The Other Shoe

Three prominent House Republicans double down on the Senate proposal for amending the PPACA that I mentioned yesterday. Here’s the kernel:

Here’s how it would work:

First, make coverage more affordable. Any state that uses our off-ramp would be able to opt out of ObamaCare’s insurance mandates. These coverage requirements are driving up costs, so eliminating them would empower individuals and families to choose from a wider range of plans that fit their personal needs and budgets. Our proposal will also allow participating states to opt out of ObamaCare’s burdensome individual and employer mandates, allowing Americans to purchase the coverage they want.

We would also force insurers to compete for your business, rather than force Americans to buy a government-approved health plan under the threat of IRS fines. Let people buy insurance across state lines. Stop frivolous lawsuits by enacting medical-liability reform. Let small businesses band together so they get a fair deal from insurance companies. Our committees and nonpartisan analysts alike estimate that these proposals will cut costs and raise quality across the board.

At the same time, we would set up other safeguards for patients. We would allow parents to keep children on their plan until age 26. We would prohibit insurers from imposing lifetime limits on benefits. We would protect people with existing conditions. And we would guarantee renewability for people already enrolled in a plan.

Second, help people buy coverage. Right now, those who get insurance through their employer get a lot of help from the tax code, while some people who buy insurance on their own, including potentially the millions of Americans the IRS put at risk, get no help at all. So we would offer those in the affected states a tax credit to buy insurance.

The credit would be “advanceable”—that is, you would get it when you needed it; you wouldn’t have to wait for tax season. It also would be “refundable”—that is, you would get the full amount no matter the size of your tax bill. And would adjust the size of the credit for age; the elderly, who face higher coverage costs, would get more support.

That confirms what I said yesterday—they’re ending White House regulation of what’s acceptable or not acceptable in healthcare insurance. And it relies on something I think is fictive: that there is a market in healthcare. There is no functioning market when the cost of entry is as high as it is in healthcare. And healthcare consumers are not rational optimizers. They don’t distinguish well between economizing on necessary healthcare and economizing on unnecessary healthcare and by and large those decisions are made for them by their physicians anyway.