For the past decade, the Affordable Care Act, nicknamed Obamacare, has been the bogeyman of the Republican Party in the United States. Signed into law in 2010, the bill required that all adults in households earning at least 150% of the federal poverty level buy health insurance (or pay a financial penalty) and that no one could be denied coverage based on pre-existing health conditions. It provides subsidies to lower the cost of health insurance for households earning between 100% and 400% of the federal poverty level, to help them buy low-cost insurance and expanded Medicaid to cover adults earning below 138% of the federal poverty level. As Investopedia points out, Medicaid is “a health care program that assists low-income families or individuals in paying for doctor visits, hospital stays, long-term medical, custodial care costs and more.”
Although this program helped poor Americans, it more than doubled the cost of health insurance for the average citizen. In 2013, the final year before every provision of the law went into effect, the average cost was $2,784 per person. That number ballooned to $5,712 in 2017, hence Republican opposition.
Now that more Democrats are supporting universal healthcare in the form of Medicare for All, the attacks continue. The program would be a massive expansion of the already existing Medicare program, which provides hospital insurance, medical insurance and prescription drug coverage primarily to those aged sixty-five and older.
For supporting these measures, Republicans call their political adversaries socialists, comparing them to admirers of countries with authoritarian governments like the Soviet Union, China and Venezuela.
The healthcare debate is also one area in which the Republicans are losing badly. In 2017, Republicans controlled the House of Representatives, Senate and presidency and yet they could not repeal Obamacare and replace it with their proposed American Healthcare Act. Not only did zero Democrats in Congress support their bill, but it failed to get fifty-one votes in the Senate. Three Republicans voted against it: Susan Collins of Maine, Lisa Murkowski of Alaska and John McCain of Arizona. Part of the reason the bill was unpopular is because it would have allowed insurance companies to price Americans with pre-existing health conditions out of being able to buy health insurance, as Politifact points out. The Congressional Budget Office stated the plan would have decreased the federal deficit by $119 billion over the course of a decade, but 23 million Americans would have lost their health insurance by 2026.
Meanwhile, healthcare was the key issue Republicans had fought against for years and yet, they did not have a competent system of their own to replace it with. This hurt the party in the 2018 Midterm elections, when 30% of voters said healthcare was the most important issue. The result? Republicans had their biggest midterm loss in the House of Representatives since Watergate.
The party had no national healthcare plan to run on. It’s not even something President Donald Trump seems interested in talking about anymore. He has promised to worry about it at a later date, if re-elected. Sure, Republicans repealed the financial penalty associated with the Obamacare individual mandate—a penalty some Americans had to pay if they refused to buy health insurance—but Democrats have moved past Obamacare and want to offer everyone coverage.
What is clear is that, prior to Obamacare, nearly 45,000 Americans per year died because they did not have access to proper healthcare and the United States is the only highly developed country that does not provide its citizens with some form of basic universal healthcare, according to the World Health Organization. Conservatives should take note of this and not only tolerate universal healthcare, but embrace it and make it a part of their platforms.
Politicians are elected to enact the will of the people they represent, and the American people overwhelmingly want universal healthcare: 71% are in favor, according to a February 2019 poll from The Hill. That said, if healthcare is once again the top issue in the 2020 presidential and congressional elections, Republicans run the risk of losing control of the presidency and both chambers of Congress: the Senate and House of Representatives.
From a pragmatic standpoint, the politicians need to think about what the American people actually want. For the most part, people want a job, money in a savings account—and not to be bankrupted by medical bills. This is a promise Republicans could actually make and keep.
They can do this while opposing Medicare for All. They can criticise the program for being too expensive and question the efficiency of an entirely government-run healthcare program, such as those advocated by progressives who want to abolish private insurance—as does Bernie Sanders. They can argue that the quality of care for Medicare recipients is worse than that provided by the private health insurance market and healthcare systems in other countries, thus dissuading people from supporting it. After all, there are a number of different universal models, many of which have different price tags.
Realistically, the Republicans’ best bet would be an idea that has existed in their party for decades: Universal Catastrophic Coverage.
Catastrophic health insurance plans are not a new concept. They are low-cost, high-deductible (the deductible is the dollar amount one must pay out of one’s own annual healthcare expenses before insurance kicks in and covers the rest) programs, which are currently only available to those under the age of thirty or who qualify via a hardship exemption. The holders pay out-of-pocket expenses for routine healthcare, like a checkup at the doctor’s office, contraceptives or a flu shot. The system largely works exactly the way conservatives say they view health insurance: like car insurance. If a tire pops, the average car insurance plan does not cover the replacement. However, if the car gets rear-ended, the insurance will take care of the damages.
Under such a system, the risks of being denied life-saving care or going bankrupt in the United States of America, the wealthiest country in the world, would be greatly diminished. Already, Americans have access to emergency rooms, but no financial protection against major medical expenses, including extended hospital stays.
Although there are no major Republican candidates proposing this exact legislation at the moment, the idea has roots in their party, specifically with former presidents Richard Nixon and Ronald Reagan and economist Milton Friedman.
Nixon’s plan in 1973 not only included an individual mandate for Americans to buy health insurance, but had a maximum liability for what each household would be responsible to pay under the government-run catastrophic program. The maximum liabilities ranged from 3 to 15% of household income. In other words, a family in the bottom income bracket, who only brought in $15,000 a year, would have a maximum liability of $250; if they made $100,000—the top bracket at the time—their maximum liability would be $15,000. Had the president’s second term not been marred by the Watergate scandal, this could have been the healthcare system of America today.
As Governor of California, Reagan had a similar idea. He proposed a $3-a-month paycheck deduction for every worker in the state, to fund a program which would kick in, “when the basic plan ran out,” according to Associated Press.
Plus, Friedman wrote an in-depth piece for the Hoover Institute in 2001, advocating a UCC system, and expressing his frustration at the inefficiency of the country’s health insurance system. Friedman wanted the nation to switch away from employment-based health insurance in exchange for higher wages, while advocating cuts to medical spending.
For fiscal conservatives, it is important to get out in front in the healthcare debate because of the high cost of such programs. They must face the reality that the kind of pure free market healthcare system some crave is not going to happen. Are there measures that can be taken to cut waste and make the system run more efficiently? Absolutely, and they should push for as many such as possible, so long as they do not impact the quality of care. Such measures could include price transparency, the purchase of prescription drugs from other first world countries, and the elimination of unnecessary care and bloated administrative staffs.
However, they should also realize that, under a catastrophic healthcare system, the federal government would actually save money compared to what it is currently spending on Obamacare each year.
The Niskanen Center estimates that a UCC plan that features an out-of-pocket maximum of 14.5% of eligible income for the top bracket would bring the federal government $72 billion of net savings annually. That figure may not be as significant as conservatives would like, but the progressive alternative, Medicare for All, would cause federal healthcare spending to balloon to $40 trillion per decade, according to Bernie Sanders himself. This would add trillions of dollars to the federal deficit. Republicans will need a serious alternative if they do not want this to happen.
Such a system could be modeled along the lines of the one in Singapore, which uses a program called MediSave—similar to health savings accounts in America—to complement a state-funded catastrophic insurance program. Established in 2003 in the United States, health savings accounts allow people to put aside tax-exempt income to cover their deductibles.
In Singapore, the system works quite well, despite the fact that the country only spends 4.9% of its GDP on healthcare—while the United States spends 17.1%, according to the World Health Organization.
Support for such a measure could be bipartisan and move some moderates away from Medicare for All, if it offered a viable alternative. After all, the two major political figures who have brought up universal catastrophic coverage this year are both moderate left-wingers: US Rep. John Delaney (D-MD) and former Starbucks CEO Howard Schultz, neither of whom garnered much support as 2020 presidential candidates.
Such a system would protect people with pre-existing conditions, allow people to keep their private health insurance plans and provide the public, especially low-income Americans, with the assurance that getting sick with something treatable isn’t a death sentence. That’s a win for those who believe healthcare is a human right while fiscal conservatives would also attain a sizeable victory for once.