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Obamacare Repeal: The Dangers of Unrealistic Expectations
David Catron
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From the moment the GOP released the American Health Care Act, the first iteration of what will evolve into Obamacare repeal and replace legislation, conservatives have been griping. The editors of Investor’s Business Daily sum up the general reaction of the right thus: “Republicans have labored to produce plan that replaces ObamaCare with…. ObamaCare.” Interestingly, the editorial goes on to refute this argument by listing the bill’s positive attributes, including repeal of the law’s individual mandate, employer mandate, countless hidden taxes, and its expansion of HSAs. Yet IBD’s editors conclude that it “supports all the key elements of Obamacare.”

This is nonsense. Indeed, to employ an old aphorism, it makes the perfect the enemy of the good. This viewpoint is not merely unrealistic about what the Republicans can accomplish, considering their narrow margin in the Senate, but it actually reduces the chances that a repeal bill will ever reach the President’s desk. Here’s a little reality check for conservatives and libertarians who fantasize about “going back” to free market medicine — we haven’t had anything resembling a free health care market since World War II and we will never have one. Why? The public doesn’t really want one. What the voters really want is cheap, accessible care — any way they can get it.

Free market purists, including yours truly, believe the best way to achieve that goal is through unfettered competition and open markets. But if one follows that line of reasoning to its logical conclusion, it means that that the government — both state and federal — must stay completely out of health care. Medicare, Medicaid, and every other government health care program would have to be repealed. The public wouldn’t stand for it. The voters don’t object to Obamacare because it’s a gateway drug to single-payer. If that were true they would abjure Medicare. They hate it because it fines them for failing to buy health insurance coverage that costs them too much.

And, not coincidentally, those very issues are what the American Health Care Act addresses. First, and most important, the plan repeals the unconstitutional individual mandate — effective after December 31, 2015. This means that no American who failed to buy coverage last year will owe the IRS a dime in penalties, fines, taxes, or whatever Chief Justice John Roberts is calling them these days. Likewise, the job-killing employer mandate will be retroactively repealed. Employers will no longer have to hold off hiring new workers in order to avoid outrageous fines for not providing health insurance coverage that neither they nor their employees can afford.

The bill also kills the vast majority of stealth taxes Obamacare imposes on you. For example, it eliminates the tax on over-the-counter medications. Oh, you didn’t realize you were paying that? Prior to Obamacare, you were permitted to pay for over-the counter-medication on a pre-tax basis by using a Flexible Spending Account (FSA). The “Affordable Care Act” killed that. The bill repeals Obamacare’s cap on contributions to FSAs, which were unlimited before the advent of President Obama’s “signature domestic achievement.” This cap was particularly hard on parents of special needs children, many of whom used FSAs to pay for special needs education.

The much-maligned GOP plan also eliminates the high medical bill tax. Didn’t know about that one either? Before “reform,” people who incurred high medical bills got a deduction for medical expenses exceeding 7.5 percent of adjusted gross income. The “Affordable Care Act” jacked that percentage up to 10 percent. The much-maligned Republican plan also reduces Obamacare’s HSA tax. Haven’t heard about that one? Obamacare increased the tax on early withdrawals from an HSA from 10 to 20 percent. The American Health Care Act takes that back down to 10 percent. The plan also eliminates the moronic medical device tax, a natural born job killer.

The list goes on and on, yet conservatives and libertarians are kvetching because of provisions like the 30% premium surcharge that the bill would allow insurers to charge patients who wait until they are ill to buy coverage. Countless commentators have conflated this with the individual mandate, but such comparisons are ridiculous. The individual mandate requires you to buy health insurance simply because you are alive, an outrageous assault on personal liberty. The GOP plan’s much-discussed premium surcharge is an incentive based on an individual’s choices. The former eliminates personal choice altogether. The latter incentivizes intelligent choices.

And, while conservatives complain about the bill, they should consider that it does two things for which they have long been clamoring: It defunds Planned Parenthood and it reforms Medicaid. The benefits of the former are obvious — the taxpayers will no longer be forced to fork over hundreds of millions to the world’s most notorious abortion mill and purveyor of infant body parts. Anyone who objects to the crimes against humanity committed by Cecile Richards and her army of abortionists should be celebrating this bill. Likewise, they should beat the drum for the Medicaid provision. As House Speaker Paul Ryan put in a press conference yesterday:

It has a Medicaid per capita block grant, that’s the biggest entitlement reform anybody has seen here for decades. It nearly doubles the amount of money people can contribute to health savings accounts, that is fundamental part and a crucial part of conservative healthcare policy.

But it would appear that a lot of conservatives would rather have 100 percent of nothing than the partial repeal offered by American Health Care Act. They carp about tax credits and inaccurately conflate them with Obamacare’s unworkable system of subsidies. They claim the bill leaves the law’s Byzantine regulations in place. And it is true that this plan isn’t perfect. But perfect isn’t one of our choices. If conservatives hold out for full repeal and cling to the fantasy of a free market replacement plan, there is a real danger that Obamacare will never be repealed.

David Catron
David Catron
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David Catron is a health care consultant and frequent contributor to The American Spectator. You can follow him on Twitter at @Catronicus.
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