Since the end of January, the Republicans have been in a big rush to pass a bill that would repeal Obamacare (PPACA). The Republicans had to withdraw the American Health Care Act on March 24th when they didn’t have the votes for passage from both conservative and moderate wings of their party. On April 20th, an amended American Health Care Act (AHCA) surfaced that was carefully tweaked to secure votes from both conservative (Freedom Caucus) and moderate Republicans alike. The amendment, called the MacArthur Amendment (after its author, Representative Tom MacArthur, R-NJ), put in many of the Obamacare (PPACA) healthcare guarantees and rights that Americans are demanding and, therefore, moderate Republicans up for reelection in 2018 needed to deliver.
The amended American Health Care Act guarantees coverage that provides Essential Health Benefits (EHBs), guarantees affordable coverage to all applicants even for those with preexisting conditions, and parental insurance plan coverage for children up to age 26, but with a very important back door clause. Unlike Obamacare (PPACA) guarantees, the amended American Health Care Act guarantees can be undone through individual state “waivers” that “encourage fair health insurance premiums”. The amendment does not deliver a repackaged Obamacare, it simply redirects the blame of taking away Obamacare healthcare rights and guarantees onto individual states. Starving the states of federal healthcare dollars through reductions to the Medicaid program will speed up the process.
Let’s see how the individual states will become the Republican Congress’s “hatchet men” in more detail.
Waivers To “Encourage Fair Health Insurance Premiums”
The amended American Health Care Act allows individual states to chip away at Obamacare healthcare rights and guarantees through waivers that will “encourage fair health insurance premiums”. Specifically, these waivers allow health insurers to provide plans with fewer benefits than are currently spelled out in state-mandated benchmark health plans covering Essential Health Benefits and delivering a minimum actuarial value. Actuarial value is a measure of how much of the health spending can be dumped onto the patient. The phrase “encourage fair health insurance premiums” has a lot in common with the phrase “usual, customary and reasonable“–both allow those who benefit financially to easily manipulate the outcome to their advantage and both put the consumers on the losing end.
One doesn’t need a crystal ball to see how this process will work and who will be the driver for the erosion of Obamacare healthcare guarantees. The process is driven by health insurance companies and their need for maximum profits. Insurance companies have long complained that premiums are too high simply because (1) they have to include all of Obamacare’s Essential Health Benefits at a minimum actuarial value and (2) they have to take all applicants without being able to charge more for people with pre-existing conditions or who are older. The amended American Health Care Act resolves all these complaints and shows that the Republicans have further aligned their agenda with the financial interests of private health insurance companies. Before the amendment, the American Health Care Act had already thrown extra money at the health insurance companies in the form of higher premiums for older, pre-Medicare adults, The amendment completes the process of enriching the health insurance companies at the expense of individual Americans.
Health insurance companies want young and healthy people in their plans. The young and the healthy are preferred beneficiaries because they pay premiums and use few expensive health services. These people are good for profits. The insurance companies will say they want to provide health insurance plans with health benefits below those defined in Obamacare (PPACA) so they can deliver “fair health insurance premiums” for the young and healthy. The insurance companies will argue that it isn’t fair to make the young and healthy pay for people who are sickly.
Health insurance companies will stop selling comprehensive (Obamacare-type insurance) plans that appeal to sick people (and those with pre-existing conditions) and states will then have to isolate these people into high risk pools. The amended Health Care Act will encourage for-profit health insurance companies to write only a la carte insurance policies because comprehensive policies will attract the old and sick—a group that eats into company profits. The end result will be that people who use health services the most (the disabled, people with pre-existing conditions, and older Americans) will have to shoulder more of the cost than they are currently paying under Obamacare (PPACA). The amended American Health Care Act allows the insurance companies to manipulate insurance plan risk pools for their financial benefit at the expense of Americans who use health services more than others.
States’ Response to the Amended American Health Care Act?
Many individual states, especially those that do have history of being skimpy on healthcare benefits for its citizens (e.g., states that chose not to expand Medicaid) will have no problem acting as the federal government’s “hatchet men” to undo Obamacare’s healthcare rights and guarantees. In addition, other states that rank high in state health system performance will be pressured to reduce healthcare rights and guarantees when they are starved of federal healthcare dollars under the other provisions in the American Health Care Act. States presently receive generous federal funding to pay for the care provided to the poor, the disabled, and the elderly poor in nursing homes. Health insurance company lobbying efforts (along with political contributions) will complete the process, Individual Americans will ride this slippery slope to reduced benefits and higher costs (for those with enough resources to still afford to get health care).
Amended American Health Care Act Divides Americans
The amended American Health Care Act will divide Americans into two separate risk pools–those for the sick and those for the healthy. The young and the healthy will be encouraged to throw the elderly and the sick aside into high risk pools that concentrate spending to the few and enrich insurance companies in the process. The concept of sharing insurance risk (and cost) with all Americans will be pushed to the side and demonized through political healthcare propaganda. People will be encouraged to reject paying for health services like maternity benefits or mental health services that they will never use. Instead of working for the delivery of cost-effective healthcare (as Obamacare did), the amended American Health Care Act simply shifts costs to the sick, the poor, the disabled, and the elderly poor. The amended American Health Care Act brings slightly improved affordability to one group of Americans at the expense of others and turns the concept of “shared risk” for all Americans into divided groups for profit maximization and the furthering of a Republican agenda.
Time to Throw the American Health Care Act in the Trash
The problems with the American Health Care Act are fundamental. This bill is incapable of providing healthcare benefits that are superior to those provided by Obamacare (PPACA). Amending this bill to make it “better” is simply trying to make a silk purse out of a sow’s ear–it can’t be done. In fact, the amended American Health Care Act has never been about delivering quality, affordable health care for the American people. It is about forwarding a political party agenda that put the interests of private businesses that derive income and profits from health spending ahead of the interests of the American people. It is simply the tool to repeal Obamacare (PPACA). Rich Americans and businesses that earn income and profits from health spending are the largest beneficiaries of the Republican bill.
While many other solutions for reducing health insurance premiums exist, most try to reduce healthcare costs directly and could jeopardize the profitable place health insurance companies hold in our present healthcare system. Many of these solutions for reducing healthcare costs can be found in single payer systems like Medicare-For-All but private insurance companies would be big losers if such a system ever became a reality. From the private insurance company’s perspective, only problems in the current healthcare system that limit their profits need to be addressed.
The amended American Health Care Act is a prime example of “follow the money” legislation and the money is coming directly from the health insurance industry.
Many people think that employer-sponsored health insurance plans will not be affected by the amended American Health Care Act. They would be wrong. Employers who were forced to provide Obamacare health insurance coverage for their employees will be given the opportunity to reduce health benefits and guarantees once the “waiver” door is opened.
I would strongly recommend the Republicans abandon the American Health Care Act altogether and take a more measured approach to healthcare reform rather than one that simply serves to give President Trump a check mark in the win column. Americans should contact their elected officials to encourage them not to vote for this bill.
Two choices I would recommend to bring affordable, quality healthcare reform include the following: (1) improve upon Obamacare (PPACA) or (2) go to a single payer healthcare system (like Medicare-For-All). Either will give President Trump the promised “much better healthcare plan at much less money.”