THE REPUBLICAN’S AHCA IS A STEP BACKWARDS, BUT WHAT ELSE DID YOU EXPECT?

…This is Tom Price, the HSS Secretary that has been pushing this very poor Obamacare replacement program.

 

As expected from this Congress, the AHCA has massive tax cuts for the wealthy, and Medicaid cuts for the poor…typical GOP.

 

The American Health Care Act (AHCA) introduced in the House Energy and Commerce and Ways and Means committees, was advertised by Speaker Ryan, is the best chance bill to repeal and replace the Affordable Care Act (ACA).  But the real focus of the legislation is not even close to real health-care reform.

 

It is ridiculous that the Republican leadership is pushing for approval on this bill before the Congressional Budget Office (CBO) has published what it will cost, and how many people will be affected and to what level.  You wouldn’t agree to making a major health decision before understanding exactly what is was going to cost you and your family….? Duh!

 

What the AHCA actually will do is immediately and massively redistribute US wealth from the poorest Americans to the wealthiest.  The Democrat’s call it “Repeal & Wreck Healthcare”.

 

The AHCA repeals very little of the ACA’s ideas, because in its current form, it leaves all but three of the ACA’s 10 titles almost entirely intact.

 

It leaves untouched most of the ACA’s insurance reforms, including its bans on preexisting-conditions exclusions, health status underwriting, and lifetime and annual coverage limits.  It also leaves the requirements that the health plans cover adult children to age 26 and that the plans cover the ACA’s essential health benefits.

 

The AHCA does, of course, repeal some of the ACA’s insurance market reforms, specifically the penalties for the individual and employer mandates.

 

By 2020, it would also replace the ACA’s current income-based premium tax credits and cost-sharing reduction payments with fixed-dollar, age-adjusted tax credits, which may not offer enough funds.

 

However, most ominously, the proposed legislation would repeal virtually all of the taxes created by Congress in 2010 to finance the ACA as of 2018.

 

The ACA had imposed taxes on insurers, pharmaceutical manufacturers and medical-device manufacturers, and imposed Medicare tax surcharges on Americans earning a quarter of a million dollars a year and more. The AHCA gets rid of all of them. The Joint Committee on Taxation estimates that the new bill would cut taxes by almost $600 billion over 10 years. The Center on Budget and Policy Priorities notes that the AHCA’s repeal of Medicare taxes would give the 400 highest-earning American taxpayers a $7 million tax cut each. (That alone is a total US tax loss of $2.8 Billion.)

 

At the same time, the reform legislation cuts federal support for Medicaid, the federal/state program that for more than 50 years has provided health-care access to the poorest Americans.  (There is no input or understanding as to how many and to what extent the poor will be harmed.)

 

The AHCA cuts back federal support for the ACA’s Medicaid expansions, which have assisted millions of working Americans living near the poverty level. And it goes further, ending Medicaid as an entitlement program under which the federal government matched state expenditures and it is changed it to a per-capita program under which federal contributions would be limited, shifting program costs to the states and ultimately reducing Medicaid coverage for the poorest Americans.  To those poorer states, this will be devastating to their low income citizens.

 

The private-insurance provisions of the bills demonstrate the same tendency to shortchange the poor while enriching the rich.

 

The AHCA would end by 2020 the tax credits and cost-sharing reduction payments that the ACA offers to lower- and moderate-income enrollees. In their place, the AHCA would provide fixed-dollar, age-adjusted tax credits that are income-adjusted only insofar as they are phased out for higher-income taxpayers.  Would the fixed-dollar amounts be enough?  Based on past history, it won’t even be close.

 

An interactive map developed by the Kaiser Family Foundation shows that the bill would provide more generous assistance to younger, higher-income individuals than the ACA’s provisions did, but much less assistance to older and lower-income people.

 

This effect will be major: The AHCA allows insurers to charge older individuals five times what they charge younger individuals, but those older Americans only get tax credits twice as large as younger people.

 

Republicans have claimed they are acting to save an individual insurance market on the verge of collapse under the ACA. But the AHCA would repeal the individual mandate, the key ACA provision for stabilizing the individual market risk pool. The AHCA offers in its place a continuous-coverage requirement that would impose a 30% premium surcharge for a year on individuals who failed to maintain continuous coverage. (30% is nothing compared to a young person that is healthy and doesn’t feel they need medical insurance…..for now.)  Please note: this penalty wll discourage a healthy uninsured person from applying after a coverage lapse, but not someone in ill health who really needs insurance, and who will cost the health system much, much, more.

 

The main market-stabilization initiative in the new bill is $100 billion in grants to the states between 2018 and 2026. Whether the states will or can spend the funds wisely, and whether these billions will even be enough, is a very big open question.  (Most professional analysts say it will have a very large short fall.) 

 

 

Many of the smaller or less populated states do not have the infrastructure for dealing with all this new medical stuff. ( For a populous state such as New York or California, this is not an issue.  But for states like Alaska, Delaware, Montana, North Dakota, South Dakota, Vermont and Wyoming, that only have enough population to support one, single, US House Representative, that’s a different issue.) The Republicans are always selling their point on “state’s rights”, even if the states are not capable of managing what they are being given.  There remains a distinct possibility that the individual insurance market may yet still collapse in many of these smaller states.

 

To summarize: the AHCA offers massive tax cuts for the wealthy, significant Medicaid cuts for the poor, a reshuffling of premium-assistance tax credits to offer more help to younger, higher-income individuals and less help to the older and poorer Americans, and the “AHCA may still not save the individual insurance market”.

 

It’s a step back on every front. But what else would one expect from this conservative, GOP Congress?

 

Copyright G.Ater  2017