The Democrats’ New Health Plan

 

Nancy Pelosi is running from Medicare for All. Despite all the hoopla by presidential candidates to jump on Bernie Sanders’ bandwagon, the Speaker of the House realizes that’s a trap that will hurt their party and the country.

Instead, she is proposing new legislation to “make ObamaCare work better.” This is actually in line with polling that says most of the country would prefer improving ObamaCare over Medicare for All. But is this new legislation she is proposing getting it right?

John C. Goodman, healthcare economist writing in Forbes, analyzes her plan and finds it has three elements:

  • Expanding health insurance subsidies to everyone.
  • Creating a national reinsurance pool to subsidize insurance companies
  • Reversing Trump administration regulations that permit limited-benefit insurance.

 

This makes as much sense as Medicare providing government-paid health insurance to seniors only because they are over 65, regardless of income. This new proposal would use taxpayer dollars to subsidize the rich who don’t need subsidies. It would also prop up expensive premiums to help insurance companies who also don’t need any help. In addition, it forces healthy families to buy insurance that doesn’t meet their needs for a price that is artificially high – just like current ObamaCare.

But Goodman says the worst feature of the plan is that it doesn’t solve ObamaCare’s most important problem: people with chronic health conditions are unable to see the best doctors and enter the best hospitals.

Both parties are trying to earn the public’s trust when it comes to healthcare. The Democrats have been more successful in convincing voters they will protect their healthcare – even though they created the current failing system entirely on their own. But they have demagogued the issue, with the help of the mainstream media, and most people falsely believe Republicans will take away important protections for their healthcare.

The result is premiums have doubled, deductibles have doubled and tripled, and access to care is increasingly restricted to an ever-narrower network of providers.

Goodman explains that all this has happened because ObamaCare has perverse incentives. Insurance companies are incentivized to attract only the young and healthy and avoid the sick. They hold down costs by only using providers who will accept the lowest fees. The best doctors and hospitals refuse these low fees. This has created insurance plans that are little better – and in some cases worse – than Medicaid with a high-deductible (which is even worse than Medicaid!)

This new Democratic plan doesn’t solve any problems and creates some new ones – more taxpayer funding of those who don’t need subsidies and removing Trump regulations that have lowered the cost of health insurance for millions of Americans.

A better model for improvement would mimic the Medicare Advantage plans that forces private insurers to compete for enrollees who pay subsidized premiums. These popular and growing plans with seniors could be applied to all age groups. But Democrats won’t use this model for improvement – because it was originally introduced by Republicans under President George W. Bush.

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