For the most part, the political debate over President Barack Obama’s health-care overhaul has become a duel between vague slogans: Republicans say they want to “replace” the Affordable Care Act but generally don’t say with what. Democrats say they want to “fix” it but usually don’t say how.
So Democratic Sens. Mark Warner and Mark Begich deserve credit for advancing specific legislation to change the law. The main change they’re advocating, though, is unlikely to make people any happier with the law – and could cause new problems.
The senators want to give customers buying insurance on the Obamacare exchanges a new option with low premiums and high deductibles. It would be called a “copper” plan, in contrast to higher-premium, lower-deductible plans already on the exchange (platinum, gold, silver and bronze).
Health-insurance companies love this idea, insisting that adding copper plans would simultaneously increase coverage rates and reduce taxpayer subsidies. But there are reasons for skepticism.
Obamacare’s regulations limit how insurers can compete for business. They can’t provide cheaper plans by opting out of covering any of the things that the law considers “essential.” The main ways they can cut premiums are by offering narrower networks and increasing out-of-pocket costs. The high deductibles in Obamacare plans have already generated a lot of criticism. Last year, CBS News reported that the average individual deductible in a bronze plan was “a whopping $5,081 per year.” Copper plans would have even higher deductibles than bronze ones.
This trade-off should appeal to a small number of people who foresee themselves being pretty healthy. Their low premiums would entitle them to the preventative care that Obamacare requires all insurance plans to cover, but in the event of a major problem would leave them with big bills to pay. This is more or less the opposite of the way insurance should work.
A pro-copper plan study put out by the insurance industry assumes that some people who were uninsured will buy the new product: hence the coverage increase. And it assumes that some people who bought higher-premium plans will migrate: hence the lower average premium and taxpayer subsidy. That migration could, however, make the exchanges less stable by reducing the amount of money that healthy people are putting into them through their premiums. And what do you want to bet that as people confront the deductible sticker shock, politicians decide that taxpayers need to pick up more of the costs?
This fix, meanwhile, wouldn’t address a lot of what people find objectionable about Obamacare. The individual mandate would remain coercive, a lot of people would still find themselves losing their existing coverage, and the law would still reduce employment levels.
An NBC News/Wall Street Journal poll earlier this month found that only 36 percent of the public favors Obamacare. So you can understand why Warner and Begich – both of whom voted for the law and are up for re-election next month – would want to say that they’re trying to reform it. Too bad the tiny cosmetic change they’ve opted for could actually make things worse.
Ramesh Ponnuru, a Bloomberg View columnist, is a senior editor for National Review, where he has covered national politics for 18 years, a visiting fellow at the American Enterprise Institute and a resident fellow at the University of Chicago’s Institute of Politics.