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Posted at 10:04 AM ET, 01/18/2011

Repeal vs. reform

By Ezra Klein

Today, the House of Representatives will begin debate on legislation repealing the Patient Protection and Affordable Care Act. That makes for a bracingly clarifying choice. America will either have a package of reforms that we've studied quite thoroughly or a status quo we know all too well. So what would a world without the health-care bill look like?

1. In 2019, there will be 32 million Americans who don't have health insurance, but would have had it under reform: There are a lot of questions about how the Affordable Care Act will work in practice, but this is the part we know for certain: Tens of millions more Americans will have health insurance. About half of the newly insured will get coverage through Medicaid, and about half will get it by purchasing subsidized private insurance on the exchanges. But they'll get it. Under the status quo, they won't. Here's the comparison, using CBO data from this report (pdf):


There are a lot of reasons to prefer being insured to being uninsured. For one thing, a sudden illness can just be that: a sudden illness. Without insurance, it's also a financial catastrophe. For another, health insurance just might save your life. So it's worth having. As you can see on the graph, even under the ACA, about 20 million people are left uninsured. Here's who they are. But Congress isn't choosing between the ACA and legislation that covers more people. They're choosing between the ACA and legislation that covers no one.

2. Over the next decade, the deficit will be $230 billion larger, and in the decades to come, it will grow much beyond that: As written, the health-care law saves money. Full stop. It cuts spending and raises taxes by a larger amount than it raises spending. Repeal, in addition to reversing the increase in coverage, would also reverse the decrease in deficits:


How does the ACA reduce deficits? You can see the breakdown of provisions -- and check the arithmetic for yourself -- here. If you want a fuller look at the question, read this CBO report.

Republicans have tried to undermine the CBO's conclusions, but their arguments don't hold water. They say, for instance, that the cost of reversing the changes the 1997 Balanced Budget Act made to Medicare's formula for paying doctors should be included in health-care reform. That's absurd on its face, but it becomes more absurd when you realize that their repeal bill does nothing about those doctor payments. In fact, the repeal bill doesn't do anything about the cost problems in the health-care system, or about the deficit. It just lets everything keep going the way it's going now.

3. The experiments in controlling costs will disappear, and we'll be back at square one. It's important to understand that there's a difference between the bill's financing provisions -- which were mentioned in the previous section -- and the bill's cost controls. The financing provisions cut spending and raise taxes to make the numbers add up. The cost controls implement reforms and change the health-care system to try to slow spending down in the future. They're more speculative than the financing provisions, but they're also more important.

For example: There's a large experiment with payment bundling, under which hospitals get a lump sum for the treatment of a particular condition, and if they're able to resolve the condition for less, they get to keep the difference. That means they can make money by saving money, which is a far cry from the current system, where they make money by persuading patients (and their insurers) to spend money.

There's the Independent Payment Advisory Board, which is an expert body empowered to make cost-saving reforms to Medicare even if Congress and the president don't sign off on them. That makes the program a lot less untouchable than it is now. There's the excise tax, which begins to tax expensive employer-based health-care plans, and in doing, gives employers and workers a big incentive to choose cheaper plans. There's a center tasked with spreading cost-saving pilot programs throughout Medicare, and there are provisions to penalize hospitals with high rates of infection. And that's just a small sampling: There are pages and pages and pages of different ideas on how to cut costs throughout the system.

Do we know, with certainty, which of these ideas will work? No. Is there an argument that they don't go far enough? Yes. But that makes it all the more important to start trying the different ideas and then building on the ones that work. As Mark McClellan, who served as George W. Bush's director of Medicare and Medicaid, has said, "this is the right direction to go."

4. The insurance market will be unchanged: Perhaps the most aggressive reforms in the ACA are to the insurance market. Insurers are no longer allowed to discriminate based on preexisting conditions. They can't take back their coverage without showing outright fraud on the customer's part, or raise premiums without explaining why. Individuals and small businesses will begin buying insurance from "exchanges" -- regulated marketplaces where insurers will have to compete transparently on cost and quality, where consumers will be able to rate insurance products (and other customers will be able to see those ratings), where small business and individuals will be able to pool their bargaining power to extract better prices, and where insurers can be kicked out for bad behavior.

Repeal the bill, and all of that disappears. There are no exchanges. The small business and individual markets remain exactly as fractured and dystopic as they are right now. Insurers can continue to turn you away or jack up your premiums for past illnesses and rescissions will continue at their current pace. The young and the healthy will avoid buying insurance till they get sick, and so their costs will continue to fall on the rest of us and premiums will continue to be unnecessarily high because the young and the healthy aren't present in the system to bring them down.

The choice Congress is debating today is not between the vision of progress in the Affordable Care Act and some other vision for how we move forward. It's the progress in the ACA or the status quo. And when you compare those two, there's no contest: Under the ACA, coverage is more universal, deficits are lower, cost control experiments are more numerous, and the insurance market is more competitive and humane than under the status quo.

By Ezra Klein  | January 18, 2011; 10:04 AM ET
Categories:  Health Reform  
Save & Share:  Send E-mail   Facebook   Twitter   Digg   Yahoo Buzz   StumbleUpon   Technorati   Google Buzz   Previous: Wonkbook: Health-care debate, round two
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To Republicans, reality is a distant land that needs to be conquered at the expense of Americans and their families.

I'm tired of Republicans. It was all a nice puppet show. Foolish elderly Republican voters actually think that Republicans are going to repeal the Heath Care Reforms and ban earmarks and bring "freedom" back.

Would you hire a confessed animal hater to run a pet store? No? Then why would you elect politicians who freely admit to despising government?

Republicans rally against regulation of industry, and then America sees how that turns out when BP spills a million barrels of oil in our seas.

Republicans will rally against gay people, stripping them of civil rights, and then you find them tapping their toes in airport bathrooms looking for their gay lovers.

Republicans will rally against non-existent communists but have no problem driving an economy with Karl Marx like spending of trillions of tax dollars on endless wars against enemies that did not attack us.

After the last ten years of watching Republicans one word stands out as defining them perfectly; hypocrite.

People in government should believe in government, and that's exactly why Democrats will get my votes for years to come.

Posted by: getcentered | January 18, 2011 10:23 AM | Report abuse

I understand that many think a Rolls Royce is a wonderful car, yet I still have no desire to use my money to purchase one for myself or for anyone else. In fact, I've firmly decided I do not want a Rolls Royce and I'm not going to buy one, no matter what.

The PPACA may be wonderful: rightly or wrongly, its proponents certainly believe it to be a wonderful achievement and have sold it as skillfully as any used car dealer might do. But if the PPACA is indeed a wonderful achievement -- and that's debatable -- it remains an achievement that I, like millions of others, simply do not want. To underscore my rejection of the PPACA, I voted and elected a representative who would do everything in his power to see that the unwanted PPACA is repealed or made palatable.

Isn't this the way our government is supposed to work? If I perceive an egregious violation of my rights, shouldn't I make my will known through the ballot box (and, if necessary, by moving from one state to another)? If a single individual -- a President -- vetoes the expressed will of The People, what's next?

I'm certainly not an evangelical, but a Biblical passage (Exodus 9:34-10:2) is applicable (as is the story of B'rer Rabbit): any government which ignores the will of The People both exposes itself to lawful retaliation and cements itself in history as an example of failed governance. Sometimes, The People -- the sovereign lords of America -- do need to say something to the effect of "Go in to [the President]; for [we] have hardened his heart and the heart of his servants, that [we] may show these signs of [ours] among them, and that you may tell in the hearing of your son and of your son's son how [we] have made sport of [those who ignored our will] and what signs [we] have done among them; that you all may know that [We The People are in charge]."

Posted by: rmgregory | January 18, 2011 10:51 AM | Report abuse

It is easy for a group of congressmen who all have excellent health care insurance for themselves and their families to vote to repeal it for others.

Because congress has such power over legislation, even if a congressperson drops the government-provided health insurance, there will be a good health insurance company willing to pick them up, no matter what. That company needs the Rep's vote on repeal.

Posted by: tinyjab40 | January 18, 2011 10:51 AM | Report abuse

Obamacare is full of financial shenanigans and Ezra and fellow travelers know it.
Ten years of income for six years of outlay. The doc fix joke where CBO was forced to factor in cuts in payments that ain't gonna happen.
Many, many others.

Posted by: spamsux1 | January 18, 2011 10:56 AM | Report abuse

"The small business and individual markets remain exactly as fractured and dystopic as they are right now." - Ezra Klein
Thanks! Mr. Klein!

The more fractured the market gets, the more profitable it is for insurance companies. We are divided and conquered even though each insurance company only has one balance sheet at the end of each quarter. We are really not fractured for the insurance company.

Most people don't seem to understand "The larger the insured pool, the less likely an extreme event can occur.", which means lower premiums for everyone in the insured pool.

Oxford University has an easy to understand webpage on insurance risk. Let's help John and Jane a bit here.

A Universal Health Care system will only have one insured pool that is the whole population. We will then be able to take advantage the optimal, minimal premium for everyone in the country. Universal Health Care will help us control spending on health care and cover everyone.

The German Universal Health Care system allows individuals to opt out of public insurance and buy private insurance, if the person makes ABOVE certain income level.

Posted by: dummy4peace | January 18, 2011 10:58 AM | Report abuse

The fact the GOP repeal bill does not include a reform replacement proves they are not serious about reform of any kind.

The best way to repeal a so-called bad law, is to at the same time offer up a better choice son as to attract more votes. Of course, this isn't happening.

Posted by: lauren2010 | January 18, 2011 11:03 AM | Report abuse

For Republicans the choice does not have to be between repeal with a return to the status quo and the Patient Protection and Affordable Care Act (a.k.a. “ObamaCare“).

The Republican plan to reform the health care system was introduced in the House in July 2009 as the much promoted “Empowering Patients First Act“, H.R. 3400. Prime sponsor was Rep. Tom Price (R - Ga.) and co-sponsors included Michelle Bachmann. Link:

Say what you might about H.R. 3400, but it was a plan and was extensive and included much on Republicans’ wish reform list and such provisions as a prohibition on health insurers rejecting applicants because of a pre-existing medical condition.

On March 22, 2010, Rep. Dan Burton, with 27 Republican co-sponsors, introduced H.R. 4910, which was to repeal ObamaCare and replace it with the Empowering Patients First Act (H.R. 3400). Link:

So why not do this again? Namely, couple repeal of ObamaCare with adoption of the Empowering Patients First Act? A cynic might say that it is because House Republicans weren’t all that serious about the Empowering Patients First Act or health care reform in the first place. A cynic, that is.

Posted by: NoelOContendere | January 18, 2011 11:10 AM | Report abuse

--*As written, the health-care law saves money. Full stop.*--

When Klein says "saves money" he means that the program looks good on the *government's* books. What he *always* doesn't mention is that the way DeathCare enhances the government's balance sheet is by stealing nearly a trillion dollars over ten years from the hard working citizenry.

DeathCare does not save people anything (except, of course, the people on the receiving end of the gov's redistribution plan). The economy as a whole will be one trillion dollars poorer.

Posted by: msoja | January 18, 2011 11:16 AM | Report abuse

The fact ObamaCare insures 33 million more people, and will save thousands of lives, and yet msoja uses invective such as "DeathCare" shows his opinions are biased and irrelevant to any serious and thoughtful discussion.

Posted by: lauren2010 | January 18, 2011 11:25 AM | Report abuse


I am glad you agree with my earlier comment.

Posted by: lauren2010 | January 18, 2011 11:29 AM | Report abuse

One Question I like to know is... How much is it costing use to repeal the bill?

Posted by: Longbowan | January 18, 2011 11:41 AM | Report abuse



With a president certain to veto any such legislation.

What absolute futile nonsense.

This one bill, is the only legislation passed which promises to create the millions of jobs desperately needed in this nation.

We have 30 million plus folks searching for work and no solutions in sight.

What planet do the people in Congress come from?

Posted by: wherehaveallthejobsgone | January 18, 2011 11:48 AM | Report abuse

It is good that the Republicans are hell-bent on repealing the health care reform act. It gives an excellent opportunity to the Democrats to educate the general public even more about what they will lose if the Republicans can get away with their pack of lies. In one sense, the forthcoming Republicans' symbolic "hara-kiri" in the House of Reps will be good for Democrats in 2012.

As a retired physician, I hope that in 2012, the Democrats will improve the law by enacting a public option without which we cannot rein in the greedy insurance and pharmaceutical industries.

Posted by: calexo | January 18, 2011 11:49 AM | Report abuse

"I understand that many think a Rolls Royce is a wonderful car, yet I still have no desire to use my money to purchase one for myself or for anyone else. In fact, I've firmly decided I do not want a Rolls Royce and I'm not going to buy one, no matter what.

The PPACA may be wonderful: rightly or wrongly, its proponents certainly believe it to be a wonderful achievement and have sold it as skillfully as any used car dealer might do. But if the PPACA is indeed a wonderful achievement -- and that's debatable -- it remains an achievement that I, like millions of others, simply do not want. To underscore my rejection of the PPACA, I voted and elected a representative who would do everything in his power to see that the unwanted PPACA is repealed or made palatable."

Well, I firmly do want a Rolls Royce. And I will vote for it. Just like I want a Rolls Royce Army, Navy, and Air Force. I'm sure some people don't want to have to be forced to pay tons of tax money for top of the line military equipment, but I do. I could try to purchase just the amount of defense for my own house I suppose (and screw others--let them get their own defense, if they want or don't want)-- boy wouldn't that be an efficient way to defend the country?

So who cares about epidemics and drags on the economy (because we all still have to pay for people without health insurance who end up in the emergency room AND then when those people die prematurely, that's one less productive member of society) magnified by people who don't have health insurance?

I'm not worried. The "majority" of people in the South preferred a slave economy at one point. But they eventually came around.

I'm no opponent to tweaking the present bill. But h-ll no to just repealing it without any alternative plan. When the Republicans actually present a coherent alternative, so that a vote can be taken to replace the current with the new, fine. But they never present a plan. They just want to repeal. Can you imagine if we said "let's first defund the entire military and then decide how to improve it!" Absolute idiocy.

Posted by: xandersun | January 18, 2011 11:58 AM | Report abuse

--*The fact ObamaCare [...] will save thousands of lives*--

You're drinking the Kool-Aid. DeathCare marks the highwater point of American healthcare. It's down into the sewer of politicized central planning from here on in. For me, the scary thing about socialized health care has never been the jobs, or the government deficit, but the over availability of health services and products, and the quality of same. Those things WILL suffer. The industry will stultify, and then decline. In the long run, thousands will die sooner than they would have with a free market (the thing that gave us the world premier health care, now under assault because of its very success.)

Posted by: msoja | January 18, 2011 1:05 PM | Report abuse

--*The fact ObamaCare [...] will save thousands of lives*--

How many lives will be saved if the DeathCare modifications to Medicaid end up bankrupting several states?

Posted by: msoja | January 18, 2011 1:56 PM | Report abuse

When saner countries were implementing national healthcare in the postwar years, American Republicans were arguing about the communist menace from water fluoridation, birth control being practiced by adolescents, and 'socialized medicine' in the form of the union-inspired 'Health Insurance Plan of New York, Inc.' (look it up!). Now our Republican friends feel that we must drive the truck at the speed-of-light backwards in order to try and avoid the proverbial cliff that awful communist countries like France, England and Canada are on trajectory for.

Unless you are a fool or an adolescent (or watch too much Fox news), you can't possibly buy the 'tea' they are drinking.

The real problem is that the Democrats like Steny Hoyer, don't know enough about healthcare to defend any effort to provide more equity, greater savings, and a deeper, participatory research and evaluation base that can improve Americans health. The Dems. don't understand (or don't want to understand) why France is #1, is racing ahead of us in transplantation and gene therapy, and better understands which treatments work, and which don't.

Most of the research I have been reading and required to read for the next Genetics Board exam was done abroad. Clinical research: In areas like deafness, heart disease, and diabetes. Not done here. Why? Because America's health system is an irrational hodgepodge patchwork quilt that gives uneven care and produces uneven results.

Can even one Dem. explain this to the Repubs.?

Or do you not have the cajones?

Posted by: bert8 | January 18, 2011 3:19 PM | Report abuse

and, of course, when democrats hold a vote on something that they know is purely symbolic (like for example votes on issues of trade inequality with china, since no one in government worries about our trade imbalances with china), the republicans say they are playing politics. But are the republicans playing politics here, since they know this 'repeal' isn't going anywhere? heavens no...

Posted by: underhill | January 18, 2011 3:24 PM | Report abuse

If you are a conservative and you don't care that health care is denied to people with pre-existing conditions (including children) nor do you want anything done about it then you deserve every despicable thing anybody can say about you. This issue isn't political. This issue is moral. I understand the argument concerning the mandate but not pre-existing conditions. The health insurance industry has maintained these death panels for far too long (which denial of coverage undisputably is).

Posted by: hateisnotafamilyvalue | January 18, 2011 3:43 PM | Report abuse

The only socialized health care in the US is the Veterans Administration. I realize that some of the propaganda from the RNC and related orgs talks about the PPACA being socialized medicine but these people either don't understand the concept or are lying.

The PPACA leaves most of the employer-based insurance intact, and really affects the individual market by finally allowing people with pre-existing conditions to buy insurance on the private market. This will save lives. The government is neither insuring nor providing care for these people.

The only strictly government element proposed during the reform debate was the public option, and the expansion of Medicare for those over 55. Neither made it into the bill, and both would have been good additions. Keeping the system so privatized adds a huge amount of inefficiency and overhead dealing with different payers who have NO incentive on paying up when they are required to. I'm in medical school currently and by far the largest complaint from doctors we train with is dealing with insurance companies.

Sorry but when I see people using these terms incorrectly, I feel the need to set the record straight. The misinformation present during the health care debate was astonishing and led to a very imperfect solution, although one better than the status quo. Here's hoping it continues to be improved.

Posted by: kmani1 | January 18, 2011 4:05 PM | Report abuse

You're comparing a waste of time, to the US Congress. Aren't they both the same thing?

Posted by: scottilla | January 18, 2011 4:09 PM | Report abuse

I wish we would stop talking about health insurance and start talking about health care. They are NOT the same thing. In addition, we live in a world of limits, health care included, so rather than continue the liberal mantra of unlimited health care and early retirement for all, could we actually have a conversation that speaks about realistic alternatives. And finally, could we not force everyone to buy a product even if they dont want it.

Posted by: bruce18 | January 18, 2011 4:21 PM | Report abuse

@bruce18: You avoidance of the health insurance issue demonstrates either ignorance or naivety. Baucas and Obama chose insurance to focus upon because they were tractable. All healthcare providers know that the insured get better care than the uninsured. Any plan that focused on universal care, it was said, was a non-starter for Baucas' committee. All Physicians believe in universal care. Some of them are even members of an organization pushing for it ( None of the plans before Congress proposed universal care. Ergo, you either do not know what you are talking about, or you are being disingenuous with us.

Everyone knows universal care is a matter of distribution of scarce resources. We all went to fine undergraduate, graduate and medical schools out here. We even understand some medical economics. It is all do-able. Look at France; look at Canada, look at Israel; Watch the Frontline on 'Sick around the World'. Learn Something. Try to stick your head somewhere that isn't filled with Republican tripe.


It's worth it. You might become a real person.

Posted by: bert8 | January 18, 2011 4:44 PM | Report abuse

--*the proverbial cliff that awful communist countries like France, England and Canada are on trajectory for*--

Each of those countries are having horrible time with their socialist health care systems. The new UK PM was in the news yesterday proclaiming, as has every PM before him, that he would bring reform to the system in crisis:

"Prime Minister David Cameron on Monday waded into terrain where past British governments have foundered, promising fundamental changes to the country's expensive and over-stressed public health care system."

Posted by: msoja | January 18, 2011 5:16 PM | Report abuse

tinyjab40 wrote: It is easy for a group of congressmen who all have excellent health care insurance for themselves and their families to vote to repeal it for others.

They have it better than you think, the Office of Attending Physician provides members of Congress with physicals and routine examinations, on-site X-rays and lab work, physical therapy and referrals to medical specialists from military hospitals and private medical practices. When specialists are needed, they are brought to the Capitol, often at no charge to members of Congress.

Members of Congress do not pay for the individual services they receive at the OAP, nor do they submit claims through their federal employee health insurance policies. Instead, as of 2009, members pay a flat, annual fee of $503 for all the care they receive. The rest of the cost of their care is paid for by federal funding, from the U.S. Navy budget. The annual fee has not changed significantly since 1992.

Posted by: wrfarm1 | January 18, 2011 5:25 PM | Report abuse

@msoja; Yes, healthcare around the world is expensive and governments are having problems paying for it. So what? That is what government is supposed to do -- provide a better life for the people who live within its domain.

@wrfarm1: Yes, Congress gets excellent healthcare. I agree with you that Congress should become part of the private system, or create a public system that works for them as well as for most of America. Yes, Congress should get the same healthcare as some other parts of the general population.

@kmani1: Yes, the VA is government sponsored healthcare. So is the healthcare provided by the military per se. The quality is pretty good: Not perfect, but pretty good. The medical research conducted there is not that good -- mainly because, unless affiliated with an academic medical center there are no dollars to pay for health research (including comparative effectiveness research), and no nationalized access to healthcare records for research purposes. Many of the awful 'socialized' countries like France and England, that msoja above would decry permit access to researchers. Ergo, those countries are racing ahead of us in knowing which treatments work, and which don't.

Boo hoo, the Republicans don't know what they are talking about and keep lying to make their points.

On another board, one poster claimed that lying is in the 'Republican DNA'.

I am a DNA expert: Lying is not in the DNA.

Posted by: bert8 | January 18, 2011 5:40 PM | Report abuse

--*That is what government is supposed to do -- provide a better life for the people who live within its domain.*--

Well, governments don't provide *anything*. All they can do is steal the fruits of people's labors and restrict freedoms. Taxes and laws are what come out of governments.

The ideal underlying the founding of the U.S. was that a minimal government would secure the blessings of individual liberty to everyone, thereby fostering *individual* initiative and responsibility as free people sought their own happiness.

The idea that the U.S. government can satisfy the pursuit of happiness for 300 million people better than those people could when left to their own devices is *insane*. The government can impose at most two or three choices on the laboring citizenry, and those done only badly.

A free people do not *want* the government providing for them. They want to live like adults, not the weak minded children that the Klein's of the world work so hard to cultivate.

Posted by: msoja | January 18, 2011 11:48 PM | Report abuse

Refinancing means taking out a new mortgage with a lower interest rate to pay off your existing mortgage, search online for 123 Mortgage Refinance I got 2.831% rate on refinance!

Posted by: elsieho123 | January 19, 2011 4:50 AM | Report abuse

Everyone wants some type of reform - we know the system is broken. Even doctors surveyed say they are fearful of the reform leading to a decline in patient care ( If physicians can't even get on board, how are we consumers (and voters) who will be stuck with the bills supposed to support it?

Posted by: sylmarino | January 20, 2011 1:01 PM | Report abuse

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