Can Trump Repeal and Replace Obamacare? (FREE)
Obamacare is giving us the worst of both systems: The expense of capitalism and the deadly incompetence of socialism.
President Trump’s attempt to fulfill his campaign promise to “repeal and replace” Obamacare – made during the election at every rally before voters – has descended into Cheyne-Stokes.
Here’s a reality check.
We’ll now see how good President Trump’s deal-making prowess really is. He’s attempting something Republicans never have been able to do: repeal, or at least sharply scale back, an entitlement, in this case Obamacare.
The general history of Republicans long was to be the “adult in the room,” paying with tax increases for welfare programs Democrats enacted. It also was called “root-canal Republicanism” because it gave taxpayers great pain “because it’s good for you.” The tax increases soon would cause a recession and eject Republicans from office (for president, in 1932, 1960, 1976 and 1992), bringing a new round of even more welfare programs passed by Democrats.
Beginning in the late 1970s, in particular with Jack Kemp, then Ronald Reagan, Republicans gradually adopted Supply-Side Economics, which still actually is the party’s philosophy, although often not mentioned by name. It promised that, if cuts in tax rates were designed properly, they actually would boost the economy so much tax revenues would increase, not decrease – if not in the short run, then in the long run.
From a propaganda perspective, this change in mentality has been a great boon to Republicans, bringing them victory after victory at the national, state and local levels. The victories came despite their idiocies in so many areas, such as perpetual wars under the Bushes, Newt Gingrich’s flaky speakership and the utter venality of such leaders as Paul Ryan and Mitch McConnell.
Those who bucked the perspective and raised taxes were either defeated or saw their careers end. Examples include President George H.W. Bush, who had promised “Read my lips, no new taxes!” And in California, governors Pete Wilson and Arnold Schwarzenegger also reneged on pledges never to raise taxes. Moreover, confirming at least part of Supply-Side Economics, their tax increases did not solve deficits, but worsened them.
Reagan’s problem was he not only was cutting taxes and restraining domestic spending, but boosting defense spending during the endgame of the Cold War. But when he started winding down the Cold War with Mikhail Gorbachev in the late 1980s, the deficits started going down. When he left office, his last deficit was smaller, as a percentage of GDP, than Jimmy Carter’s had been. The deficit would have vanished had President G.H.W. Bush not raised taxes to “reduce” the deficits, which in practice crashed the economy and raised the deficits.
By contrast, when Republicans finally controlled both houses of Congress in the late 1990s, they got President Clinton to go along with three tax cuts and budget restraint that balanced the budget for the first time in 30 years (at least according to the official numbers).
Unfortunately, Supply-Side Economics in the 2000s under President George W. Bush got a bad name when, although his tax cuts were decent, he went on the wildest domestic spending binge since LBJ – and blew $6 trillion on the Iraq War. The Republican congresses of the mid-2000s went along with him, as did the first two years of the Pelosi Congress, 2007-08. Fed Boss Greenspan’s inflationism, begun in 2001, was folly on top of folly.
So back to Obamacare…
The Trump/Paul Ryan plan was to repeal and “replace” Obamacare with a mixture of tax credits and an extension of medical savings accounts. That might have worked for some people, such as those in the middle class with jobs. For such people, it would have been an improvement on Obamacare’s ever-escalating premiums imposed on the middle class to the benefit of the insurance companies.
The problem was (and is) that something like 24 million people are too poor to afford regular insurance. That includes those with expensive “pre-existing conditions.” The added problem there is the pre-existing conditions can be so expensive – hundreds of thousands of dollars a year to treat just one person – they bankrupt any system of rational insurance.
More, as both the left-wing Nation magazine and the right-wing Breitbart.com have noted, the 24 million include many millions of Trump voters. They’re the middle class folks who got shafted by the economic idiocy of the past five decades, and backed the real estate billionaire in hopes he would make their lives better.
The socialized medicine systems in Canada, the UK and other countries have “solved” that problem by instituting long lines for care. There are two fallbacks: 1) The sick to go elsewhere, such as the USA or Switzerland, and pay hard cash for care. Not everyone can do that. 2) Die.
The problem in America began with World War II, when price controls prodded companies to reward workers in other ways, in particular with such benefits as medical insurance. That introduced third-party interference, meaning bureaucracy, between doctor/hospital and patient. Matters got worse when LBJ imposed Medicare and Medicaid. Before those “reforms,” people saved their money and haggled with doctors and hospitals. Those who couldn’t pay at all were taken care of by charity hospitals, or government-run county (not federal) hospitals. It was a much better, and cheaper, system. Granted, medical science was less advanced back then.
I think Trump will find some way to pull a rabbit out of the stethoscope. His main opposition now is the libertarian-leaning House Freedom Caucus, which wants to keep none of Obamacare’s taxes and mandates; they are right. Joined with Democrats, who would vote for changes only to impose a Soviet system, the Caucus’ nay doomed Trumpcare’s Version 1.0.
A possible “reform” might be to dump the 24 million into Medicare, if they’re not there already, and pay for it with some of the extra revenues generated by a booming economy. As part of Obamacare, more than 9 million already have moved into Medicare. An expansive system, costing, say, $5,000 a year each for insurance for all those people, would cost about $100 billion a year.
However – there are more “howevers” in medical politics than aches in my aging back – many millions of those 24 millions are the “Young Invincibles” who don’t want any kind of medical insurance because they’re in great health. Obamacare enslaved them to force them to pay for everybody else.
I’m not advocating any of this. I favor reducing as much as possible government involvement in health care . On the positive side, Trump’s election postpones the day, one hopes forever, the government takes over almost all of health care; although America likely would not have a 100% government-run system like the Canucks and Brits. More likely we would end up with something like Hong Kong’s hybrid system, which is largely public, but allows expensive private care.
Another positive sign is the rise of private care, and not just for such alternative treatments as acupuncture and supplements. It’s a “cash only” system for regular medical doctors. Trump’s election keeps at bay the obsession of liberals, and the official medical industry, to regulate what they can’t ban.
It’s also possible Trump will work out some sort of “deal” that greatly improve the system by restoring not just more market mechanisms, but the old pre-bureaucratic relationships patients had with their doctors.
In sum, the medical “system” is a mess, for being a “System” in the first place. There should be no “System,” just the freedom to find whatever medical care you need, with “insurance” only for catastrophes, and charity for the poor.
Longtime Orange County Register editorial writer now writes White Papers and other freelance projects at JohnSeilerMarketing.com.
The late Milton Friedman wrote an interesting column in 1996 on medical care. What follows is from Friedman:
In a chapter in his novel “The Cancer Ward” titled “The Old Doctor,” Alexander Solzhenitsyn compares “private medical practice” with “universal, free, public health service” through the words of an elderly physician whose practice predated 1918. . .
Mr. Solzhenitsyn himself had no personal experience on which to base his account and yet, in what I have long regarded as a striking example of creative imagination, his character presents an accurate and moving vision. The essence of that vision is the consensual relation between the patient and the physician. The patient was free to choose his physician, and the physician free to accept or reject the patient.
In Mr. Solzhenitsyn’s words, “among all these persecutions [of the old doctor] the most persistent and stringent had been directed against the fact that Doctor Oreschenkov clung stubbornly to his right to conduct a private medical practice, although this was forbidden.”
In the words of Dr. Oreschenkov in conversation with Lyudmila Afanasyevna, a longtime patient and herself a physician in the cancer ward: “In general, the family doctor is the most comforting figure in our lives. But he has been cut down and foreshortened. . . . Sometimes it’s easier to find a wife than to find a doctor nowadays who is prepared to give you as much time as you need and understands you completely, all of you.”
Lyudmila Afanasyevna: “All right, but how many of these family doctors would be needed? They just can’t be fitted into our system of universal, free, public health services.”
Dr. Oreschenkov: “Universal and public – yes, they could. Free, no.”
Lyudmila Afanasyevna: “But the fact that it is free is our greatest achievement.”
Dr. Oreschenkov: “Is it such a great achievement? What do you mean by ‘free’? The doctors don’t work without pay. It’s just that the patient doesn’t pay them, they’re paid out of the public budget. The public budget comes from these same patients. Treatment isn’t free, it’s just depersonalized. If the cost of it were left with the patient, he’d turn the ten rubles over and over in his hands. But when he really needed help he’d come to the doctor five times over. . . .
“Is it better the way it is now? You’d pay anything for careful and sympathetic attention from the doctor, but everywhere there’s a schedule, a quota the doctors have to meet; next! . . . And what do patients come for? For a certificate to be absent from work, for sick leave, for certification for invalids’ pensions: and the doctor’s job is to catch the frauds. Doctor and patient as enemies – is that medicine?”
“Depersonalized,” “doctor and patient as enemies”—those are the key phrases in the growing body of complaints about health maintenance organizations and other forms of managed care. In many managed care situations, the patient no longer regards the physician who serves him as “his” or “her” physician responsible primarily to the patient; and the physician no longer regards himself as primarily responsible to the patient. His first responsibility is to the managed care entity that hires him. He is not engaged in the kind of private medical practice that Dr. Oreschenkov valued so highly.