RepubliCare Will Destroy the Individual Health Insurance Market Completely

Kameleon007/Getty

Fight disinformation. Get a daily recap of the facts that matter. Sign up for the free Mother Jones newsletter.


Megan McArdle is no fan of Obamacare, but she understands what will happen if Republicans demolish it without putting anything of substance in its place:

The base may rejoice when they hear that Obamacare has been “repealed” (sort of). But their cries of glee will be drowned out by their wailing when they find that they cannot buy individual insurance at all.

That’s why I don’t understand what Republicans are trying to do with this bill. What do they think will happen after they proudly proclaim that they’ve repealed Obamacare—followed in short order by the complete implosion of the individual market? Do they really imagine that they will be allowed to leave the rubble-filled lot there and proclaim that they’ve undone President Obama’s mistake? Or that, having watched them destroy the individual market, voters will be eager to let Republicans touch any of the other structures cluttering up America’s health-care policy landscape?

I am puzzled by this. As you all know, I agree entirely with McArdle. If you keep the regulations on preexisting conditions—and Republicans have no choice about that—but cripple both the individual mandate and the subsidies, the result is catastrophe. What happens is simple:

  1. Young, healthy people leave the market because they’re no longer required to get insurance.
  2. Poor people of good or average health leave the market because they can’t afford coverage with only skimpy subsidies.
  3. Even if they have to beg, borrow, or scrimp, sick people will all sign up and insurance companies will be forced to accept them.
  4. With a pool full of expensive, sick people, and not much of anyone else, insurers will lose massive amounts of money.

This is no secret. It’s obvious to everyone. And yet, I hear very few people talking about it. Why? Shouldn’t insurance companies be yelling at the tops of their lungs? If the Republican bill passes, they’ll have only two choices: lose lots of money or abandon the individual market altogether. I’m guessing the latter. Legally, the only way they can avoid having to insure the very sick is to simply stop selling individual coverage. Hell, a public company would probably be opening itself up to lawsuits for breach of fiduciary duty if it didn’t abandon the market.

Am I missing something here? Why isn’t this the biggest thing people are talking about? Why isn’t it on cable news 24/7? Why aren’t insurance companies screaming bloody murder? Why is this destruction of the individual market getting so little attention?

UPDATE: Paul Ryan is on TV suggesting that not only is this not a problem, but his bill will make things better. People with preexisting conditions will all be covered by high-risk pools, while everyone else will buy ordinary insurance. This is ridiculous. First, the funding for the high-risk pools is far too small to cover everyone who would need it. Second, how do you force people to use high-risk pools? You can’t. Sick people can legally buy from anyone who sells coverage, and they will.

With that taken care of, now Ryan is trying to pretend that advanceable tax credits are different from Obamacare subsidies. What a hack.

HERE ARE THE FACTS:

Our fall fundraising drive is off to a rough start, and we very much need to raise $250,000 in the next couple of weeks. If you value the journalism you get from Mother Jones, please help us do it with a donation today.

As we wrote over the summer, traffic has been down at Mother Jones and a lot of sites with many people thinking news is less important now that Donald Trump is no longer president. But if you're reading this, you're not one of those people, and we're hoping we can rally support from folks like you who really get why our reporting matters right now. And that's how it's always worked: For 45 years now, a relatively small group of readers (compared to everyone we reach) who pitch in from time to time has allowed Mother Jones to do the type of journalism the moment demands and keep it free for everyone else.

Please pitch in with a donation during our fall fundraising drive if you can. We can't afford to come up short, and there's still a long way to go by November 5.

payment methods

ONE MORE QUICK THING:

Our fall fundraising drive is off to a rough start, and we very much need to raise $250,000 in the next couple of weeks. If you value the journalism you get from Mother Jones, please help us do it with a donation today.

As we wrote over the summer, traffic has been down at Mother Jones and a lot of sites with many people thinking news is less important now that Donald Trump is no longer president. But if you're reading this, you're not one of those people, and we're hoping we can rally support from folks like you who really get why our reporting matters right now. And that's how it's always worked: For 45 years now, a relatively small group of readers (compared to everyone we reach) who pitch in from time to time has allowed Mother Jones to do the type of journalism the moment demands and keep it free for everyone else.

Please pitch in with a donation during our fall fundraising drive if you can. We can't afford to come up short, and there's still a long way to go by November 5.

payment methods

We Recommend

Latest

Sign up for our free newsletter

Subscribe to the Mother Jones Daily to have our top stories delivered directly to your inbox.

Get our award-winning magazine

Save big on a full year of investigations, ideas, and insights.

Subscribe

Support our journalism

Help Mother Jones' reporters dig deep with a tax-deductible donation.

Donate