Out of Pocket, Out of Luck?

by Ramesh Ponnuru

Ed Kilgore agrees with me that Republican Senate candidate Monica Wehby’s proposed fixes to Obamacare “don’t make a whole lot of substantive sense.” Yet they’re still better, in his estimation, than what he thinks I want.

What Ponnuru wants Republicans to do is to bite the bullet and embrace an alternative that fits together more coherently but that might be no more popular than Obamacare—i.e., one that puts people with pre-existing condition in their own little risk pool ghetto where people who have lost life’s lottery would be consigned to bad insurance at high prices, and expects everyone else to pay a lot more out-of-pocket for health expenses. (In all alternative GOP plans, needless to say, beneficiaries of the Medicaid expansion would be totally out of luck, along with many existing recipients who would be exposed to “reforms” designed to force or allow states radically cut back eligibility). While there is an intellectual elegance to such “alternatives,” life for poor and unhealthy Americans would be far better under Obamacare, or even Wehbycare and other schemes to “fix” the law.

To get a sense of how bad he thinks a conservative alternative would be, recall that I had argued—and Kilgore does not contest—that Wehby’s plan would raise the risks of an insurance death spiral. He’s saying that a conservative alternative would be worse than that. The critique seems overstated.

Yes, some people with pre-existing conditions would get financing for their care through high-risk pools as a transitional measure—as is also true under Obamacare. The main thrust of the plan that many conservatives and I have outlined, though, is to keep people from being locked out of regular insurance markets based on their health status. The plan introduced by Senators Coburn, Burr, and Hatch, for example, would give people both the incentive and the means to maintain continuous coverage.

Out-of-pocket expenses would be a higher proportion of health spending under most conservative reforms, true, but premiums and taxes would decline, and the size of these out-of-pocket expenses would be restrained by competition.

The Coburn plan would let Medicaid recipients cash out a lot of their funding to buy insurance in the open market. Far from being “totally out of luck,” they could well be better off than they are now.

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