Republican Health Care Anguish

The news from the Congressional Republican retreat was a lot of anguish about healthcare. Republicans have only themselves to blame for this. The real reasons they dislike Obama care are 1) it costs too much, 2) it involves too much bureaucracy, and 3) it doesn't make enough use of market forces in holding down costs. But for the past four years they have been going to town hall meetings where people complain about the cost of their insurance plans and the high deductibles, and they have been saying, "we Republicans have solutions for those problems."

But solutions to those problems are very hard, and those solutions mostly involve spending a lot more money.

The Times has a good example of the sort of thing Republicans keep saying that some worry will get them in trouble with voters:

“No one who has coverage because of Obamacare today will lose that coverage,” Representative Cathy McMorris Rodgers of Washington, the chairwoman of the House Republican Conference, said on Jan. 10.

A spokeswoman for Ms. McMorris Rodgers later tried to clarify what she had said. The congresswoman “didn’t deliver her remarks exactly as prepared,” the spokeswoman said. In the prepared remarks, Ms. McMorris Rodgers included an important qualification: “No one who has coverage because of Obamacare today will lose that coverage the day it’s repealed” — in the transition to a new market-oriented health care system.

Rodgers isn't the only one; Trump has also said things that seem to promise nobody will lose coverage, and so has John Cornyn, part of the Republican Senate leadership.

The bottom line is that in America we spend about $10,000 per household on healthcare, so without subsidies the cost of the average plan will be on the order of $850 a month. Many people find that outrageous, but that's just what health care costs. Those costs could be brought down but only by measures that many people would hate – death panels, rationing, hard limits on what doctors and hospitals will be paid for procedures, etc.

The generic Republican solution is "market-oriented health care." The basic point of this is that if people had to pay for their own care, they would try harder to spend less: shop around for the cheapest clinic, insist on generic medications, get second opinions before having surgery, etc. But experience shows that people are very bad at this, and furthermore this assumes that they have money to pay for these things in the first place. There are Republican schemes to help with this, but they are uniformly less generous than the Obamacare subsidies and they all require that average people pay more out of pocket. They also require putting lots of effort into getting the details of complex legislation right, and who in the White House is going to help with that?

I won't say that squaring this circle is impossible; after all most people get insurance from either the government (Medicare, Medicaid) or their employers, so the individual market is a minor part of the picture. But it will be very hard to keep the various promises Republicans have made in every direction and save any money at all. Smart Republicans know this, and they are worried.