‘This is not my area of expertise.”
That’s the first intelligent thing Jimmy Kimmel has had to say about health-insurance reform.
Kimmel is a late-night comedian and the father of a beautiful three-month-old boy who was born with a congenital heart defect. Kimmel has set himself up as the conscience of the current debate over the last effort at reforming health insurance, and Washington now talks of the “Jimmy Kimmel test,” which demands that insurance companies be obliged to cover preexisting conditions without exception or penalty. Kimmel has on his television program twice called Senator Bill Cassidy, author of insurance legislation under current consideration in Congress, a liar for putting forward legislation that would not treat preexisting conditions the way Kimmel would prefer to see them treated.
We wish the very best to Jimmy Kimmel and his young son, Billy, but holding up cute babies is a dumb way to approach complex policy questions.
It should be noted that the changes considered in the Cassidy bill would have no effect whatsoever on Billy Kimmel, inasmuch as those changes deal with the coverage of preexisting conditions in insurance policies sold on the individual market. Even the most precocious babies are not generally shopping for their own insurance policies from the womb; most of them are, like Billy Kimmel, covered under their parents’ group policies — if they are covered at all. And that latter condition is, of course, what this is really all about.
The question of what to do about preexisting conditions isn’t about insurance companies suddenly deciding that they will not cover this or that medical issue for people who have maintained continuous insurance coverage, but rather is a question about what to do about uninsured people with medical conditions who have decided to seek insurance. The basic architecture of the Affordable Care Act mandates that insurance companies essentially ignore preexisting conditions when writing new policies, obliging them to insure against events that already have happened — essentially requiring them to bet big on the Falcons in Super Bowl LI. This turns insurance on its head: Insurance is a risk-mitigation tool that does not work well when the event already has happened. It creates a perverse incentive: If there is no cost for the coverage of preexisting conditions, then people have no incentive to buy insurance at all until they are sick and need the benefits. In order to mitigate that problem, the Affordable Care Act mandates that every American buy insurance and maintain coverage, a mandate that has not been robustly enforced. That means insurance pools composed of sicker and older populations — which is why we have skyrocketing health-insurance premiums and insurance companies pulling out of markets left and right.
The Affordable Care Act is a poorly designed piece of legislation. It is easy to point to charismatic beneficiaries and conclude that it has been worth the trouble, but everything looks like a winning proposition when you count only the benefits and ignore the costs. In reality, the ACA led to millions of Americans experiencing the anguishing disruption of insurance arrangements with which they are perfectly content. President Barack Obama and his Democratic allies in Congress promised substantial savings from the ACA, but in fact the opposite has been the case. Insurance today is less affordable than it was when the ACA was passed, and it is in some ways less accessible, too: Many Americans have fewer choices today than they did before the ACA — or, in many cases, have no choice in providers at all.
One of the problems with having the national discussion led by lightly informed celebrities such as Jimmy Kimmel is that people begin to believe their own rhetoric, in this case that Republican health-insurance reformers are motivated by sheer malice or by obscure financial considerations. (Never mind that the biggest financial players in this case, the insurance companies themselves, oppose current Republican reform efforts and largely supported the ACA.) That makes discussing the actual problems at hand, and potential solutions to them, difficult or impossible. Republicans made a critical mistake in 2008 and 2009 when they rejected the enterprise of health-insurance reform per se, repeatedly insisting only that “we have the finest health-care system in the world,” oblivious to the fact that a great many Americans were unhappy about that system or anxious, with good reason, about the security and cost of their own health-care benefits. Democrats are today making the same mistake: Obamacare is now sacred writ so far as they are concerned, and the prospect of revisiting it a profanity. But, of course, many Americans remain dissatisfied with the current state of health insurance, and Republicans are taking small, awkward steps toward addressing that.
It is not the case, as Kimmel and others insist, that the Graham-Cassidy bill would throw 30 million people off their insurance plans or that it would simply cut off federal funding for insurance subsidies in 2026. Such dishonest histrionics do not advance the cause of responsible health-insurance reform. It would permit the states to seek waivers from the federal preexisting-conditions regulation and experiment with different approaches of their own. Ironically, the effectiveness of the Democrats’ charge that modifying the preexisting-conditions rule would see Americans dying in the streets illustrates why such painful changes are unlikely to be proposed or to pass: Such measures are unpopular, and state governments are held democratically accountable to their people, often in a much more immediate and rigorous way than the federal government is. Experimenting with different approaches to preexisting conditions would in fact be desirable; there is no reason to suppose that the best solution for New Jersey is also the best solution for Oklahoma, and the only thing that is entirely clear about the preexisting-conditions approach put forward in the ACA is that it is not working.
Before the ACA, there were a great many Billy Kimmels whose parents had health insurance they could afford and that worked for them. Many of them no longer do. And there is no health-care system — not the ACA regime, not the Graham-Cassidy reforms, not a British-style government-monopoly system — that would in fact ensure that every child in Billy Kimmel’s situation would receive everything he might need and his parents might desire at a price they can afford. Medical services are a scarce good involving real costs and, barring the conscription of physicians, they will remain so. More market-oriented systems ration care through price, whereas public systems ration it through long waiting lists or by simple denial of services. Charlie Gard was a cute kid, too.
Graham-Cassidy contains useful and important measures.
Between the fully nationalized model of the United Kingdom and the perfect free-market system of the libertarian imagination lies a complicated reality in which insurance companies are heavily regulated and in which the consumption of medical services is heavily subsidized in direct and indirect ways. In the U.S. context, that means a number of parallel systems (individual insurance, employer-based plans, Medicare, Medicaid with many state-level variations, the VA system, etc.) and an ongoing federal reform effort that is complicated by the fact that insurance companies are regulated primarily at the state level. We do not have a health-care system: We have dozens and dozens of them. That is not going to be sorted out by a late-night comedian or two and sympathetic appeals about sick children.
It is not going to be sorted out entirely by Graham-Cassidy, either, though the bill contains useful and important measures. The bill does not, contra the claims of President Donald Trump, represent the repeal and replacement of Obamacare. It is a package of piecemeal reforms, some of which — repealing the employer mandate, expanding access to low-cost catastrophic plans, and block-granting Medicaid funds — are very desirable. That may not pass the “Kimmel test,” which, in its broadest form — the idea that no one should ever go without care for financial reasons — isn’t an idea at all but only a kind of slogan. But the real-world test is the more important one. Republicans should learn from the Democrats’ ACA errors, forgoing grandiosity and paying very close attention to the details. If they manage to get it right, Billy Kimmel will thank them for it one day.