August 25, 2015
After talking about it endlessly, Republican presidential candidates are finally starting to get specific about how they intend to replace the Affordable Care Act. Wisconsin Governor Scott Walker released his plan last week. As the reaction to it shows, Republicans have to be ready with answers to a lot of hard questions.
One of the most crucial: How would they protect people with pre-existing conditions? Left to their own devices, after all, insurers have an incentive to charge higher premiums to potential customers who already have chronic health conditions -- or not to offer them coverage at all.
Obamacare simply bans such discrimination. But Republicans seeking to replace the law want to protect people with pre-existing conditions while also freeing up health-insurance markets. The vexing question is how to do so without creating bad incentives for customers. If insurers can't discriminate between the healthy and the sick, healthy people might just go without insurance until they get ill and then sign up for it at the same rate as everyone else. If all healthy people did that, only the sick would have insurance and prices would soar. That's why Obamacare combines the ban with a mandate that people buy insurance. One of the law's most popular features, in other words, is a package deal with one of its least popular.
Read the full article at Bloomberg View: One Health-Care Question Republicans Must Answer