The Republicans have answered President Trump’s call for Congress to
“repeal and replace Obamacare with reforms that expand choice, increase access, lower costs, and at the same time, provide better Healthcare”
with the budget reconciliation bill called the American Health Care Act (AHCA). Publicly released for the first time on March 6, 2017, the House of Representatives has been trying to speed passage of this bill through several committees even before the Congressional Budget Office (CBO) could draft its nonpartisan analysis of projected costs for the bill. Why the rush? The Republicans do not want to give the American people time to absorb the full implications of the bill and discover that this bill might not deliver the promised improvements given above. They hope that the bill will quickly pass through the Republican-controlled House and Senate.
Under the budget reconciliation process the Republicans have chosen to follow, the American Health Care Act (AHCA) must adhere to certain rules; namely, it cannot increase the federal budget deficit and all parts of it must “directly” affect the federal budget (no tacking on of extras).
American Health Care Act (AHCA) Funding
The Republicans’ American Health Care Act repeals all of the Obamacare (PPACA) revenues (various taxes/fees) and puts a halt to Medicare Cost Reduction measures. It therefore must make up for the federal budget increase this creates. They can reduce health insurance subsidies and cost sharing, reduce the total number of people in the program, and/or find new revenue/cost reduction alternatives.
The Republicans’ chosen budget-balancing path for the AHCA was to zero in on cost reductions affecting the poorest Americans. The AHCA reduces Health Insurance Exchange insurance premium subsidies for Americans making up to 400% of the poverty level and eliminates cost-sharing (i.e., increases out-of-pocket health spending). According to the analysis by the Congressional Budget Office (CBO), a 64 year old American with an income of $26,500 per year would be charged five times the rate that a 21 year old would be charged (under Obamacare (PPACA) it is limited to three times) and would end of paying $14,600 per year in insurance premiums versus $1700 under Obamacare (PPACA) with increased cost-sharing on top of it. The AHCA also makes major cuts to Medicaid, our nation’s healthcare program for the poorest of the poor. As you can see in the figure above, the Republicans’ AHCA takes from the poor to be able to enrich the rich.
What will happen to these poorest Americans when they lose health insurance coverage because they cannot afford the higher costs for insurance premiums and/or for healthcare services? Remember in the American healthcare system “No Money Means No Healthcare (except in a hospital emergency room)”.
The Republicans want Americans to think that Medicaid is ripe for cost-cutting and only serves undeserving, lazy Americans. Medicaid is in fact a lean program that costs substantially less than private insurance to cover people of similar health status. It serves as a safety net for people who have lost their jobs or, in the case of the elderly and disabled, for longer term health needs. In 2015, Medicaid served 97 million Americans–33 million children, 27 million adults (mostly in low-income working families), 6 million elderly, and 10 million persons with disabilities. Medicaid covers more than 60% of all nursing home residents and also reimburses certain hospitals for the uncompensated costs they incur when they care for low-income uninsured patients.The estimated reduction of $880 billion in federal outlays for Medicaid (2017-2026) under the AHCA would have to be made up by individual states (increased state taxes) or from reduced benefits.
What does the American Health Care Act Deliver?
Not only does the American Health Care Act (AHCA) deliver “inferior” health care when compared to Obamacare (PPACA), it does nothing to improve the quality and affordability of health care beyond Obamacare. It contains no cost cutting measures and puts in jeopardy Obamacare (PPACA) cost cutting measures already in place. When the Republicans bandy about the word “choice”, they mean choice of health insurance companies and not choice of doctors. In our present private, for-profit healthcare system, a large choice of doctors is only found under the traditional Medicare program. As I have said in my earlier blog post, if an American cannot afford to pay for health insurance or cost-share, the promise of health insurance company choice is meaningless.
According to the Congressional Budget Office analysis, the AHCA would increase the number of uninsured Americans by reducing the number of Medicaid and Health Insurance Marketplace enrollees under Obamacare (PPACA). Instead of providing “insurance for everybody”, the CBO estimates that the number of uninsured will increase by 14 million in 2018 and more as time goes on. In summary, when the AHCA is compared to Obamacare (PPACA), it falls woefully short.
Does this bill “repeal” Obamacare (PPACA)? While the AHCA is not a full repeal bill, it still serves to dismantle key funding aspects of Obamacare (PPACA) thus robbing the bill of the revenue needed to fund the Medicaid Expansion and the Health Insurance Marketplace subsidies for people making less than 400% of the poverty level.
Why are the Republicans bulldozing a repeal effort without a “better” replacement for Obamacare (PPACA) on hand? Obviously, the repeal of Obamacare (PPACA) is more important to the Republicans in Congress than is leaving many Americans, specifically the poorest of the poor, worse off. The Americans who become uninsured because of this Republicans’ plan will still need health care, but the federal government will no longer be funding it. Who will pay for this health care—the individual states, churches, or will the poor simply do without and silently suffer?
I do not think that the Republicans ever had any intention of delivering a “better” healthcare plan—this was merely a promise made to get votes during the last election. Under our present private healthcare system, a “better” healthcare plan would cost MORE money and this was never part of the Republican agenda. The Republicans also have no intention of introducing the lower cost “Medicare For All” type healthcare plan (single payer and universal) for all Americans. The AHCA is simply the first phase of the overall Republican political agenda for undoing our federal government’s responsibility and commitment to the health care of its people.
Summary of American Health Care Act
The American Health Care Act is a “Repeal Obamacare (PPACA)” bill and not a “better replacement” for it. It does not include any affordability improvements and will leave many low income Americans without health insurance coverage. This bill gives money to the richest Americans and to companies that profit from health spending at the expense of the poorest Americans.
The AHCA is simply the first phase of the overall Republican political agenda for undoing our federal government’s responsibility and commitment to the health care of its people.
It is important that individual Americans make clear to their elected officials that repeal without replacement with a better healthcare plan is unacceptable. We should stop focusing our attention on the blind desire to “repeal” Obamacare (PPACA) and start paying attention to what healthcare mess we will end up with as the Republicans destroy Obamacare (PPACA) piece by piece. You may be healthy today but the laws being created today will impact you when you do eventually need health care.
Destroy Obamacare–The Republican Mission, January 9, 2017
Republican Reform After Obamacare (PPACA), January 13, 2017
BB’s Guide to Understanding the Obamacare Repeal Process, January 31, 2017
Obamacare Funding and What Repeal Will Cost Americans, January 24, 2017