the waiver program; 5) Gets rid of a lot of Obamacare taxes; 6) Provides market stabilization funds; 7) Winds down the Medicaid expansion funding, but not as fast as the House bill; and 8) Converts Medicaid to a per-capita allotment rather than an open-ended entitlement.
Next year’s enormous premium increases are merely the latest expression of Obamacare’s underlying problems, and the dysfunction is undermining the health security of Americans who lack employer coverage. A wave of major insurers have quit the exchanges, and those that are left have raised deductibles and copays and restricted choices of doctors and hospitals. The only way to break the Obamacare status quo is if the public returns a Republican Congress to Washington. If Republicans can hold the Senate amid a Clinton victory, they’d be in a better position to negotiate solutions along the lines of the House GOP “Better Way” blueprint that would start to repair the individual market and create incentives for more choice and competition.
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President Obama took a health-care victory lap last week in Miami, celebrating “all the progress that we’ve made in controlling costs” and portraying the law’s critics as “false and politically motivated.” Does that apply to the actuaries at the Health and Human Services Department too? On Monday they reported that ObamaCare premiums will soar 25% on average next year, and this is “progress” all right, in the wrong direction.
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