Hillary Clinton has called for the repeal of the “Cadillac Tax,” a part of the Affordable Care Act that is soon to go into effect, and which most Americans probably know nothing about. You can look at this as a cynical effort to win the support of certain constituencies that are important to Democrats, which it may be.
But it’s also yet more evidence that only one party’s presidential candidates are even remotely interested in grappling with the difficult work of policy-making, particularly on the issue of health care.
In one sense that may be understandable, since Democrats want government to do affirmative things while Republicans want to limit government wherever possible. But rolling back government programs can be as complicated as creating new programs, and can involve just as many tradeoffs. While Republicans are united in their commitment to repealing the ACA, they still won’t acknowledge that doing so would be a huge disruption; instead, they want people to believe that it would be simple and easy, with only good things resulting.
The Cadillac Tax could become a big issue once it goes into effect. It levies a tax on generous health insurance plans, essentially taking away the preferential tax treatment that employer plans get. The goals: it would generate revenue to help pay for other parts of the law, and it would encourage employers to move to more affordable plans. That would then help to “bend the cost curve,” one of the law’s primary goals.
But a lot of those generous plans were negotiated by labor unions, who would very much like the Cadillac Tax to disappear. What about the lost revenue? Clinton hasn’t been too specific yet, but says that other health care reform ideas she has would make up for it.
You can make a reasonable argument for repealing this tax, because it could accelerate the broader trend toward plans with higher deductibles, which people don’t really like. But Clinton should be asked to provide details on what she thinks the effect of repealing the Cadillac Tax will be on the cost curve, and where she’s going to get the revenue.
It’ll be interesting to hear her answer, since this is an issue she obviously knows and cares a lot about. Republicans, on the other hand, continue to demonstrate that they aren’t serious about health care — even though for years they’ve claimed that repealing the ACA is their top policy priority.
When you ask Republicans specific questions about the consequences of repealing the ACA, it turns out they want to keep the parts that are popular and ditch the rest, with little attempt to grapple with the contradictions that would create. The individual mandate, of course, has to go, because people don’t like it. But when you ask about whether they’d also allow insurers to deny people coverage because of pre-existing conditions again, they’ll say, “No no no!”
Some policy context: When Democrats settled on their preferred version of health care reform (something that happened before the 2008 campaign; what Obama and Clinton each came up with was a product of the party’s consensus on the issue), they had a few central problems they wanted to solve. One, of course, was the tens of millions of Americans who lacked health insurance. Another, just as critical, was the lack of security all Americans faced.
The most common way that lack of security played out was in the “pre-existing condition,” where insurance companies would refuse to write new policies for people who had been sick before. If you were a cancer survivor or had a chronic condition like diabetes, it could be impossible to get insurance.
The ACA fixed that problem by forcing insurers to accept all applicants regardless of pre-existing conditions (“guaranteed issue”). But if insurers have to accept all those applicants, what’s to stop people from not carrying insurance at all, then just waiting until they get sick to apply? If that happened, insurers would be paying out for benefits but not getting premiums, and the entire system would collapse. The answer was that you need as many people in the risk pool as possible — hence the individual mandate.
But Republicans who want to repeal the ACA know that Americans won’t stand for bringing back denials for pre-existing conditions. What do you say? The only candidates who have anything resembling an actual health care plan are Marco Rubio, Bobby Jindal, and the departed Scott Walker. They all say the same thing: Eh, don’t worry about it. People with pre-existing conditions can go to state-based “high-risk pools” to get coverage.
Two things about this idea: The first is that, yes, we would be bringing back denials for pre-existing conditions. When you applied for insurance, you’d have to go through that whole process of listing every condition you’d ever sought treatment for, and the insurers would invest all that time and money figuring out whether they wanted to cover you, or whether they wanted to shunt you off to the high-risk pool.
The second is that high-risk pools are the opposite of affordable health care. Because they gather all the sick, expensive patients in one pool, they have to charge exorbitant premiums to meet their costs. They’re the health insurance equivalent of going to a loan shark — it might be the only option you have left, but if it is you’re going to pay dearly for it. And Republicans think we’re going to put tens of millions of people into them? Please.
Meanwhile, apart from Jindal’s and Rubio’s completely unrealistic proposals, none of the other candidates (seriously, go to their websites and look for yourself) even has a real health care plan.
Of course, there’s no law saying every presidential candidate has to issue health care proposals. But Republicans are the ones who all agree they want to do something radical on the issue: repeal the ACA, which would be spectacularly disruptive and raise a huge number of complicated questions. The fact that they’re barely bothering to give any specifics says a lot. Hillary’s call for repealing the “Cadillac tax” may be questionable, but it’s a real proposal that starts a conversation about the future of the ACA that isn’t based in fantasy.