Prescription to fix Obamacare: Q&A with health care expert John C. Goodman
by Bill Whitaker
August 18, 2013
Source: Waco Tribune-Herald
Waco native John C. Goodman, president and CEO of the Dallas-based National Center for Policy Analysis, author of the book “Priceless: Curing the Healthcare Crisis” and a vocal critic of the Affordable Care Act of 2010, talked with the Trib before his address at the McLennan County Republican Club luncheon last week. During the interview, the 1964 Richfield High School graduate discussed how political gridlock is preventing everything from minor fixes to a desperately needed overhaul of the Affordable Care Act; his strong support of a little-known Republican proposal that would allow every American to use tax credits to buy health insurance (or suffer the consequences in taxes) and then supplement it with after-tax dollars; efforts by some Republicans including U.S. Sen. Ted Cruz to defund the Affordable Care Act even if it means shutting down the government; and fears the act will upset the American work world with many employees suffering as companies cut costs to meet regulations in the new law. He also criticized how the health care act subsidizes individuals’ health insurance at widely different rates.
Q We’re seeing increasing evidence the Affordable Care Act is unraveling, most recently in the Obama administration’s announcement of a year’s delay in the so-called “employer mandate” that was supposed to take effect Jan. 1, 2014, and require most mid-sized and large employers to provide specific sorts of health care coverage to full-time employees. More lawmakers are questioning the very practicality of the law if not its principles. You’re a staunch critic of this law. How bad do you believe it is?
A The law is a Rube Goldberg contraption. It was put together with a bunch of special interests sitting around a table. Each was asked the minimum thing they had to have to support the law and no one was making sure all the parts fit together. And, well, they don’t fit together very well. The troublesome thing is it passed on a pure party-line vote. Normally, when legislation is passed and you need to change it, it’s not that hard to make small tweaks to it. But the Obama administration and Democrats can’t even change a dotted “i” or crossed “t” because Republicans won’t let them. So both sides have squared off.
Q We published a piece by conservative columnist George Will the other day making that very point — that instead of calling House Speaker John Boehner and saying, “We need to tweak this and fix that,” the president just changes the law himself, possibly overstepping his executive authority. But can he be blamed when Congress isn’t about to help him really fix this thing?
A It seems to me the president is pushing the boundaries of the Constitution. He’s really out there on the edge — and he’s a constitutional lawyer. The president is supposed to execute faithfully the laws of this country and he seems to be able to change them unilaterally. I don’t really understand that.
Q Yes, but acknowledging all that and going back to my question: How can we fix this if Congress won’t work with the president on it?
A We need major reform and President Obama has not signaled he is willing to consider serious reform of this act. But we’re going to get to the point where something has to happen. You even have labor unions very upset at the way this thing is turning out. Some unions now realize that (employees at) smaller firms they compete with, the non-union firms, are going to be able to go to the health insurance exchange and get highly subsidized insurance, but they’re not giving anything new for union members. They’ve realized, “Hey, we’re paying taxes to help our competition.” In any event, we need major changes. What Republicans must think about is what most needs to be done. When people are ready to deal, Republicans need to know what they want.
Q Conservative columnists such as Ramesh Ponnuru are critical of the act but also fault Republicans for not bringing their own proposal to the table. I know you’ve talked about a Republican health care plan by U.S. Sen. Tom Coburn and Rep. Paul Ryan, but I don’t hear many Republicans talking about it.
A Ponnuru is right. Republicans are not pushing alternatives. There is a good one and it’s the one that John McCain ran on in 2008. People won’t remember this but that became the biggest issue in the election. Obama spent millions and millions of dollars attacking the John McCain health care plan, even though it was more progressive than the Obama bill. But Republicans have not endorsed that. They’re not pushing it, they’re not talking about it, and I think that’s a mistake.
Q A local Republican suggested to me that rather than have the Affordable Care Act, we should continue with the system we have. He said hospitals make enough money that they can easily afford to take care of people of limited means who show up in emergency rooms for routine care.
A Well, the way things were even before Obamacare was not good. We cannot continue to have health care costs growing at twice the rate of the growth of income and have one out of seven people uninsured. We do need a better system. The Ryan-Coburn approach (a fleshing out of the McCain plan), I think, is good: Let’s treat everyone the same. The biggest problem that’s going to be noticeable to people about Obamacare is that it doesn’t treat people the same. There are thousands and thousands of dollars’ difference in subsidies depending on how people get their health insurance.
Q What are the strengths of the Coburn-Ryan plan?
A Well, that would be one — treat everybody the same in terms of tax credits applied to health insurance. If people want extras in their health care insurance, they can buy that coverage with after-tax dollars. Unlike Obamacare, the Coburn-Ryan plan doesn’t discriminate against people based on how many hours you work or how many people you work with or whether people are buying insurance away from their place of work or getting it through an employer. It would no longer encourage employers to fire people or downsize or have some employees work part-time rather than full-time because the Republican plan would treat them the same no matter what they do. That’s really important.
Now one thing I would do: I think the amounts today (in tax credits for health care coverage) ought to be $2,500 for an adult, $8,000 for a family of four. The reason I’m thinking those numbers is that’s what the Congressional Budget Office estimates it’s going to cost when people go into Medicaid. I would let people go into Medicaid with their tax credits if they want to, but I would let everybody in Medicaid go private if they wanted to add something to the basic coverage. So there you have Medicaid as a backstop. It’s going to be rationing by waiting in Medicaid, it’s not going to be the best plan, but if people want that, I would make that available. You see, Obama leaves 30 million people uninsured and it seems to me that is unnecessary.
Q Democrats point out the idea of the individual mandate was originally a Republican idea. Were both Republicans then and Democrats now wrong about the principle of mandating that everyone in the nation have health care coverage?
A Yes. What the tax credit approach does, if you don’t get insurance, you’re going to pay more taxes, so there’s a built-in penalty. And that’s enough.
Q U.S. Sen. Ted Cruz, one of our senators, is leading a charge to defund Obamacare, even to the point of shutting down the government over it. Other Republicans such as our other senator, John Cornyn, who is also against Obamacare, draw the line at shutting down the U.S. government to defund the Affordable Care Act. Is the threat of Obamacare enough we should shut down the government to kill it?
A I don’t like that approach. First, it’s not going to work and, second, it’s not good strategy for Republicans because it shifts the attention to them. It’s better for them if the attention is on Obamacare and what is not working. That’s just smarter, so I’m more with Cornyn than Cruz on this issue.
Q How do you get Republicans to engage, though? You say both Republicans and Democrats need to sit down and fix this thing. But no one is listening.
A Republicans have not been willing to endorse a serious alternative and go out and talk about it. That’s a mistake. It’s not enough to say, “Repeal it!” At the end of this year, the individual insurance market is virtually going to go away because Obamacare is going to wipe it out and the only place you’ll be able to get insurance as an individual is in a health insurance exchange. And if the exchange goes away, too, then what are people going to do for health insurance? You have to replace it with something.
Q Some city leaders pushed the state this year to expand Medicaid in Texas to facilitate the Affordable Care Act. They take the attitude of Arizona Gov. Jan Brewer in that, since we’re already kicking money into the U.S. government in the form of taxes, they might as well get some of those dollars back for care of local poor people and their health needs. State leaders, however, refused to expand it on the grounds it is going to collapse under its own weight in cost and regulations and there’s no sense communities’ getting hooked on it when it might all go away. Which side is right?
A I would make a third argument because I don’t agree with either position. At between 100 and 138 percent of the poverty level, if we expand Medicaid, those people cannot go into the health insurance exchange. They have to go into Medicaid or be uninsured. But if you don’t expand Medicaid, they can go into the health insurance exchange marketplace to obtain private insurance.
Now the original thinking was that this private insurance is going to be a lot better, that it’s going to look more like a Blue Cross plan. As it’s evolving, it looks like it may look more like Medicaid. But in any event, it’s better insurance and so when these people go to the hospital or the doctor they’ll be paying higher fees. It’s better for your medical community, better for the patients. Below 100 percent of the poverty level — and this is one of the really strange things about Obamacare — if you don’t expand (Medicaid), those people cannot go into the exchange. Is that not bizarre?
Q Why not?
A Because that’s the way the law is written.
Q But I don’t understand the rationale.
A It makes no sense. Those are the people who need it most. Now what we say is, for these people, it’s better if they go into the exchange, better if the state doesn’t expand (Medicaid). I mean, the federal government is paying almost everything over here (in subsidizing health care coverage obtained through health insurance exchanges). But in Medicaid, the state of Texas must pick up 10 percent of the tab with the federal government, maybe more later.
But I think those people at between 100 and 138 percent of the poverty level can get a better deal — better for the patient, better for doctors — through the health exchanges. Below 100 percent, let’s ask for a waiver. Texas has all these health districts where we spend money on poor people, yet that doesn’t count as part of Medicaid (under federal law). We should just say, “Give us a block grant, we’ll maintain this effort, we’ll cover everybody. Just give us the money and let us do it without all the restrictions.” Where I disagree with Gov. Rick Perry and some state leaders — this thing is not going to collapse. It has serious problems, yes, but it can limp forward with millions of people being insured. There are problems but not problems so big that the whole thing will just collapse.
Q What would you advise someone of limited means in terms of health coverage?
A If they’re going to offer highly subsidized insurance in the exchange, one ought to get it. You only have to pay 3 percent of your income so, let’s say family coverage is $15,000 and a person makes $30,000 — he’s only going to have to pay $900 for that $15,000 of insurance, so I’d advise him to do it. I would advise him to try not to be in Medicaid because I think Medicaid is a rationing program. People on Medicaid are the last patients that doctors want to see. They end up going to hospital emergency rooms or community health centers. So even if you have to work overtime to get your income up above the Medicaid level, it’s worth it to get private insurance.
Q Are you optimistic about all this getting worked out, maybe after the 2014 elections? Or will gridlock continue on this issue?
A I’m optimistic. I’ve formed a group that consists of the business community, chambers of commerce, small business and health insurance companies. These people have been meeting regularly. Their assignment is to identify the worst problems in health care and figure out the right way to solve them, so when discussions do begin on how to fix Obamacare, we’ve thought it through and have some recommendations.
Interview conducted, condensed and edited by Bill Whitaker.