One of the underappreciated obstacles to Republicans’ reaching a deal on health care is simple confusion. Much of that confusion concerns how health legislation should treat people with pre-existing conditions.
Obamacare forbids insurers from overt discrimination against people with pre-existing conditions. That provision of Obamacare polls very well, in isolation, and it is an especially important issue to the many Americans, of all political stripes, who suffer from chronic conditions. But the provision has also been thought to necessitate one of Obamacare’s least popular provisions: the fines on people who do not buy insurance. When the law guarantees that people can get insurance at the same rate when they are healthy as when they are sick, it gives them a reason to wait until they get sick to buy insurance. But if healthy people avoid insurance, its price goes up — and then additional healthy people start avoiding insurance. When people talk about a “death spiral” in insurance markets, that’s what they mean.
Last year House Republicans released an agenda called “A Better Way” that included the outline of a health-care plan. That plan got rid of the fines, and took two steps to protect people with pre-existing conditions. It modified Obamacare’s regulation, saying that sick people had to be offered insurance at the same rate as healthy people provided that they had maintained their insurance coverage. And it established high-risk pools to cover people who could not obtain affordable insurance because of their conditions.
The first idea, a continuous-coverage protection, has its critics: liberals who think it would be inadequate to protect people with chronic conditions, libertarians who think it would be too regulatory. (See here and here for rebuttals of each line of criticism.) The appeal of the step is that it offers protection for sick people without creating an incentive for healthy people to forgo insurance. Indeed, it gives them an incentive to buy insurance: If they stay covered while healthy, they can be secure in the knowledge that they will have coverage if they turn sick.
It seems pretty clear at this point that a number of moderate House Republicans agreed to the Better Way plan without paying close attention to the details. They endorsed it in the belief that it protected people with pre-existing conditions, but did not realize that it did so in a different way than Obamacare.
Now the most conservative House Republicans want to let states apply for a waiver from some of Obamacare’s most important regulations, including its regulations on the treatment of people with pre-existing conditions. (Yuval Levin argues for including waivers in health legislation here, NR’s editors here.) That way, those states can bring premiums lower and increase coverage levels. Moderate Republicans are balking, and a key reason they are balking is either (a) they think that waiving these regulations would leave people with pre-existing conditions unprotected or (b) they had previously campaigned on leaving those regulations in place.
Adding to the confusion is that people are using the term “community rating” in different ways. In this debate, “community rating” refers to charging sick and healthy people the same premiums for the same policies. A state that used a waiver to replace Obamacare’s regulations with a continuous-coverage protection would still be applying community rating to a very large share of the population. But moderates hear “waiver from community rating” and think it means the end of protections for people with pre-existing conditions.
This Politico story illustrates how confused the debate has become. (As far as I can tell from it, Vice President Mike Pence was arguing for a deal that included the ability to apply for waivers, and different audiences interpreted what he was saying differently because they have an all-or-nothing view of community rating.) One reason House Republicans should slow down the process of writing a bill is to make sure that their members have an understanding of these issues that is accurate and shared. It may also be possible to write the language of any provision allowing waivers in a way that allays the moderates’ concerns.
If I’m right about this — if confusion really is one of the main reasons Republicans aren’t united behind legislation — it’s a hopeful story. Real disagreements can’t always be resolved, but confusion can be dispelled.
— Ramesh Ponnuru is a senior editor of National Review.