How to Fix ObamaCare's 'Death Spiral'

Health insurers like Humana and UnitedHealth are abandoning ObamaCare exchanges in droves. Those that remain are driving premiums and deductibles through the roof in a futile attempt to recoup mounting losses. As plans become unaffordable, healthy consumers cancel their policies, making it even harder for insurers to cover rising costs and subsidies. That’s called a “death spiral.”

The Affordable Care Act (ACA) would unravel on its own, but that would take too long and cause consumers too much pain in the process. As I see it, that is simply unacceptable. It must be repealed and replaced. On that Republicans agree, but they’re hopelessly divided on exactly what to repeal, what to replace it with, and on what timeline – needlessly so, in my opinion.

It comes as no surprise that legislation as hastily drafted and recklessly enacted is so remarkably flawed. It took Harry Reid’s insidious nuclear option to get it through the Senate without a single Republican vote and Nancy Pelosi’s “we have to pass the bill so that you can find out what is in it” to get it through the house.

The ACA’s fatal flaw is that it incentivizes consumers to ignore the mandate, pay the fine, and simply sign up when something goes wrong. That, along with lucrative subsidies, lays the burden of the sick and poor on the healthy middle class. Simply put, ObamaCare is far more entitlement than insurance, and a poorly designed entitlement at that.

So it needs to go, I think that much is clear. And it must be unraveled without leaving consumers without coverage, especially those with preexisting conditions. But if Republicans repeal the tax burden, that leaves an enormous unfunded budget deficit. That’s the argument for simultaneously repealing and replacing it with new healthcare legislation: to avoid any gaps in coverage and funding.

There’s just one problem: Healthcare touches everyone, from corporations and small businesses to every American citizen. Pushing a replacement bill through both chambers of Congress and shoving it down the throats of the American people is a bad idea. As the Wall Street Journal’s Kimberley Strassel explains so well, that would repeat the same mistake Democrats made in their zeal to implement President Obama’s signature legislation.

Sen. Rand Paul and Rep. Mark Sanford are proposing free-market healthcare legislation that’s backed by the the House Freedom Caucus. Speaker Paul Ryan, on the other hand, wants to repeal by the end of March and take time to come up with a well-considered replacement bill. So far, President Trump and Health and Human Services Secretary Tom Price have remained on the sidelines.

That’s the debate that has the GOP divided and in disarray. In the meantime, Democrats are capitalizing on the chaos with a renewed effort to save ObamaCare.

The only solution that makes sense to me is to repeal and replace the ACA simultaneously, but later. Not too much later, but there is absolutely no reason why the GOP can’t put together a step-by-step plan to overhaul ObamaCare this year and sell it to the American people.

Besides touching individuals and companies, health insurance impacts every medical professional, hospital, clinic and insurer. And half those people are Democrats. Willingness to extend an olive branch – to slow things down and listen and debate – will go a long way toward getting 60 votes in the Senate (some Democrats are up for reelection) and avoiding the nuclear option. That’s a win-win.

President Trump should sit down with Speaker Ryan, Secretary Price, Sen. Paul and Rep. Sanford and get them to agree to a detailed plan and timeline. Then he should stand up in front of the American people and explain exactly how this is going to go down and why. He’s the only one who can sell it, and if he wants to avoid the same fate as his predecessor, he must.