The Definitive Guide to Repealing & Replacing Obamacare

“So how about it, Nash? You scared?”

“Terrified… mortified… petrified… stupefied… by you.” (–A Beautiful Mind)

Fear is now a sign that you are an intelligent, educated, open-minded and caring person. Being scared is incontestable proof that you have a beautiful heart. When it comes to your health, there is palpable terror that soon, very soon, the bad guys will take away Obamacare, which was the source of health care and life itself for many.

Obamacare is Now Officially the Status Quo

Obamacare went into effect only three years ago, but in the age of information technology, years are like decades. Obamacare  is deeply and solidly entrenched in the health care landscape. There is zero chance that anybody will be able to dig up its rhizomic growth into the actual practice of medicine, so let’s play along and see what can be done about the large shiny part, visible to the naked eye, namely health insurance.

Traditionally, health insurance coverage is segmented into public insurance, employer group insurance and individual markets. However, considering the changes introduced by Obamacare, a different classification, may be in order:

  1. People who have all or most of their health care paid for
  2. People who have some of their health care paid for
  3. And people who must pay for all their health care on their own. 

Health insurance for all classes now includes a fixed set of “essential benefits”, no limits on lifetime spending and prohibition from factoring preexisting conditions into coverage decisions has been expanded to include non-group policies. This is the post Obamacare status quo. This is what the Republican Party is currently endeavoring to repeal and replace. It is important to note that while approximately 90% of Americans are eligible for either fully or partially subsidized health insurance, there is a 10% “donut” hole of mostly middle class, mostly precariously employed people, left to fend for themselves.

Democrats are poking fun at Republicans for lacking an Obamacare replacement plan after six years of complaining and symbolically voting to repeal the law multiple times. The irony here is that the GOP has plenty of plans that could have been put in place in 2008 and even in 2012, but not today. Why? Because none of the old plans are equal, let alone better, than the new status quo. The simple fact is that on its face, and for the short term, Obamacare helps far more people than it hurts. The other simple fact is that the one overriding fiduciary responsibility of members of Congress is to get themselves reelected.

The Basic Laws of Repeal and Replace

With that in mind and considering that for some peculiar reason getting rid of Obamacare was a major campaign promise for both the GOP and the new President, I would like to humbly suggest an entirely scientific set of basic laws for repealing and replacing Obamacare.

Zeroth Law of R & R: Drain the swamp

If two systems (insurance and hospitals) are in profitable relationship with a third system (government), they are in profitable relationship with each other. This law helps define the notion of corruption.

First Law of R & R: Do no harm

No harm now and no harm in the future. No harm while you’re healthy and no harm if you get sick. Every American covered by some type of health insurance should be no worse than he or she currently is. Premiums should not be higher. Out of pocket spending should not be higher. Benefits included should not be fewer. Access to and choice of doctors and hospitals should not be reduced. And finally, government spending should not increase by too much either. If this law sounds to you like some sort of ridiculous wizardry, it isn’t. There are plenty of places to look for, and find money, other than working people’s pockets. Additionally, failure to comply with this basic law will guarantee loss of elected office for anybody remotely associated with such folly. Equivalently, perpetual election machines of the first kind (hurting people) are impossible.

Second Law of R & R: Fix what’s broken

Fix what the people say is broken, not what dead economists might have said is broken. Premiums, especially for unsubsidized people, are too high. Deductibles are way too high not just for those who have to pay full price for insurance, but increasingly so also for employer sponsored workers. Choice of doctors and hospitals is being narrowed for everybody, except the very rich and the very well connected. Those are the three things that voters need Congress to fix. Blabbering about death spirals and actuarial risk pools will get you zero (0) votes in your next election. Reducing Federal government spending on health care by a few billion dollars means nothing (0) to voters who have to cover the shortfall from their own individual pockets or go without. Equivalently, perpetual election machines of the second kind (ignoring people) are impossible.

Third Law of R & R: Watch your language

Do not lie to the American people and do not use words you don’t fully understand just because self-described experts use those words often in casual conversation. Don’t tell people that their health care will be affordable if they open another empty savings account. Don’t insult the intelligence of sick people by telling them that if they band together with other very sick people they’ll be able to buy more affordable health insurance. Do not tell States that cutting Federal support for Medicaid will finally free the States to innovate. First, the “dishonest” press will roast you alive, and second, your “base” of forgotten men and women will be forgetting all about you. Equivalently, perpetual election machines of the third kind (lying to people) are impossible.

Repeal & Replace for Dummies

Based on the four simple laws above, I would like to submit one possible sequence of broad steps to “repeal and replace” Obamacare.

  • Step 0: Get rid of the individual mandate. It is irksome to many, it accomplishes nothing, and it’s already gone anyway. This, in and of itself, satisfies the minimum requirement for stating that Obamacare has been repealed.
  • Step 1: Take a baseline of who has what in the way of health insurance, and this includes covered benefits, because reducing health insurance prices by cutting benefits violates the First and Third Laws.
  • Step 2: Exclude programs where Obamacare changed little to nothing. Ignore the small changes and per the First Law, leave expansions in place.
  • Medicare, VA and other military related – Leave those out. Fix the VA separately.
  • Medicaid – Leave it alone, except make sure the remaining Republican governors expand it in their (your) states (threats, waivers and whatever it takes to help them save face).
  • Employer insurance – Leave the 26 year old children and the removal of lifetime limits in place because neither one makes much difference to affordability (preexisting conditions were never an issue for this group).

Now we’re down to about 18 million insureds in dramatically different situations. Half are subsidized to various degrees based on their Federal Poverty Level (FPL). People with less than 400% FPL (a bit south of $50,000 per year) get some form of subsidy for the premiums, but many are struggling with outrageous deductibles. Those who make less than 250% FPL get help with their high deductibles as well. The 8-9 million who pay full price, along with 7 million of the uninsured, are in desperate need of relief from Obamacare. Add to that an increasingly large portion of employees whose employers “offer” exceedingly high deductible plans, and you have your Obamacare resentment in a nutshell.

  • Step 3: The easiest and cheapest solution to the problem would be to allow people on the individual market to purchase Medicare coverage and direct all Federal subsidies (which will need to be spread out more broadly) back into Medicare. There should be no objection from the health insurance industry since they all seem eager to leave those tiny markets anyway. But of course, nobody is going to do that, because this would appear to be “government run health care” of the “socialized medicine” variety.
  • Step 3 (alternate A): Allow all subsidized people on the Obamacare exchanges to “buy” into local Medicaid plans, which should reduce cost significantly, and use the savings to broaden the subsidies to include the hurting half, with an option to get more “coverage” if they use those new subsidies to buy into Medicaid as well. Personally, I don’t find this alternative very appealing, certainly not as appealing as the Medicare option, but again, seeing how all Medicaid is privatized now and how health insurers are making fortunes from Medicaid, there should be no serious objections. This alternative violates the Second Law when it comes to choice of doctors.
  • Step 3 (alternate B): If increasing membership in Medicare or Medicaid (or both) is too much of a political hot potato (and it is), let’s use some of those buzzwords y’all enjoy throwing around to create a market-based solution. We have around 18 million people who participate in the individual market and perhaps another 13 million who fit the profile, but choose not to participate. We are talking about at most 10% of Americans.  I am pretty sure that some “brave” health insurance companies (preferably non-profits) would be willing to bid for contracts to insure these people. You can do this by state or by region “across state lines”. Here’s the deal: people don’t need choices of health insurance plans. They need choices of doctors and hospitals.
    • One generously subsidized HMO plan with an adequate but narrower network, which is essentially a Medicaid style option, but more expensive (go figure).
    • One less generously subsidized PPO plan with a comprehensive network, which is similar to a Medicare Advantage PPO.
    • You can add in your “health savings accounts” here, but only if they are fully or partially funded by the Federal government in lieu of direct payment to insurers. This is also a good place to experiment with subscription based comprehensive care, a.k.a. direct primary care (DPC), which introduces a small element of free-market competition into the health care delivery system.
  • Step 4: Limit employer high deductible plan offerings, because what is a reasonable deductible for the CEO, is most definitely not reasonable for the assembly line worker. If you think Obamacare is a huge problem now, wait until the employer health insurance sector collapses, and it will if left to its own devices. Yes, fully funded health savings accounts (and DPC) could be used here as well.
  • Step 5: If you are serious about providing relief to the people, the government cost for replacement will be higher than the current Obamacare costs. To reduce health care insurance prices, you will need to consider the Zeroth Law of R & R and intervene in the pricing of health care products and services, such as drugs, devices, technology, regulations, the predatory environment created by consolidation of health systems, and the deprofessionalization of physicians.

Since all sides in this debate have strong ideological convictions or equally powerful financial interests, preventing them from civil collaboration, the most likely result of this R & R effort is that the people will end up getting hurt, again. But if the 2016 election wasn’t a clear enough message for you, here is another Nobel Prize worthy message attributed to John Nash (or rather the writers of A Beautiful Mind):

“If we all go for the blonde and block each other, not a single one of us is going to get her. So then we go for her friends, but they will all give us the cold shoulder because no one likes to be second choice. But what if none of us goes for the blonde? We won’t get in each other’s way and we won’t insult the other girls. It’s the only way to win. It’s the only way we all get laid.”

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18 replies »

  1. You don’t try very hard, Peter. The link is https://www.youtube.com/watch?v=EEQvsK5w-jY The “h” was not copied in https which would be noticed by most intelligent people that were really interested in checking their facts. It is an almost 15 minute segment of a multi part series. How much more video do you think they can place on the net and have people watch.

    It was the voices of Democratic operatives that should never have said what they said and who should never have implicated Hillary Clinton and Donna Brazil except if they wanted to be honest, something that doesn’t appear to be their goal.

    You are upset because your personal ideology is being shown for what it is, a lie and you don’t want to look in a mirror.

    One is not paranoid when one hears and sees the illegal or at least unconscionable behavior demonstrated in the video. O’keefe shows how they met the three points needed for criminality, but that is for the courts to decide.

  2. The link did not work. Veritas does questionable video editing that leaves the whole truth on the cutting floor. I can probably find it on all the right wing conspiracy sites you seem to hold as gospel, but so far no proof of paid operatives at these meetings anywhere else.

    I leave you to your paranoia.

  3. Robert Creamer is probably staying away from these things for awhile. Many others are doing this and we just have to wait until they are caught, but many have been already.

    This you can look up for yourself. I gave you one link to O’keefe . There are more videos of this nature and a whole host of other things on his web site. The Democratic party is very corrupt and the corruption seems to start at the top working its way down.

  4. “This documents the illegal actions of Robert Creamer”

    So you’re saying Bob Creamer is paying operatives to attend the recent town hall meetings?

    “This has been proven over and over even if not seen in the mainstream media.”

    Links to the “over and over”?

  5. There are a lot of paid Democratic operatives flooding these meetings so one has to be very suspicious. This has been proven over and over even if not seen in the mainstream media. This type of illegal or unethical action has been documented on video .

    As an example 3/3: ttps://www.youtube.com/watch?v=EEQvsK5w-jY

    This documents the illegal actions of Robert Creamer who stepped down after the video was released. Creamer is the husband of D Rep Jan Schakowsky and had previously committed $2.3 million in bank fraud. Creamer was a visitor to the White House 342 times meeting with Obama 47 Times. This particular video directly tied Hillary Clinton, Donna Brazil and the DNC into the illegal coordinated use of campaign funds.

    Peter, as usual you are attacking the wrong person in support of those that belong in jail. I don’t know what Trump will do with healthcare. I don’t even know if I will agree with his solution, but I don’t blindly provide my self respect and lose it because of personal blindness of what is going on.

  6. “Obamacare has made things more difficult to correct.”

    Tell that to the people at the Repugs town hall meetings who don’t want their ACA taken away. Repugs never wanted to “correct” they just want repeal – and if there is a “replace” it won’t make the replacement better for patients than the present ACA.

    You can always “keep your doctor”, even in non-ACA policies, but the doc may not be, “in network”. This is a growing problem which I’m sure Repugs will solve by banning networks.

    There are lies and serial liars, Trump is the latter.

  7. Peter, should Margalit have hung her hopes on what Obama had said? “If you like your doctor you can keep your doctor” …’a $2,500 savings’. etc. We now know that what he said were lies and knew it. Gruber confirmed what was going on.

    Trump is no expert on healthcare so he has provided general principles. He is a leader that will steer other people. What will come out of this is unknown. Obamacare has made things more difficult to correct. Your comments add nothing, but noise.

  8. Well, if everybody can hang their hat on what President Trump said (or what they imagine he meant to say, or what the Huffington Post implied he may have meant to say, but didn’t actually ever say) two years ago, a year ago, or anytime before he became President for the purpose of generating mass hysteria, then I can certainly hang mine on what he actually said a few weeks ago, no?

  9. “Remember, he said no cuts to anything, and health care for everybody, including specifically those who can’t pay.”

    You’re hanging your hopes and dreams on what Trump says on any given day – really?

    Happy with the collateral damage yet Margalit?

  10. Margalit, your hope that the Democratic Party will provide some support I think will fall on deaf ears. They are no longer the party of Truman, JFK and the like. They have turned into a party that would hang an image of either Truman or JFK in effigy. Maybe some individual Democrats will recognize how self defeating (for the nation) the Democratic Party’s present tactics are and respond in a more appropriate manner. We have seen the workings of the Democratic Party and leadership in the emails that have been released and this revelation is not pretty..

  11. I agree. I don’t think he knows much about health care or other policy issues for that matter, but I am not sure this is really a bad thing….
    He was very straightforward during the campaign in very simple terms – protect Medicare, Medicaid and SS and no people “dying in the streets”, lower premiums, lower deductibles and health insurance for everybody, and specifically including people who can’t pay for it.

    He also said that this is called the Republican Party not the Conservative Party, so they’ll have to live with it…. and they all pretty much opposed him.

    I suspect that this whole thing is taking longer than Ryan & Co. would have liked, precisely because it is now clear that Ryan’s intentions are not compatible with the President’s commitments.

    I hope he doesn’t cave in. It would have been nice if Democrats gave him some support now…. too much to ask from the party of the people, I guess.

  12. There is a difference though…. The entire GOP “establishment” did not turn into Sarah Palin… or whatever…. Now I’m looking at the DNC “leadership” debate on CNN and I am mortified… they look like they need some sort of medication or something… So unless someone wakes up on the Hill, we are so going to get screwed….. bilaterally 🙂

  13. I think they’re going to be rewarded either way, Margalit. They remember what the Republicans did to them for the last few years. They’re looking at these town halls and saying “what goes around comes around..”

    Unfortunately, the American people are going to lose out if that happens …

  14. He said lots of stuff, often contradicting himself. It is clear he doesn’t know much about health care policy. This will be written by the likes of Price and Ryan. So far all he has done is sign EOs, all of which can be overturned by the next president. He hasn’t done anything that can remain permanent. Health care will be a good trial, but you are much, much more optimistic than am I. Maybe because I am old and have been following this forever. I just don’t see the GOP changing its spots.


  15. I’m good with that “resistance” 🙂
    I think, whatever it is they do (and not because of this or any other administration), the managed care-caid is the wave of the future, barring an unlikely resurrection of government by the people…. so yeah, make the best of it…. I guess…

  16. I think I’d rather resist the fiction of health insurance altogether. Being a Localist at heart, let’s go for 3A, and be sure State Medicaid is the very best Medicare Advantage program available. I’d expect the access problems to evaporate overnight, and the Second Law will be fine.

  17. They can’t do that anymore, Steve. And they know it. I see only two scenarios: nothing gets done in Congress, or moderates on both sides get together and cobble some minor tweak that the President can sign.
    Remember, he said no cuts to anything, and health care for everybody, including specifically those who can’t pay. So far he is sticking to whatever he said (some of it good, some of it bad). In addition, Dr. Price committed in his Senate hearing that no American will be in any way worse off under the r & r. It’s on tape.
    People are holding their feet to the fire…. I wish the Dems would get over their little tantrums, and realize that there is a huge opportunity here to push through a bunch of good things… They will be rewarded in ’18 if they do.

  18. I think that I read over nearly all of those old GOP plans. By and large, few were very well fleshed out. Kind of generous to call them plans, but lets go with it. As to your ideas, they don’t really seem consistent with prior GOP plans, and Trump doesn’t seem, shall we say, detail oriented. That gets left up to the folks who wrote up those prior plans.

    So, I don’t know what they will come up with, but I think there are givens since they seem to appear in essentially every other plan.

    1) Big Medicaid cuts.

    2) Bigger deductibles. They will call them HSAs, or something. What term does Devon like? Consumer Directed Health Care Plans? Expect catchy names, and bigger deductibles.

    3) The focus will be on costs. Quality and access will not be factors. (Only side of the triangle gets addressed)