Tom MacArthur Navigates the Economic Scylla of ObamaCare and the Political Charybdis of TrumpCare


As the United States Senate approaches a date with destiny on healthcare, Representative Tom MacArthur, Republican representing New Jersey’s Third Congressional District is in the spotlight once again. In this regard, he finds himself poised to navigate between the economic Scylla of ObamaCare and the political Charybdis of any TrumpCare legislation that passes the Senate.

ObamaCare is collapsing of its own weight. It is based on Rube Goldberg economics that relies on young newcomers to the workforce being willing to pay higher premiums to subsidize the cost of coverage for older policy holders and those of any age who have preexisting conditions.

The cost of these premiums is high for young newcomers and artificially low for the elderly and people with preexisting conditions because of the concept of “community rating” incorporated by ObamaCare into private insurance policies.

Under “community rating,” health insurance providers must offer policies within a given territory at the same price to all persons without medical underwriting, regardless of their health status. Young people not covered by corporate policies have in many cases decided not to purchase ObamaCare coverage but instead pay the cheaper tax penalties mandated by the law.

According, throughout the nation, insurance companies offering ObamaCare coverage find themselves with huge losses due to risk pools over weighted with older and sicker policyholders and an insufficient number of young healthy customers. They are withdrawing from the exchanges, endangering the future of the system.

In addition, for the working poor, ObamaCare increased the number of insured by a combination of the expansion of Medicaid and premium subsidies. The cost of these items constitutes an ever-increasing share of the federal budget. TrumpCare, as passed by the House, reduced Medicaid grants to the states by capping how much states would be reimbursed for enrollees.

TrumpCare also changed the formula for premium subsidies. Under ObamaCare, subsidies were based upon a combination of income, local cost, and age. Under TrumpCare, the subsidies would be based on age alone, to be phased out for people with annual incomes exceeding $75,000.

As for the preexisting conditions issue, enter Tom MacArthur.

In April, MacArthur sponsored an amendment to TrumpCare that allowed states to apply for waivers on the community rating mandate. It was incorrectly described in the media as a waiver of the preexisting conditions mandate. If states received this waiver, they could place individuals with preexisting conditions into a high risk pool, which could result in higher premiums for such individuals. MacArthur also placed in the amendment a provision that states would have such waivers denied or revoked if the effect was to decrease the number of insured.

MacArthur also was a defender of the change in the Medicaid assistance to states. He noted that while states would receive less assistance, they would have more discretion in structuring aid to recipients.

I arranged for an interview of Tom MacArthur in April. I anticipated that because of my status as an anti-Trump Republican and his as a Trump ally, the interview would not go well. Instead, I was most impressed by him.

There are three aspects of Tom MacArthur that are remarkable and undeniable.

First, he is an individual of enormous personal and political courage and integrity. He displayed this most notably in his town meetings with hostile constituents.

Second, he is a virtual encyclopedia of health care financing issues. His experience as an insurance executive and as a public official gives him an expertise in this area second to none.

Third, Tom MacArthur genuinely wants to expand affordable health insurance coverage to more Americans in a way that is economically sensible and not deleterious to the fiscal future of the Federal and state governments. On this, however, he faces a seemingly insurmountable political obstacle.

ObamaCare, as noted above, created a vast pool of healthcare benefits with no sensible means of funding them. In essence, it created an entitlement program with no rational financing mechanism. The late Nobel prize winning economist Milton Friedman often used the phrase, “There’s no such thing as a free lunch” in referring to government programs that could not be funded without enormous public debt or taxation consequences. ObamaCare is the quintessential governmental free lunch gone wild.

Yet the political cost of eliminating any government entitlement is prohibitive. It is the hornbook law of politics: You cannot play a role in reducing or eliminating an entitlement without losing the next election.

My belief is that the Democratic proponents of ObamaCare have a not-so-hidden agenda. They know that the only way of saving the entitlements of ObamaCare is to establish a “single payer” health care financing system.

Single payer has resulted in a decline of health care access and quality in every nation where it has been tried. Tom MacArthur is well aware of this, and in playing a major role in crafting the House version of TrumpCare, he has boldly endeavored to create a system of maximum economic and fiscal sensibility without his fellow Republicans paying a prohibitive political cost.

Such a task is indeed daunting. It is made more politically difficult by MacArthur’s friend, Donald Trump, who last week denounced TrumpCare, as passed by the House, as “mean” – less than two months after he hailed its passage on the White House lawn.

The Senate now is considering its own amendments to the bill. It is not clear if Senate Republican Leader Mitch McConnell will be able to muster the votes for passage. If he does, the bill will come up for conference and concurrence with the House. Tom MacArthur will play a most key role in this regard.

As a political writer, I could not help but ask MacArthur what effect his role in TrumpCare may have on his own political prospects. New Jersey is a state with major reliance on Medicaid. Opponents of TrumpCare assert that its Medicaid assistance cap will result in an increase in the uninsured, resulting in a deluge of patients utilizing New Jersey hospital emergency rooms and a severe additional burden on Charity Care.

Tom MacArthur has been the subject of intense discussion as a candidate for governor in 2021, due to his financial wealth, communication skills, and policy acumen. He is likely to survive without difficulty any challenge to his Congressional reelection in 2018.

When I asked Tom MacArthur what impact his involvement with TrumpCare would have on his gubernatorial chances in 2021, he answered succinctly, as one would expect, “I don’t know, and I don’t care.” Except in the case of Tom MacArthur, I believe him. He is a Congressman with that unique combination of courage and integrity.

One more thing, an “insider” observation, since this is, after all, InsiderNJ!

Chris Russell is the political consultant to both Tom MacArthur and Jack Ciattarelli, the two leading 2021 GOP prospects for governor if Kim Guadagno loses this November. This is truly an embarrassment of riches for Chris. As my readers know, I love to make boxing analogies, and for Chris, this is like being the trainer of both the two great middleweights, Jake LaMotta and Sugar Ray Robinson before their Valentine’s Day 1951 Chicago Stadium classic title bout!

Alan J. Steinberg served as Regional Administrator of Region 2 EPA during the administration of former President George W. Bush and as Executive Director of the New Jersey Meadowlands Commission under former New Jersey Governor Christie Whitman.

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