What the Devil won't tell you
As seen on TV: Attack on McSally 'age tax' falsely gets the story right
Congresswoman never voted for a tax but the plan is for people to pay more for health care
So apparently health care is the issue voters care most about because having a Russian mole authorized to empty our nuclear stockpile just doesn’t get the blood going.
I mean the most recent public poll of Arizona voters showed President Donald Trump’s job approval at 44 percent here when it was 44 percent nationwide. It’s fallen nationally since in the wake of, among other things, the president’s petulant reaction to the death of John McCain. Not that McCain has anything to do with Arizona, right?
Still, U.S. Rep. Kyrsten Sinema is running for the Senate on a health care platform and nary mentioning Trump, thus hewing to the scaredy-cat Democratic line.
OK, fine. So health care it is. But Martha McSally didn’t vote for an age tax as alleged in a too-cutesy-by-half ad paid for by Arizonans United for Health Care, a liberal organization that advocates for Obamacare. It's not to be confused with Arizonans Divided for Murder, let's note. The ad's a year old, but that group is hitting it hard again.
What McSally voted for in repealing parts of Obamacare was to let private insurance companies charge seniors more for health insurance. It’s not a tax. but it does illustrate how the conservative plan is for you to pay more for care, if possibly less for insurance.
A tax is levied by the government and collected by the U.S. Treasury to sit in the government’s account in the Federal Reserve Bank of New York. That’s a tax. If McSally is going to be accused of taxing the old, she also has to be credited with cutting taxes on the young.
The charge is false. But it's not entirely wrong.
McSally and the GOP, if they get another crack at health reform, want to put us in charge of our own individual health care. That’s a good thing and a bad thing insomuch as none of us know what kind of game Death is running on us. It also assumes that the middle class agrees it has it too good.
The good news is that this plan is a policy difference with the rest of the world that is a well-thought-out philosophy. That's a welcome relief when we are otherwise asked to believe nonsense like middle class jobs are lost to illegal immigrants, conspiracy isn't a crime, the poor took all the money and that there are "good Nazis."
What follows is, therefore, meant with respect.
Insuring the indestructible
On the one hand, health care is complicated. On the other hand, the basic premise of health insurance is not. Health insurance plans seek to charge customers according to the risk of them actually using their insurance. Those more likely to use it pay more. Those less likely pay less. In the best-case scenario, insurance plans sweep customers into a pool that balances out so the more people posing less risk who populate an insurance plan, the less everyone pays.
Most people get that.
Big companies with lots of employees can offer a plan that spreads that risk around and the overall cost is cheaper. It gets better for these people. Insurance companies than set up a provider network. They go to Tucson Medical Center and say “Hey, I've got six kajillion customers I’m going to send to you; what kind of deal can you get me on chemo?” A good one.
The problem starts when you get to the individual market. There’s it’s just you and you alone. So a young person, who eats chocolate for breakfast, smokes weed for lunch and drinks beer for dinner and still has blood pressure of 110 over 70 with two-percent body fat won’t be charged that much. Who doesn't want to insure the indestructible? Older people will because stuff starts falling off and out of your body after a certain number of years.
Under Obamacare, the plan was to set up exchanges where individual shoppers could buy into a plan with more people. Insurers offering plans in that exchange were limited by law to charging older Americans no more than three times the cost of younger Americans.
McSally voted to change that rule to let insurers charge five times as much, if the state they live in OKed it. That’s the age tax.
Before I say why this is bad for seniors, we gotta realize it could be good for them. Remember, the more young people end up in the pool – gnawing cookies, drinking beer and still sporting six packs – the more the insurance plan can spread risk so seniors paying five times as much isn’t necessarily a done deal.
There’s more: Say that kid gets into a car accident and has insurance. He or she will be more likely to afford the health care. Uninsured, he won’t get to negotiate a good deal on the services provided. So a young insured person will get say a $200,000 bill to split with their insurance company. A young uninsured person getting the same services will be charged much more than that, won’t be able to pay and then the rest of us incur that cost. It’s how the uninsured drive up costs and why there’s a mandate in the first place. It’s also why getting rid of the mandate will drive up costs again.
Getting young and healthy people on insurance plans is paramount to lowering insurance costs.
The Trump administration's dumping of the individual mandate helps explain why insurance premiums are expected to rise next year.
It's on you
I'm going to leave alone other topics like "invisible risk pools," reinsurance, adverse selection and risk corridors.
The basics are important because of the direction McSally and the GOP would take the country when it comes to health care.
McSally’s vote on an age non-tax illustrates just how conservatives want to rework health care. Speaking to Republican volunteers this month, McSally pointed out that health care services are the one major expense people incur oblivious to the cost.
Under the current arrangement, you aren’t the customer. The insurance company is the customer. They get charge premiums, negotiate rates, predict risk and keep the profit. So the incentive is to charge more and cover less (unless it’s Medicare, that’s different). That is the arrangement everyone hates.
Democrats say pay for people who can’t afford health care to get it. Wait. That’s what they used to say. Now they say “Medicare for All,” preferring single-payer options oblivious the reality that the best systems in the world are universal but not single-payer. Tell progressives that and they’ll call you a shill for Goldman-Sachs.
The Republican answer is to expose more people to more costs so the market can work its supposed magic.
If people knew chemotherapy at University Medical Center cost more than it did at St. Mary’s Hospital, then people would be more likely to go to St. Mary’s forcing UMC to lower their prices, McSally was saying.
What's in it for me?
If the patient isn’t on the hook for the bill and there’s zero upside in choosing the cheaper service, why would they flock to the bargain?
Even if you manage to save money, the insurance company gets the profit. Perhaps, they’ll pass those savings on to an employer. A big reason people are so angry at “the System” now is because any smart decision they make to save their company money goes straight to shareholders and the worker gets to continue being grateful for having a job. Across the economy wages have been flat waiting for stock prices to soar and then profits to break records before the worker got their end. As soon as they do, the U.S. Federal Reserve Board says “party’s over,” and starts raising interest rates, wiping out whatever meager raises were doled out.
Why would people seek to reduce their costs if there is nothing in it for them?
This is why one health insurance CEO took to CNBC and argued employers include incentives into their health care pricing practices.
Otherwise, the only thing that will lower costs is price exposure — which is at the end of the line of conservative health care plans that they call “patient-centered and market-oriented.”
This is why conservatives prefer to back-load the cost at point of purchase and lower the cost of the premium. Their offerings? Catastrophic policies, polices bought at fire-sale prices across state lines, limited policies unburdened by rules requiring a broad array of coverage and health savings accounts to help cover skyk-high deductibles. In that scheme, the cost of insurance is cheap. Health care itself is more expensive.
The plans can work great if consumers can predict what will ail them. “You guessed you would get ebola. Lucky you. You’re covered … " If not ... "Oohh, sorry. You guessed colon cancer. The correct answer was leukemia. That will be $341,872.43.”
The consumer who guesses wrong isn’t powerless. They can say no, drive a bargain and watch prices fall for the next guy.
People get mad when they are forced to choose caskets over chemo so Donnie and Eric can fly in a private jet.
The concept comes down to a rhetorical question that sums up conservative talk radio: Why should I pay for you? In fact if you really shove bamboo chutes up their cuticles (or get them drunk enough) they'll tell you the whole insurance industry needs to go because, again, "you aren't my problem."
Insert a colloquy on the meaning of civilization here.
Singapore, Switzerland, screwed by the Senate
McSally, when acting like a congresswoman from a swing district, was far more moderate before going full MAGA to win the Republican primary. In 2017, she got together with the “Problem Solvers Caucus” (seriously?) and they found a bipartisan solution to Trump cutting funding to Obamacare in the wake of Republicans failing to repeal it.
That included a $115 billion dollar, 10-year subsidy of the system to stabilize things in exchange for goodies like more state-level experimentation and an end to the medical device tax.
The compromise went nowhere because Trump's plan was to have Obamacare fail. The original plan was to have Obamacare repealed and replaced. Had that happened, McSally could point to the promise she kept and lots of upside (maybe) to go with the downsides. The worst place for a congresswoman to be is where the Senate left McSally. She voted for a bunch of unpopular things but the winners will never know the upside.
It's also why the House hates the Senate. The Senate pulls the rug out from under the rabble a lot.
A politically feasible GOP health care plan would have us all paying for ourselves except those who can’t and then spread a subsidy around as needed. That is an interesting idea that might work on paper.
The system they are seeking exists nowhere in the world. Singapore is closest to the mark because that tiny country shifts much of the cost burden onto the individual and away from insurance companies. Singapore, however, has a government-run health care plan. Switzerland offers maximum competition among insurance companies – nonprofit insurance companies. And Switzerland operates a lot like Obamacare, when you really get down to it.
Switzerland does have the highest incomes in the Western world. The U.S. doesn't anymore and it's a huge point of contention here in the greatest country on Earth for a millionaire to become a billionaire.
As intellectually reasonable as the great cost shift might be, it's a hard sell convincing people that the problem with the American arrangement is that the 99 percent don’t bear enough of the risk in an economy they don't think works for them in the first place.
Blake Morlock is an award-winning columnist who worked in daily journalism for nearly 20 years and is the former communications director for the Pima County Democratic Party.