Sen. Martha McSally is ducking the pre-existing conditions debate

Opinion: Sen. Martha McSally is right that her position on pre-existing conditions has been unfairly distorted. But she puts the blame in the wrong place.

In a recent telephonic town hall, Martha McSally reportedly said that the liberal media and liberal fact-checkers were in “collusion” to give voters the impression that the Affordable Care Act, aka Obamacare, was the only way to protect people with pre-existing conditions.

“Collusion” is too strong of a word. But it is certainly true that McSally’s position on pre-existing conditions has been unfairly distorted. And it is arguably true, and I would make the argument, that there are better ways to ensure health care for people with pre-existing conditions than the method employed by Obamacare.

However, McSally is wrong to put most of the blame on the Democrats and their echo chamber in the media for the distortion. McSally and other Republicans have ducked rather than make the case for the better alternatives.

ACA made some premiums skyrocket

Obamacare provides coverage in the individual health insurance market for those with pre-existing conditions by requiring insurers to accept all applicants and prohibiting medical underwriting.

In insurance, premiums are usually a function of risk. Those more at risk pay more.

Obamacare forbids this in the individual health insurance market. Everyone is to be charged the same regardless of their health condition or known needs. Among boffins, this is called community rating.

With community rating, the health care of those with chronic and serious illnesses are subsidized through the premium mechanism. That’s one of the reasons premiums for individual policies skyrocketed under Obamacare.

There are ways to lower premiums

The premium mechanism isn’t the only way to ensure that those with pre-existing conditions have access to health care and to subsidize that care. Using the tax mechanism – with government paying directly for the higher cost – is a more honest and fairer approach.

There are a variety of ways to do this. Government can set up programs to pay premium subsidies to insurance companies to cover the higher risk and cost of those with pre-existing conditions. Arizona Congressman David Schweikert came up with the idea of having the government reimburse insurance companies for large medical bills. Having government pay for these outliers would reduce the upward pressure on premiums from community rating.

I’ve long advocated allowing anyone whose medical expenses exceed a certain percentage of income to buy into the Medicaid program. That’s a safety net that’s already up and operating in all 50 states. And making that safety net available for those with pre-existing conditions would permit a return of medical underwriting to the individual market, making health insurance a much better deal for everyone else.

Taxes are fairer than higher premiums

Subsidizing the health care of those with pre-existing conditions through the tax mechanism rather than the premium mechanism much more equitably distributes the incidence of the subsidy.

With the premium mechanism in Obamacare, the subsidy is disproportionately paid by the young and healthy, who pay much more for health insurance than they would in a normal, risk-based insurance market.

Obamacare initially included a mandate that everyone purchase insurance even if it was a lousy value proposition for them. Despite the mandate, millions paid the penalty rather than buy an overpriced Obamacare policy.

Republicans effectively eliminated the mandate by setting the penalty at zero. Joe Biden proposes to reinstate it.

With the tax mechanism, the subsidy is paid disproportionately by those in their prime income-producing years, and reasonably related to their income. That’s a more appropriate way to allocate the additional cost.

McSally, GOP aren’t making the case

McSally has always said that she favors one of these alternative mechanisms for covering those with pre-existing conditions. She has never said that she wants to leave them out in the cold, as the attack ads would have you believe.

She has voted for a straight repeal of the Affordable Care Act, which would remove the existing premium mechanism without simultaneously enacting a tax mechanism in its place. But she has never favored that as the end point.

Republicans have never coalesced around one of the alternatives. As fatally, they haven’t made the case that there’s a way to cover those with pre-existing conditions while improving the individual health insurance market for everyone else.

In two Senate campaigns, McSally has invested virtually nothing in that message. She has undoubtedly been told by her political consultants that health care is a losing issue for her, that she needs to make elections about something else.

But sometimes candidates and campaigns don’t get to choose what elections are about. And sometimes losing a particular issue by less is an important step toward victory overall.  

The damaging distortion of McSally’s position on pre-existing conditions is ultimately on her.

Reach Robb at [email protected]

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