Thursday, October 08, 2020

Why Republicans can't come up with a better plan than Obamacare. Premiums have to be subsidized for many and Republicans don't like wealth transfer.

Here's why Republicans can't preserve coverage for preexisting conditions and replace Obamacare for average people.

The way that insurance has kept premiums affordable, in the past, was to deny coverage for people with preexisting health conditions. Premiums are less in a pool of lower cost healthier people.

Protecting people with preexisting conditions raises the premiums higher than a large segment of the population can pay. Thus the need to subsidize premiums for lower income people; something Republicans don't like. Subsidies are a form of wealth transfer.

Another way around that dilemma is to have a large pool of insured people; such as big employers providing coverage or universal government provided single payer coverage. The bigger pools tend to spread and soften the spikes in the cost a bit more, but if there are a lot of unhealthy people in the population, premiums are still high. Employers have paid those premiums in the past, but as time goes on, more and more employers are dropping the health coverage they provide to their employees and / or making the employees pay a bigger share of the cost.

Income discrepancy has gotten so high, in this country, that health insurance doesn't work without subsidies.