The Quarterback of Obamacare Doesn’t Like the GOP Senators’ Alternative

Real Healthcare Reform by from The Weekly Standard, February 3, 2014

Ezekiel Emanuel—Rahm’s older brother and the man who, as far back as 2009, current Nebraska Senate candidate Ben Sasse warned was “quarterbacking the details” of Obamacare—has authored a New York Times op-ed in which he criticizes the proposed alternative released last week by Senators Coburn, Burr, and Hatch.  Emanuel, a rather feisty fellow (see his Fox News exchange with Jim Capretta—during which he admitted that, under Obamacare, the “individual market is going away”), has written some, well, provocative things about what he calls the “allocation of scarce medical interventions.”  For example, he’d prioritize the lives of the young over the old, but would nevertheless prioritize the lives of adolescents over infants.  That’s because adolescents “have received substantial education and parental care, investments that will be wasted without a complete life.  Infants by contrast, have not yet received these investments.”  Yes, that’s who designed Obamacare, with all of its central planning and government control over Americans’ health-care decisions and their lives. (Feel better now?)

Emanuel’s musings about the relative value of distinct human lives might make one think of Obamacare’s unelected and largely unaccountable Independent Payment Advisory Board (IPAB), one of the myriad notorious features of Obamacare that Americans would be freed from under the Coburn-Burr-Hatch alternative.  Others include (to list just a few) Obamacare’s job-killing employer mandate (which President Obama, at his whim, has lawlessly refused to execute as written); its war on doctors (Obamacare bans, for example, the building or expanding of doctor-owned hospitals); its taxpayer-funded bailout of big insurance companies; and, of course, its historically unprecedented individual mandate, which says that—for the first time in United States history—private American citizens must buy a product or service of the federal government’s choosing.  In comparing and contrasting the senators’ proposed alternative with Obamacare for readers of the New York Times, Emanuel curiously forgets to mention any of these parts of Obamacare.

He does, however, find space to mention his concern that, in the absence of Obamacare’s 2,700 pages, insurers might lose people’s paperwork.  He asks, “What if the paperwork you filled out is ‘lost’?”  Seriously?  That’s why we need a government-orchestrated overhaul of American medicine?

Another thing that Emanuel fails to mention is the senators’ embrace of “high risk” pools—a key part of their solution to the problem of expensive preexisting conditions.  Emanuel writes that, under the senators’ alternative, if people with preexisting conditions are uninsured but want to buy insurance, “health insurance companies could charge more or refuse to cover them.”  In truth, however, the senators call for generous federal funding for state-run high-risk pools, through which anyone could purchase partially subsidized insurance—and no one could be turned away because of a preexisting condition.

That certainly beats Obamacare’s method of dealing with preexisting conditions, which is to mandate that insurers cover all comers at the same cost (subject only to age and geography), thereby causing health costs to spike for everyone else while also incentivizing people to wait under they’re already sick or injured to get “insurance”—which in turn causes costs to spike still more.  In other words, the Coburn-Burr-Hatch way of dealing with preexisting conditions would ensure that everyone has access to coverage while saving everyday Americans a lot of money.

Speaking of saving money, Emanuel writes, “Under the Republican plan, a 30-year-old man living in New York City earning $35,000 a year would pay the full price of insurance, roughly $4,383 for a typical plan.  Under Obamacare, he would pay $3,325.”

This is misleading on several levels.  First of all, Emanuel cherry picks New York, where taxpayer-funded Obamacare subsidies for young people are higher than in any other state (because liberal New York, amazingly, bans insurers from taking age into account when pricing plans, which causes artificially high prices for younger people and triggers bigger taxpayer-funded Obamacare subsidies for them as a result).

Secondly, young people would not have had to pay $4,383 pre-Obamacare—even in New York.  According to a report from the Government Accountability Office, as of last year (the last non-Obamacare year until full repeal is achieved in 2017), a 30-year-old man could have gotten a plan in New York for as little as $1,986—a lot less than $3,325 (the price under Obamacare after he receives his taxpayer-funded Obamacare subsidy).

Thirdly, according to the 2017 Project’s Study on Obamacare’s Subsidies and Penalties, a 31-year-old man making $35,000 in Cuyahoga County, Ohio would have to pay $2,704 for the 2nd-lowest-cost Obamacare “silver” plan (the same level of plan that Emanuel is apparently talking about, since a “silver” plan is what $3,325 will buy you in New York.)  Moreover, this Ohioan wouldn’t get any subsidy whatsoever.  The GAO says that, pre-Obamacare, he could have gotten a cheap plan in that state (assuming he’s a non-smoker) for $492 and could have gotten the median-priced individual-market plan for $1,485—that’s $1,219 less than this Obamacare “silver” plan.

According to the 2017 Project study, other 30-year-old men—or women—making $35,000 who wouldn’t get an Obamacare subsidy are those living in Philadelphia Co., Pa.; Orange Co., Fla.; Hillsborough Co., Fla.; Fulton Co., Ga.; Miami-Dade Co., Fla.; Wake Co., N.C.; Dallas Co., Texas; Tarrant Co., Texas; Clark Co., Nev.; Palm Beach Co., Fla.; St. Louis Co., Mo.; Travis Co., Texas; Fairfax Co., Va.; Bexar Co., Texas; Oakland Co., Mich.; Wayne Co., Mich.; Harris Co., Texas; Salt Lake Co., Utah; Broward Co., Fla.; DuPage Co., Ill.; and Cook Co., Ill.—just to list counties that are among the 50 largest in the U.S.

In each of the states in which those counties are located, the GAO says a 30-year-old man making $35,000 could have gotten insurance in the individual market for less than $700 pre-Obamacare.  Moreover, the GAO says he could have gotten the median-priced plan in the individual market for between $1,072 (in Mich.) and $1,704 (in Fla.).  The Obamacare plan in question, however, would cost between $2,250 and $3,300—roughly twice the price of the median-priced plan pre-Obamacare, and about four times the price of the cheapest plan pre-Obamacare.  Under the Coburn-Burr-Hatch proposal, Americans wouldn’t have to pay these inflated Obamacare prices.

Emanuel also tries to turn Obamacare’s price hikes for the young (who are expected to subsidize those who are older) into a virtue, writing that, under the senators’ alternative, “older people” would “be penalized.”  He writes, “Under the Affordable Care Act, insurance companies are allowed to charge 64-year-olds only three times what they charge 21-year-olds.  But the Republican plan allows insurance companies to charge 64-year-olds five times more. So a 64-year-old individual could pay as much as $21,900 for a plan that costs a 21-year-old only $4,380.”

Well, in New York (the apparent source of Emanuel’s $4,380 figure), if a 21-year-old is charged $4,380, a 64-year-old would be charged…$4,380.  Nor would the Republican senators’ proposal prevent New York from keeping this unreasonable arrangement in place at the expense of the young.  That’s pretty much what federalism is all about:  states are free to pass ridiculous laws, and their residents are free to move somewhere warmer and more right-leaning.

In reality, if a 64-year-old is charged $6,000, actuarial tables suggest that a 21-year-old should be charged only about $1,000 (a ratio of about 6-to-1)—and that’s what the 21-year-old would pay in a truly free market.  But Obamacare bans this—from coast to coast.  Eschewing actuarial science, it decrees that this ratio cannot exceed 3-to-1.  So, if a 64-year-old is charged $6,000, a 21-year-old must be charged at least $2,000.  Obamacare mandates this.  (Having second thoughts yet, young Obama voters?)

In short, Obamacare makes health insurance far more expensive than it was before the Democrats rammed Obama’s centerpiece legislation through Congress without a single Republican vote.  Liberals claim that this—along with an extraordinary consolidation of power and money at the expense of liberty—is the price we must each pay to provide protection for all.  But well-conceived conservative alternatives, like Coburn-Burr-Hatch and a soon-to-be released alternative from the 2017 Project, show otherwise.

Copyright 2014 Weekly Standard LLC. Reprinted with permission.