Can American healthcare get any worse?

The GOP campaigned on a promise to repeal Obamacare. The Dems promised to save the program. First the GOP reneged on their promise to repeal Obamacare (even after seizing the House, Senate and Presidency), and now both parties have joined forces to remove the best part of Obamacare, and the only part of the program that was supported by Republican economists:

The Cadillac tax is one of the most important tools we have to control health care cost growth in the private sector. Repealing it will drive up health care costs while adding more than $1.2 trillion to the debt over the next two decades.”

The tax has been delayed twice. But the overwhelming vote in the House — 419 to 6, with only three Democrats opposed — increased the likelihood that it never does. Indeed, the debate on the House floor was striking, with one Democrat after another denouncing the provision as if Democrats had nothing to do with its creation.

It’s hard to overstate just how bad this news is. It suggests that both parties are completely abandoning any interest in sensible economic reforms. It suggests that the SALT caps in the 2017 tax reform may also be repealed at some point in the future. There is no appetite to reform health care, which has been one of the biggest factors limiting real wage growth for average Americans in recent decades.

I hope this can be stopped in the Senate, but given the vote margin I’m not optimistic.

And let’s not hear any more happy talk about GOP “deregulation”. If this goes through (with GOP support), then Republican promises to make America more efficient through deregulation will prove hollow.

PS. This post explains the downside of repealing the Cadillac tax.



11 Responses to “Can American healthcare get any worse?”

  1. Gravatar of E. Harding E. Harding
    18. July 2019 at 06:21

    Here is the vote:

  2. Gravatar of ssumner ssumner
    18. July 2019 at 06:31

    Imagine if we had 435 Representatives like Amash.

  3. Gravatar of E. Harding E. Harding
    18. July 2019 at 07:01

    I freely agree America would be a nicer place, despite my frequent disagreements with him. He is better than 95% of Republicans.

  4. Gravatar of E. Harding E. Harding
    18. July 2019 at 08:24

    Also, today House Democrats passed the Raise the Wage Act, which will die in the Senate:

  5. Gravatar of Matthew Waters Matthew Waters
    18. July 2019 at 09:36

    Along with the cadillac tax probably ending, it was sad to see the HHS Secretary’s proposed PBM rebate rule get scuttled. In short, PBM rebates means the insured can pay $1,000 for a drug at the register but the insurer would pay $700 on net. The insurer even gets $300 from the $1,000 spent by the insured.

    The health care system is rotten on so many levels. My state is just now debating getting rid of requiring Certificates of Need for hospitals. I remember the local NPR station talking about the bill. A hospital lobbyist compared CONs to auto dealer franchise laws. Dealer franchise laws were used as a GOOD example! I was absolutely floored by it.

  6. Gravatar of dtoh dtoh
    19. July 2019 at 06:39

    First of all, it would be helpful if you didn’t conflate healthcare with health insurance. How can you possibly expect to have an intelligent discussion on the subject when you fail to make such a fundamental and critical distinction.

    Second, the Cadillac Tax doesn’t matter anymore. Virtually all companies are eliminating Cadillac plans and moving all employees to high deductible/HSA plans. I sit on a corporate Board that has been transitioning employees for several years. Yesterday, we moved all remaining employees to high deductible plans. The union (United Steel Workers) didn’t even bat an eye. And the reason has nothing to do with Cadillac tax (which BTW was never implemented…what does it mean to repeal something which wasn’t implemented.)

    The reason people are moving to the high deductible plans is because they are better for employees and better for employers. 50% of people on corporate health insurance plans will be on high deductible plans by the end of this year or next, and the shift is accelerating. Nearly all covered employees will be on high deductible plans within 5 years.

    The Cadillac tax would have raised zero revenue and its repeal is completely irrelevant.

  7. Gravatar of P Burgos P Burgos
    19. July 2019 at 15:24

    Trump could always veto the bill! Vive L’Orange!

  8. Gravatar of Christian List Christian List
    19. July 2019 at 19:32

    Look on the bright side: Congress is finally in agreement.

    It is not surprising that such decisions are made in a democracy. The voters gift themselves.

    Your narrative and your explanations may be correct, but they are also overly complicated. In a democracy, the simple narrative is usually chosen.

    I am a little surprised, however, that the US politicians never go for the low-hanging fruits. Drug costs, for example. The exact same drugs seem to cost much less in other countries, but may not be imported. It is somewhat astonishing that there have been no changes in this area for decades. The narrative would be very simple and the advantages would be immediately obvious to voters. Nevertheless, politicians do not implement it. Is it simply corruption or what is the reason?

    Trump has often talked about it, so where are the corresponding laws by the GOP in Congress? What’s taking so long? Is there still any interest in this? Apparently not.

    Why have Clinton, Bush, Obama never pushed such laws? The political parties of the USA seem to be completely riddled with certain forms of corruption.

  9. Gravatar of Cliff Cliff
    22. July 2019 at 12:46

    Perhaps they have been convinced by pharma that to do so would mean the deaths of many thousands due to a reduction in drug R&D, and perhaps this is correct. What is the U.S> instead passed a law that no drug may be sold for more in the U.S. than elsewhere in the OECD? Lower drug prices for us, higher for them as we stop subsidizing them like with the military?

  10. Gravatar of Tom Brown Tom Brown
    23. July 2019 at 15:28

    Trump has often talked about it, so where are the corresponding laws by the GOP in Congress?

    Trump could introduce a bill couldn’t he?

  11. Gravatar of dtoh dtoh
    24. July 2019 at 19:01


    Totally agree. This is so obvious. I’d phrase it though that you can’t sell in the OECD cheaper than you sell in the U.S.

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