Mises Wire

Ryancare’s Fatal Logical Flaw

The Congressional Budget office today reported that 24 million people would lose health insurance coverage under the Ryancare bill. Mainstream Republicans were not pleased to hear that.

But let’s look at this figure a bit more closely. When we do, it becomes apparent that the Republicans have created their own problem. They are trying to keep Obama’s definition of healthcare policies while repealing Obamacare. That is not only an exercise in illogic. It is an exercise in futility.

The problem here is obvious. Ryancare keeps a one-size-fits-all definition of health insurance, a policy that includes all but the kitchen sink, for example, mandating pregnancy benefits for single men and retired couples. If you keep government in the business of mandating every detail of the health insurance policy, that is what you get: a swollen policy that nobody wants and almost nobody can afford.

Eliminating the mandate to buy is important. But eliminating the mandate restricting what you can buy is at least as important.

If consumers could choose the policy they wanted and felt they could afford, 24 million would not lose their coverage. We might even see an increase in coverage. More importantly, with consumers in charge, providers might start competing for their business, which is the only way to increase supply, improve supply, and by doing so bring costs down.

Newt Gingrich, who is a very smart fellow, also writes an op-ed today saying that Ryancare is the best the GOP can do because the Democrats will vote against and (in the Senate) filibuster anything better. As a result, any changes must be done under the budgetary “Reconciliation” process, which means that it must Impact the federal budget and also cannot increase the deficit.This limits options. For example, one cannot permit insurance companies to offer policies nationally through this process.

For Gingrich to take this position is puzzling to say the least. As you may recall, he is the one who crafted the “contract with America” which Republicans used to reclaim control of the House in 1994 after so many decades in the minority. Does he actually think that Republicans will try to explain “Reconciliation” limitations to the voters in 2018 as part of thirty second ads? I think not. What they ought to do instead is to craft a real Obamacare Repeal and Replace bill, fill it full of logical improvements such as allowing insurance companies to offer policies nationally, then stand back and let the Democrats vote it down and filibuster it. Having got the Democrats on record, they could then go back to bills based on Reconciliation, having put their best ideas forward. That would be easy for voters to understand.

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