If GOP health plan is about 'choice,' why doesn't it offer choices more Americans want to buy?

House Republicans like to say their health plan is all about offering Americans choices. So what does it say about those choices if 52 million Americans, offered health insurance in the market designed to Republican specifications, will choose to buy no insurance at all?

The broad strokes of the Congressional Budget Office analysis of the plan are this:

  • Over 10 years, deficits would be lower by $US337 billion. The plan provides big tax cuts (mostly to high earners) but its cuts to spending are even bigger, so the deficit would fall.
  • The spending cuts would come mostly from spending less on Medicaid for the poor and less on insurance premium subsidies for the lower-middle and middle classes.
  • Because of those spending cuts and the repeal of the individual mandate penalty for not carrying insurance, about 52 million Americans would be without health insurance in 2026 — 24 million more than under current law.
  • Insurance premiums would be higher than under current law through 2019 (because healthy people would drop insurance coverage after the individual mandate is repealed) and then lower from 2020 onward (because insurers would be allowed to sell stingier plans, and because more generous subsidies for some young, healthy people would encourage them to buy insurance again).

Democrats will point to the insurance coverage loss number — 24 million more Americans without insurance — as evidence that this bill is terrible.

Republicans will respond that if people were only buying insurance because of the individual mandate, what’s so great about that? The goal isn’t to force people to buy coverage — it’s to give them choices so they can do what they like.

The big problem with the “choice” argument is this: If their plan is all about choices, how come they couldn’t come up with choices that appeal to those 52 million Americans who won’t buy coverage under their plan?

There are a lot of people who don’t like the insurance plans offered to them. But the number of people who would say, in the abstract, “I would prefer not to carry health insurance,” is very small. They want to be offered health insurance that they find to be a good value.

In practice, people who go uninsured under the Republican plan will do so for one of two reasons.

One is that they won’t be able to afford to buy an insurance plan. In some cases, insurance under this plan will be eye-poppingly expensive: Even after a tax credit, CBO estimates a single-coverage premium of $US14,600 for a 64-year-old — even if his or her income is as low as $US26,500.

Other people will go uninsured even though they could afford to pay for insurance because they will decide the available insurance does not provide a good value.

Under the Affordable Care Act, many people complain about high deductibles and co-payments that mean their health insurance does not seem to actually pay for the healthcare they need. This proposal would lead to even more “cost-sharing” — which is to say, higher co-payments and deductibles.

That is, the CBO report says that, for tens of millions of Americans, the only choices that would be available under the GOP proposal are insurance plans they won’t have the money to pay for, or insurance plans they won’t believe are worth buying.

That is a poor outcome for a healthcare policy that is supposed to be all about “choice.”

This is an opinion column. The thoughts expressed are those of the author.

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