GOP Has No Plan for the Uninsured

A blog about business and economics.
April 2 2013 9:54 AM

The Conservative Alternative to ObamaCare: Tax Cuts for Rich People


Courtesy of the National Republican Senate Committee

Yesterday on Twitter I linked to the above fundraising graphic from the National Republican Senate Committee characterizing it as the GOP plan to help the uninsured. Daniel Foster, a National Review writer, suggested I might be interested in a more substantive take from his magazine in the form of a print cover story from Ramesh Ponnuru and Yuval Levin. The article is dedicated to rallying the forces of Obamacare repeal, arguing that it's not a lost cause and is in fact essential to the betterment of the country. It contains several thousand words, many decent arguments, and precisely nothing to suggest what conservatives would do to help the uninsured gain access to affordable medical care.

After repealing the Affordable Care act, Levin and Ponnuru want to do two things. The first is to destroy the health insurance that insured people have. The second is hand-waving. Step one:

The core of a replacement would be a change in the tax treatment of health insurance. The tax break for coverage would be flattened and capped so that people would not get a bigger break the more comprehensive their insurance. The break would also be extended to people who do not have access to employer coverage. People would be allowed to purchase health insurance across state lines. Medicaid and Medicare would be converted into subsidies—essentially add-ons to the tax break or credit for coverage—for people to buy private coverage and pay for out-of-pocket health expenses.

The problem with this approach is simple and well-known. The core of the insurance concept is to create a risk pool. By offering a tax subsidy to employers that encourages them to compensate employees in part through health insurance, the tax code encourages employment sites to serve as risk pools. Removing that subsidy destroys the risk pools. The result is a health insurance system that only works for people who don't have substantial health care needs.

Their answer is hand-waving:

Once a robust market for individually purchased insurance has emerged, the problem of people who are locked out of that market because of preexisting conditions should diminish: People will have both the incentive and the ability to buy cheap, renewable catastrophic policies before getting sick. In the interim, though, conservatives should commit to funding well-designed high-risk pools to cover the healthcare expenses of sick people who have been failed by the current system. These subsidies will be much cheaper and more likely to work than Obamacare’s solution to the problem, which is a federally imposed redesign of the entire health-care system.

If high-risk pools could solve these problems so simply, you might ask why it's not already been done. It turns out to be really expensive: $200 billion over 10 years to cover about 4 million people. But the real core of the idea here is "cheap, renewable catastrophic policies." These policies are not cheap through some feat of magic; they're cheap because they're stingy. Which is fine. If your priority is to minimize federal expenditures, then obviously giving everyone very low-quality health care is better than giving high-quality health care. But it's like saying that your affordable housing policy is to hand out tents so people can sleep in the park. In exchange for accepting a much lower standard of insurance, working-class Americans will get nothing from the Ponnuru/Levin plan. High-income Americans, on the other hand, will receive large tax cuts from Obamacare repeal that will more than cover any higher out-of-pocket expenses.


Medical Examiner

The Most Terrifying Thing About Ebola 

The disease threatens humanity by preying on humanity.

I Bought the Huge iPhone. I’m Already Thinking of Returning It.

Scotland Is Just the Beginning. Expect More Political Earthquakes in Europe.

Students Aren’t Going to College Football Games as Much Anymore

And schools are getting worried.

Two Damn Good, Very Different Movies About Soldiers Returning From War

The XX Factor

Lifetime Didn’t Think the Steubenville Rape Case Was Dramatic Enough

So they added a little self-immolation.


Blacks Don’t Have a Corporal Punishment Problem

Americans do. But when blacks exhibit the same behaviors as others, it becomes part of a greater black pathology. 

Why a Sketch of Chelsea Manning Is Stirring Up Controversy

How Worried Should Poland, the Baltic States, and Georgia Be About a Russian Invasion?

Trending News Channel
Sept. 19 2014 1:11 PM Watch Flashes of Lightning Created in a Lab  
  News & Politics
Sept. 20 2014 11:13 AM -30-
Business Insider
Sept. 20 2014 6:30 AM The Man Making Bill Gates Richer
Sept. 20 2014 7:27 AM How Do Plants Grow Aboard the International Space Station?
  Double X
The XX Factor
Sept. 19 2014 4:58 PM Steubenville Gets the Lifetime Treatment (And a Cheerleader Erupts Into Flames)
  Slate Plus
Slate Picks
Sept. 19 2014 12:00 PM What Happened at Slate This Week? The Slatest editor tells us to read well-informed skepticism, media criticism, and more.
Brow Beat
Sept. 20 2014 3:21 PM “The More You Know (About Black People)” Uses Very Funny PSAs to Condemn Black Stereotypes
Future Tense
Sept. 19 2014 6:31 PM The One Big Problem With the Enormous New iPhone
  Health & Science
Bad Astronomy
Sept. 20 2014 7:00 AM The Shaggy Sun
Sports Nut
Sept. 18 2014 11:42 AM Grandmaster Clash One of the most amazing feats in chess history just happened, and no one noticed.