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Message to GOP on health care is loud and clear

  • The CBO report found that 23 million Americans could lose their health insurance as a result of the AHCA.
  • The report is actually a gift to the confused GOP.
  • Now Republicans must see that they have to focus on simplicity and speed to fix their health bill.
Protesters stage a 'die-in' before a town hall meeting with US Representative Tom MacArthur (R-NJ) in Willingboro, New Jersey on May 10, 2017. MacArthur wrote the amendment to the American Health Care Act that revived the failed bill, delivering a legislative victory for US President Donald Trump.
Domonick Reuter | AFP | Getty Images
Protesters stage a 'die-in' before a town hall meeting with US Representative Tom MacArthur (R-NJ) in Willingboro, New Jersey on May 10, 2017. MacArthur wrote the amendment to the American Health Care Act that revived the failed bill, delivering a legislative victory for US President Donald Trump.

No one can be blamed for thinking the GOP is in big trouble after the new Congressional Budget Office report came out Wednesday with the politically ruinous news that the Republican's AHCA bill would eventually leave 23 million Americans without health insurance.

The good news is the report is a gift to a confused GOP that just got the message: The American people need two simple things—lower health insurance prices and a reasonable guarantee that they won't lose their coverage. And they need it fast.

Everything else (like declaring mission accomplished on an Obamacare repeal that never really happened) is meaningless politics.

As the Senate works on marking up the House Obamacare replacement bill, the CBO report has made it clear that there are only three things GOP Senators need to focus on:

1) Flood the market with as many kinds of health insurance plans as possible

Most Republicans have been correct in pointing out that the Obamacare "essential benefits" requirements for every health insurance plan jacked up premium costs for everyone. We can reduce a big chunk of the 23 million uninsured individuals if those people have a large number of newer and cheaper insurance plans to choose from.

The existing AHCA barely begins to loosen those requirements and adds the bureaucratic insult of making each state apply for waivers to offer these stripped down plans. That isn't simple and it isn't fast. If the GOP Senators aren't taking Wednesday's news as the final proof that they need to dump this waiver process and flood the country with as many possible plans to buy as possible, then they never will.

2) Only subsidize coverage for the poorest and sickest

Obamacare makes a big deal about providing subsidies so everyone can afford some kind of health insurance. That isn't working. The insurance companies pulling out of Obamacare exchanges still can't provide plans with premiums reasonable enough to cover more expensive customers with pre-existing conditions.

Senator Ted Cruz wants to fix this by focusing the government funding on creating what he calls "robust risk pools" that contain the costs of the people who need the most frequent and expensive care. This would again provide a more simple and immediate focus to the Republican efforts as opposed to the current House bill that includes a complicated and extensive subsidy plan that makes almost all Americans eligible for some kind of handout.

3) Do something for the doctors!

The need for simplicity and speed makes it harder to lower health costs by increasing health care supply in this bill. But ultimately, increasing supply by removing regulatory barriers and via medical innovation is the only real way to lower our medical and insurance costs. For now, the easiest thing to do would be helping existing physicians stay on the job.

The fastest way to do that would be to eliminate the requirement for doctors to file electronic medical records. Doctors have been complaining about this time consuming and costly process ever since it became mandatory. The American Journal of Emergency Medicine reports that emergency room doctors alone spend a whopping 43 percent of their time acting like minimum wage earning data entry clerks instead of seeing the patients who need that urgent care.

This has to stop or the number of doctors in America will continue to erode and drive up costs and waiting times. Again, the new Republican bill can't reinvent the wheel on this, but it can include at least a temporary suspension of the electronic health records requirements for a year or so and see what changes need to be made later.

Of course, no one should mistake this or any CBO report as really accurate. Economic models are typically the least reliable scientific data out there. But CBO analyses do generate headlines that the politicians fear.

In this case, it should put a cattle prod to the Republican Senators and the White House who now decide the fate of this bill. They can't go back and they can't stay still. Washington needs to patch this deflated health insurance tire and worry about a real replacement further down the road.

Commentary by Jake Novak, CNBC.com senior columnist. Follow him on Twitter @jakejakeny.

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