I’ve been slightly baffled by the latest Republican attack on Obamacare, namely that the private insurance plans on the exchanges tend to have pretty high deductibles. Say what? Last month, the attack line du jour was exactly the opposite: Obamacare premiums were too high because it set such low requirements for deductibles and out-of-pocket caps. So which is it? Should we allow higher deductibles in return for lower premiums? Or should we require even lower deductibles and accept higher premiums in return? There’s not really any third option.
But that’s not the only bit of hypocrisy at play here. There’s also the fact that Republicans love high deductibles. I’ll let Ezra Klein do the honors:
What’s confusing about this line of attack is that high-deductible health-care plans — more commonly known as “health savings accounts” — were, before Obamacare, a core tenet of Republican health-care policy thinking. In fact, one of the major criticisms of Obamacare was that it would somehow kill those plans off. “Obamacare may be fatal for your HSA,” warned the Heritage Foundation on 2010. “Health Savings Accounts Under Attack” blared Red State.
When Republicans were forced to come up with alternatives for Obamacare, high-deductible plans were core to those proposals. “Conservatives have suggested deregulating Obamacare’s exchanges to make it easier to provide policies with high deductibles,” wrote Ramesh Ponnuru….This always baffled Obamacare’s supporters. “The minimal, or bronze, insurance option allows out-of-pocket spending of up to $12,500 for a family of four,” wrote Jonathan Cohn. “Those are some pretty high deductibles!”
Now that those high deductibles are here, Republicans have decided that they are, if anything, too high. Just one more broken promise.
I don’t want to pretend to some kind of faux naivete here. It’s obvious what’s going on: there are lots of things that are unpopular about health care, and Republicans are trying to blame them all on Obamacare. If I were in their shoes, I’d do the same. I’d complain that restrictions were too tight and that costs were too high. I’d complain that old plans with high deductibles were being canceled and that new plans with lower deductibles were still too high. Etc.
That’s politics for you. But make no mistake: Republicans have spent years claiming that their preferred health care solution involves a combination of high-deductible health plans and tax-free HSAs. The idea is that your HDHP handles catastrophic illnesses, while the money you use for routine medical care isn’t taxed, which puts it on a par with employer health care.
But their idea of “high deductible” has always been on the order of a few thousand dollars. A bronze plan under Obamacare typically has a deductible of $5,000 or more ($10,000 or more for a family). And while Obamacare doesn’t feature tax-free HSAs, it does feature annual premiums with much of the cost offset via tax credits. Conservatives will never admit this (and maybe not liberals either), but the end results aren’t really all that dissimilar.1
In any case, there’s never any free lunch. If you want a better health plan, you’ll have to pay more. You can complain about narrow networks or you can complain about cost. You can complain about high deductibles or you can complain about cost. You can complain about tighter coverage requirements or you can complain about cost. But you really can’t complain about both.
1Obamacare also features community rating and an individual mandate, in addition to a bunch of miscellaneous new regulations for minimum coverage. Those are big deals, and I don’t want to make it seem as if Obamacare and HDHP/HSA plans are pretty much the same. However, in terms of deductibles and tax advantages, they aren’t that different, especially compared to conservative plans that also feature low-income subsidies and individual mandates of some kind.