Maggie Hassan’s “Bipartisan Health Care Solutions” Are Neither Bipartisan Nor Solutions

New Hampshire’s drive-by Senator Maggie Hassan (whose margin of victory was less than the number allowed to vote without ID) is out with an op-ed on how to “solve” healthcare:

Hassan’s op-ed comes on the heels of the Senate GOP’s failure to pass “skinny repeal” of Obamacare and the news that health insurers in New Hampshire have requested rate hikes of, in some cases, more than 40 percent for 2018.  Hassan’s “solutions,” however, are neither truly bipartisan nor really solutions.  Rather, they would move us further toward single-payer –that is, government-controlled and government-rationed– healthcare.

So here are Hassan’s solutions:

To start, we must stabilize insurance markets and protect the marketplace from the Trump administration’s actions to sabotage it, actions that are increasing the cost of health insurance premiums.

One of these destabilizing actions is the administration’s ongoing threats to withhold payments — to fund what are known as cost sharing reductions — that help lower out-of-pocket expenses such as deductibles and co-pays for individuals with health insurance plans in the marketplace. This creates uncertainty, which in turn drives up costs. That’s why I’m supporting a proposal from Sen. Jeanne Shaheen, which would help lower premiums by ensuring that these payments get made.

This is so misleading it is hard to know where to begin.

For starters, Hassan makes it sound like the problem is that we have a free market for health insurance and that the free market isn’t working – “stabilize insurance markets.”   Actually, we have a highly regulated market.  It’s called Obamacare  And there reason that insurance premiums and deductibles are skyrocketing, but insurers are nonetheless losing money, is that Obamacare is fatally flawed.

Obamacare requires insurers to cover people with preexisting conditions at essentially the same price they charge healthy people.  That’s like requiring automobile insurers to insure people after they get into an accident and cover the accident and charge them no more than people who insure before getting into an accident are charged.  Needless to say, the preexisting coverage mandate drives up the cost of insurance massively, which in turn causes healthy people to drop insurance, which is why insurance companies are suffering massive losses.  The pool of people the insurers are covering has too high a proportion of unhealthy to healthy people, so insurers are paying out more than they take in.

Compounding this problem is the Obamacare mandate to cover “essential health benefits.”  These so-called “essential health benefits” are much more “essential” to constituencies that vote Democrat than to the general population.  For example, maternity coverage is hardly “essential” to women and couples in their sixties and seventies.  Needless to say, adding “essential benefits” increases the cost of insurance, which in turn leads people who do not consider the added benefits all that “essential” to drop insurance, which in turn means a higher proportion of the pool of insured are using the benefits, which in turn means more expenses for the insurers.

This is why insurance companies are requesting massive premium increases.  In other words, what is “destabilizing” insurance markets is Obamacare.

Hassan ignores all this and claims the problem is that President Trump is threatening to withhold “cost sharing reduction” payments.  Obamacare attempted to socialize -that is, hide- the anticipated increased cost of insurance in various ways.  One of these was “cost sharing reduction” payments.

Insurance companies are required by Obamacare to offer plans that offer lower premiums and deductibles for persons making less than 250 percent of the poverty level.  In return, they are supposed to receive money from the government as an offset, “cost sharing reduction” payments.  In other words, Obamacare masks the real cost of health insurance for those making less than 250 percent of the poverty level, by socializing -using taxes to pay- part of the cost.

Congress never appropriated the money for the “cost sharing reduction payments,” but the Obama administration paid them anyways.  The House GOP sued and in 2015 a federal judge ruled in the GOP’s favor, but allowed the payments to continue pending an appeal.

Hence, President Trump has the discretion not to make “cost sharing reduction” payments, and he has threatened to do just that in order to force Congress to repeal and replace Obamacare.  In response, insurers have requested rate increases to cover the anticipated expense of offering lower premiums and deductibles to persons making less than 250 percent of the poverty level.

Hassan’s “solution” is to force Trump to make the “cost sharing reduction” payments.  In other words, her solution is to continue hiding the true cost of Obamacare by forcing taxpayers to pay part of the cost.  As I noted in a previous post, “[o]nce you accept the premise that part of the individual market should be socialized, you have taken a gigantic step toward European-style ‘single-payer.’  Over time, the tendency will be to socialize more and more of the cost of health insurance and claim that the cost of health insurance is being kept under control.  Of course, costs aren’t being kept under control.  They are being hidden using ‘stabilization.’  That is, the costs are being transferred to third-parties.

The second solution proposed by Hassan is:

the creation of reinsurance programs, which help reduce insurance premiums by lowering the risk to insurance companies associated with high-cost patients. At the state level, the New Hampshire Department of Insurance is also pursuing a waiver under the Affordable Care Act to establish a reinsurance program.

To call what Hassan is proposing “reinsurance” is a total misnomer.  What she actually is proposing is to socialize part of the cost of Obamacare, which like the “cost sharing reduction” payments moves us toward European-style single-payer.

True reinsurance does not require government intervention.  An insurance company insures part of the policies it has written with one or more different insurance companies.  The insurance company that wrote the insurance is protecting itself against claims being higher than anticipated.  The insurance companies reinsuring the policies are essentially betting that claims will not be higher than anticipated.

What Hassan is talking about, however, is forcing insurance companies to contribute money to a government “reinsurance fund” from which the government will make payments to Obamacare insurers that lose money.  In other words, it is a tax on insurance companies, which the insurance companies will pass on to their customers.  The true cost of Obamacare is socialized -that is, hidden- and [o]ver time, the tendency will be to socialize more and more of the cost of health insurance and claim that the cost of health insurance is being kept under control.

Hassan’s final “solution” is:

we need to address the Affordable Care Act’s income cliff that currently blocks many middle-class individuals and families from receiving financial help to purchase insurance through the marketplace. This will help bring down the cost of premiums for middle class Granite Staters and allow more people to access affordable coverage.

In plain English, Hassan wants to increase the income eligibility level for Obamacare subsidies.  This “solution” like Hassan’s other “solutions” is simply a step toward single-payer.  The cost of the premiums is not reduced it is simply transferred to taxpayers.

Countries with single-payer health insurance have massively higher taxes than we do (and government-regulation of healthcare – for example, the recent heartbreaking case of Charlie Gard).  Naturally, Hassan leaves that out of her op-ed because she does not have the intellectual honesty to admit that her “solutions” do nothing to reduce the cost of healthcare, but simply hide the cost by shifting it to third-parties, and as such represent moves toward single-payer.

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