Health Insurance Info for Colorado

news & commentary on health insurance and benefits

OK, now what?

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The Republicans, to their credit, are determined to fulfill a campaign promise to repeal Obamacare and have scheduled debate and most likely hearings on the legislation, which should keep the issue front-and-center as a national campaign issue as we enter the 2012 Presidential campaign – something that has already started, for those who don’t yet know it.

“Let’s be clear” – to borrow a phrase – the POTUS will veto anything that smacks of repeal, or anything that waters down his intent to bring the private health insurance industry under the wing of the federal regulatory apparatus via wage and price controls that were legislated and are now being promulgated as regulations by HHS, CMS, and the IRS. The “battle lines” are drawn (sorry for the un-civil reference; it is a good one, though).

Democrats are doing their usual bang-up job, aided and abetted by like-minded media types, of characterizing Repubs as cruel and inhuman for wanting to, say, do away with the reforms that Obamacare brought to pre-existing conditions limitations, even though, in practical terms, the issue really isn’t an issue, only affecting 2-4 million people yearly, out of a total insured population of around 260 million under age 65. And the solution they’ve proposed through Obamacare, which essentially forces individual health plans to become small group health plans in all markets, will be substantially more expensive for all, driving even more people into the ranks of the uninsured – until the subsidies kick in, mind you, which really just redistribute tax dollars from those with more income to those with less income (and explains why the feds are setting up for a massive increase in Medicaid enrollees – I’ve seen estimates of more than 80 MILLION enrolled by 2014!). Never mind that solutions already exist, and have existed for years, but have never been enthusiastically developed to provide an efficient, truly workable safety net for those unfortunate 2-4 million people who do have pre-existing conditions and would like to remain covered. No, what was needed, claim the proponents of Obamacare, was a massive expansion of the federal entitlement bureaucracy and a new redistributive scheme. We even have the words of Donald Berwick, recess appointed as administrator of the CMS, as proof.

So, what now?

Opponents of Obamacare need to counter the overblown and, frankly, inaccurate claims by progressives that repeal of any part of the Affordable Care Act will lead to “people dying” or other incendiary comments thrown around by those who are in a lather about dismantling their latest entitlement expansion. Bottom line is that it needs dismantling.

First, Republicans need to outline, in no uncertain terms, what they are proposing and what they will support – and then let everyone know it. Otherwise, from this observers’ position, the Democrats’ win the public relations battle hands-down. It’s the old “they are going to take away your Social Security” argument, one that Dems have honed to a fine edge – and that some people accept as conventional wisdom, even if it contains not one shred of truth.

Second, while repealing Obamacare right now is essentially a symbolic act (although, given the nervousness of some Senate Democrats, I’m not so sure a repeal couldn’t land on POTUS’ desk for him to veto; that would be a gift) politics is all about symbolic acts, and the Republicans need to stick to their principles, and the promises made during the 2010 election cycle, and do everything possible to repeal it entirely, now and in the months ahead. This is a defining moment for Republicans, and they better not waver. Symbolic or not, it will prove to the voters who handed them the keys that they can be trusted.

Since outright repeal is probably not going to happen, given the veto pen over at the White House, constructive replacement is called for, and here is a good list to start.

The biggest danger, though, is one that is receiving little media coverage, which, to my suspicious eye, is by design. The Medical Loss Ratio (MLR) provisions are essentially wage and price controls which will drive out companies currently in the health insurance market, further weakening an already under-performing industry and essentially mandating their financial performance. For proof, look no further than Forbes, which gave the industry a 2.2% profit margin – lower than your grocer. What’s more alarming is that MLRs make no practical sense, as detailed here.

If Republicans want to gain traction quickly, this is one of the first places I’d target (oops -my bad) to change. Mandatory Medical Loss Ratios only make sense if you hate insurance companies and see no practical benefit to allowing them to survive – a view not endorsed by the millions of Americans (a majority, actually) who view them favorably.

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