Republican senators Ted Cruz (Texas) and Mike Lee (Utah) have found a new cure for the GOP’s legislative dysfunction on Obamacare. They both have waved their pro-market pitchforks, early and often, even at the expense of Republican consensus. But their Consumer Freedom Option might unite the Senate’s fractious GOP majority behind Obamacare repeal and replacement.
“The Consumer Freedom Option simply says that if an insurance company sells in a given state a plan that is consistent with the Title I mandates,” Cruz told Texas radio host Mark Davis, “that company can also sell any other insurance plan consumers desire.
“What this will allow is, okay, fine. You want to keep your mandates? Knock yourself out with your mandates,” Cruz continued. “But, in addition to mandates, let’s let Texans buy the plans they want. Let’s let Texans buy the benefits they want, and let’s let them get lower prices, so that more families who are struggling can actually afford health insurance.”
“We’ve got to do something to reinject free-market forces into this environment,” Lee said Sunday on CBS’s Face the Nation. “If we can bring free-market forces to bear, we can bring down costs for middle Americans.”
Cruz and Lee want to free, say, Aetna to offer low-cost, low-frills coverage to those who do not need spruced-up plans. This could include the younger, healthier people who have fled Obamacare, seeing little reason to pay piles of cash that they do not have for more coverage than they need. Childless adults, no surprise, spurn surreal Obamacare plans that are required by federal law to include pediatric dental coverage for kids who do not exist. Under Cruz and Lee, premium payments from these younger, healthier policyholders — who usually need less medical care — will help offset the cost of covering frillier Obamacare plans.
“We’ve got to lower premiums, and the way you lower premiums is you give the consumers freedom to choose the health-insurance plan that they want without the government mandates,” Cruz told WBAP radio host Chris Salcedo. “You free up and create more choices, more competition, which results in lower premiums and making health insurance more affordable.”
Pro-patient reformers generally applaud this proposal.
• “After almost a decade of promising to repeal Obamacare, it’s time for Republican senators to put their money where their mouths are and get it done,” said Club for Growth president David McIntosh. “At a bare minimum, Congress should not stand in the way of allowing Americans who want to opt out of Obamacare to do so. And that’s why it’s so important that the new Senate Obamacare-repeal bill include the Lee-Cruz Consumer Freedom Option, which would allow individuals to opt out of Obamacare’s costly regulations.”
• “I support Cruz’s and Lee’s idea,” Pacific Research Institute president Sally Pipes tells me. “Giving people the freedom to choose a plan that meets their needs and that they can afford is the best solution today.” The author of The Way Out of Obamacare added: “The American people voted in November for the repeal and replacement of Obamacare. The law is in a ‘death spiral’ and needs to be replaced. Continuing with Obamacare Lite will be a disaster and will ultimately lead to a single-payer, ‘Medicare for All’ system where there will be long waits for care, and it will be rationed. It is time to do the right thing.”
• “Brilliant,” says Merrill Matthews, resident scholar at the Institute for Policy Innovation.” “To be clear, this is not the free-market approach that many of us would like, but neither the House nor the Senate has enough votes to return health insurance to a free market. What Cruz is trying to do is create a situation where the vast majority of people in the individual health-insurance market would have a wide range of affordable health-insurance options — just like they used to before Obamacare.”
• “Cruz is right that we should allow plans with non-compliant benefits,” says Goodman Institute founder John Goodman, the author of Patient Power. “In fact, we should allow plans that scale back benefits enough so that they cost no more than the tax credit. That way, people could be insured without paying any additional premium.”
But, Goodman warns, “if some plans can offer skimpier benefits, you can’t allow people to choose those plans while healthy and then switch to the more generous plan after they get sick. People have to pay the full actuarial cost of any such change.”
Under the Cruz and Lee, premium payments from these younger, healthier policyholders — who usually need less medical care — will help offset the cost of covering frillier Obamacare plans.
Cruz and Lee would have to free these plans from community rating. Simply put, if someone shifted from skinny coverage to fat coverage, the price would need to change. If you swap your Ford for a Lincoln, the sticker price will change. Cruz and Lee are too smart to promise Lincoln medicine at Ford prices.
Democrats love the idea of adding a “public option” (i.e., voluntary socialized medicine) to any health-reform measure. Cruz and Lee should call their idea “the private option.” If some Americans want medical coverage without Uncle Sam standing in examination rooms, between doctors and their patients, Cruz and Lee would offer them that opportunity.
In a sense, this concept is the medical equivalent of school choice: Democrats and the Left want to keep everyone in both collapsing government systems. If people escape rotten government schools and actually learn something on private campuses, Democrats and their socialist model look bad, and those employed in it might lose their iron rice bowls. So, liberals demand that no one leave their “Animal Farm.”
Of course, their entire argument collapses when confronted with this question: “If your system is so great, why would you worry that someone might walk away?”
If Obamacare is as spectacular as Democrats claim, consumers will turn up their noses at Ted Cruz’s and Mike Lee’s other options. Let’s make Americans free to choose the Obama/Pelosi/Schumer model or the Cruz/Lee alternatives.