August 3, 2018
To receive Newt’s weekly newsletters, click here.
The U.S. economy has been growing and breaking records ever since President Trump first took office and Republicans took control of Congress.
Many in the GOP are hoping this success will help them get re-elected in November. Some consultants I’ve spoken with seem to think it will inoculate Republican candidates against most all Democratic attacks.
They are mostly right, except for one area – health care.
No doubt, Republicans should be proud of the enormous success of the economy. But the economy won’t reach its full potential and the GOP will not win big in the 2018 elections unless Republicans deal with the cost of health care in America.
The reason is simple:
Health care represents nearly one-fifth of our country’s economy and is the largest driver of government spending. It is also such a huge slice of household budgets that many Americans don’t end up feeling the benefits of the 4.1 percent growth in gross domestic product (GDP). In 2016, individual health care costs amounted to $10,328 per person (in 1960, that figure was $146).
As Dave Winston and Myra Miller at The Winston Group have noted, with nearly half of Americans saying they are living paycheck-to-paycheck (with no reserves for emergencies) it is hard for people to “feel the prosperity” implicit in a remarkably strong macroeconomy. Their individual micro-economies are too deeply impacted by the cost of health care.
Additionally, health care costs are out-pacing income growth because businesses have had to eschew raises and promotions to afford more and more health care costs. According to a 2017 report by the Kaiser Family Foundation and the Health Research & Education Trust and federal income data, “premiums for an employer-provided family insurance plan have climbed 19 percent, while worker pay increased 12 percent.” The additional money Americans are receiving in their paycheck from the Tax Cut and Jobs Act helps, but lowering health care costs still needs to be a priority.
Fortunately for Republicans – and for the country – we now have leadership capable of developing a serious strategy for a dramatically improved health care system. Secretary of Health and Human Services Alex Azar has the knowledge and the experience to help shape a new, profoundly better health system for all Americans.
Secretary Azar’s move this week to widen access to less expensive, short-duration health insurance plans was a step in the right direction. These plans will give Americans more options to buy the level of insurance they need for themselves – rather than being forced to buy more expensive coverage they don’t necessarily need.
President Trump’s earlier announced plan for reducing prescription drug prices will also be a huge help for families, and the Administration’s support for the expansion of association health plans will provide more options for small businesses and self-employed individuals.
So, while there is still more work to be done, Republicans can point to positive steps that have been taken and progress that has been made — but they can’t shy away from talking about health care.
This reality of half the nation operating on the margin is what drives support for government-run health care, which is now sweeping large parts of the Democratic Party. If Republicans refuse to articulate a better solution, a large portion of the American people will decide that government bureaucracy is better than constant economic anxiety about unknowable, increasing health costs.
As I have written before, if the Left wins on health care and puts in place a single-payer system, it would be a disaster.
So, to truly win the economic argument, Republicans must think through and win the health care argument. The dynamics of the fall campaign give them no choice. The Democrats’ government-run health care system will fill the gap left by the absence of a serious Republican alternative.
There is a long tradition of Republicans trying to avoid health issues. Consultants assert “it isn’t our topic.” Incumbents find it hard to communicate a clear policy or plan for improving the health system. “Repeal and Replace” was largely about repeal because Republicans lacked a coherent plan to replace Obamacare. This is why it failed.
A Republican Party that hides from the challenge of modernizing the health system is a party which has conceded a huge part of the political playing field to the Left.
Conversely, a Republican Party that can explain common sense improvements that will empower Americans to have longer lives, better health, greater convenience, more choices, and lower costs in health care is a party that can easily demolish the Left’s arguments.
This is the moral and economic necessity of 2018.
Sign up for Newt’s free weekly newsletters here: