One of the biggest problems with health insurance is that we allow Republicans to treat it as if it is a consumer product.
It is not.
Republicans love to talk about leaving health insurance to market forces. Their ideological blindness and callousness leads them to believe that what is good for a capitalist market is always right for the individuals it purports to serve. The reality is that we have made the capital markets our religion, as opposed to treating it as a tool that can make life better for us all.
A company does not sell a product that is not profitable. The fiduciary responsibility of a business in a capitalist market is to its shareholders, not the customer. The client is nothing more than a means to transfer wealth to the shareholder and the executives running the business.
A company cannot make a profit on an unaffordable product. Prices must rise or costs of manufacturing the product must go down, or the product will cease to exist. That’s what is happening to health insurance under Obamacare. Some insurance companies raised their prices, while some just abandoned the health insurance 'product.' Because proper regulations were finally in place, they could not make the product less expensive. In other words, Obamacare did not allow health insurance companies to sell their customers a crappy insurance policy.
Republicans argue that it is a lack of choice that allows these businesses to charge exorbitant premiums. They claim it is overregulation that causes health insurance companies to have to provide services people don't necessarily want. They say that disallowing interstate health insurance purchase reduces competition and competitive pricing.
There is some truth in those statements—but that’s only because as long as health insurance is seen as a product, that abridgment of market forces is detrimental to the company's bottom line, and also to insurance pricing for Americans.
Insurance as a product is corrupt on many levels. The sole purpose of insurance is to collect money from the masses, and use said money to pay the bill for those who get sick. Since we are never sure who will get sick, it is a way to mitigate the high cost of getting sick. It’s bad enough that we allow a middleman to profit for paying a bill with our money. It is worse when the intermediary can risk-assess those people who they select, leaving those with pre-existing conditions with bad or unaffordable options. While Obamacare mitigated this and the new Republican plan preserves said mitigation, the new GOP plan allows insurance companies to sock it to older Americans, the ones likely to have the most pre-existing conditions.
For any insurance scheme to be viable, everyone must be in the insurance pool. The only way to do so is to force everyone—sick, healthy, young, and old—to purchase insurance. The current GOP plan gets rid of the mandate and instead applies a hefty 30 percent penalty for anyone with a two-month lapse in coverage. This penalty could cost more than a mandate, given the cost of insurance for someone who may be having financial difficulties.
All things considered, the GOP repeal and replacement of Obamacare would be much worse than the correctable problems in the ACA. Mother Jones' Kevin Drum says it best in his article titled "Republicans Unveil Their Health Care Plan. It's a Bloodbath.”
Republicans have finally released their shiny new health care plan. It's pretty much the same as the discussion draft that leaked a couple of weeks ago, and includes the following basic features:
- Subsidies (in the form of advanceable tax credits) are age-based, starting at $2,000 for young people and going up to $4,000 for older folks.
- The subsidies begin to phase out above incomes of $75,000 ($150,000 for households). This will affect about 10 percent of the population and probably reduces the cost of the bill by about 5 percent at most (since most people at that income level already have insurance through their employer).
- Obamacare's Medicaid expansion is frozen in 2020 and then gradually phased out.
- The bill allocates about $10 billion per year for high-risk pools run by states. This is far too little to work effectively.
- The tax meant to pay for everything was removed.
- Insurers are required to cover everyone who applies, even if they have pre-existing conditions. However, if you have a coverage gap longer than two months, insurers can impose a premium surcharge of 30 percent for one year. This "continuous coverage" provision is designed to motivate people to buy
insurance, since the bill repeals the individual mandate. However, this is very weak motivation and won't persuade very many young, healthy people to get covered.
- The funding formula for Medicaid is changed to a "per-capita allotment," which is a fancy way of saying it gets cut.
- All the Obamacare taxes on the rich are repealed.
In other words, the GOP is making insurance even more of a product as it repeals the taxes on the wealthy people that currently support the institution.
Here is the reality: We do not decide when we get sick. When we get sick, we cannot just shop around for the hospital and doctor that will provide the best price to treat a disease we do not yet know we have. Sickness does not know our socioeconomic condition, so having a ‘choice’ to purchase a plan we can afford means we get wealth-based health care.
Health insurance is not a product. Selling it that way is immoral, un-American, and downright evil.