Politics

The Internet Thinks Paul Ryan Doesn't Know How Insurance Works

Days after House Republicans released their plan for repealing and replacing the Affordable Care Act, also known as Obamacare, House Speaker Paul Ryan presented a slideshow explaining the GOP’s proposed changes.

Paul Ryan

“The fatal conceit of Obamacare,” Ryan said in his press briefing, “is that young and healthy people are going to go into the market and pay for the older, sicker people.”

However, Twitter users quickly responded, claiming Ryan appeared to have a fundamental misunderstanding of insurance itself.

The responses had a consistent theme.

 

“Insurance,” according to the Insurance Institute of Michigan, “ basically involves a group of people agreeing to share risks.”

Younger people without pre-existing conditions pay for health insurance policies because they might get sick. Insurance companies pool money from all policyholders and use it to pay claims. For anyone with insurance, this system minimizes the financial risk of medical bills, expensive prescriptions, and other high health-related costs.

 

Though many were quick to call out Ryan, Washington Post writer Philip Bump claimed that some might have misinterpreted the Speaker’s statement.

In other words, Bump explains, the House Speaker is not misunderstanding the “core value” of insurance. The “ fatal conceit” or problem Ryan describes is not that healthy people must pay for sick people. “It’s that the Obamacare system isn’t yielding enough money from the healthy to pay for the sick,” Bump writes. “Whether you agree that the economics aren’t playing out, you can see how that’s the point he’s trying to make.”

Under the Affordable Care Act, insurance coverage was extended to 20 million people.

According to Linda Blumberg, a senior fellow in the Health Policy Center at the nonpartisan Urban Institute, the “fundamental conundrum” of health care policy is that Republicans and Democrats disagree on who should bear the burden of financing this coverage.

In 2013, the US Department of Health and Human Services reported the total cost of health care expenses in 2010 was $1.263 trillion. But these costs were accrued by a small percent of people. For example, only 10 percent of Americans accounted for 65.6 percent of money spent that year.

“Republicans,” Blumberg wrote for the Health Affairs Blog, “generally advocate more individual responsibility,” while Democrats want costs shared “across the broader population.” This is most likely why the GOP’s new American Health Care Act, as Ryan explains in his presentation, will eliminate the mandates requiring insurance coverage in favor of “continuous coverage” rules. This means people who go years without coverage pay a fine when they sign up again. Some argue that continuous coverage will only encourage healthy people to remain uninsured until they are sick.

But Ryan’s statements are not the only reason for viral backlash against the AHCA. In addition to eliminating the coverage mandate, the plan would radically effect Medicaid, particularly regarding abortion. " Most experts agree that it will reduce health insurance coverage and increase household costs," wrote Laudan Aron for New Scientist. "The only questions are where, for whom and by how much."