Republicans celebrating AHCA vote at WH

Just a few short weeks ago, a coterie of Republicans, led by President Trump, Speaker Ryan, Freedom Caucus Chair Meadows, and selected (mostly men) friends threw themselves a victory party in the Rose Garden. They had managed to squeak out passage of an amended version of the AHCA, the earlier version having been withdrawn because of a devastating Congressional Budget Office Cost Estimate report that showed that 24 million people would lose their health insurance coverage while rich people would benefit from significant tax cuts.

The Republicans rushed the vote through without waiting for the results of a rescoring of the amended version. Since the amendments made an already bad bill even worse if the goal was to provide health insurance protections to Americans, it was probably the right strategy. The cynics amongst us were not surprised that they had to get this stinker out of the House before the new CBO analysis could be completed.

Well, the report was released yesterday and, as expected, the results are just as bad as the original. Here are the highlights:

  • In 2018, 14 million more people will be uninsured compared to coverage under the ACA. That number will reach 23 million in 2026. That means that there will be an estimated total of 51 million uninsured people by then compared to 28 million under the current law.
  • The impact of this loss of coverage disproportionately hits low-income people primarily because of the massive $834 billion cut to Medicaid, the safety net insurer for the poor.
CBO Report uninsured graph
From 5/24/17 CBO Cost Estimate Report
  • The report states that “about one-sixth of the population resides in states that would obtain waivers involving both the EHBs and community rating…” That means that waiver states could decide what is and what is not an Essential Health Benefit (EHB). The report points out that benefits likely to be excluded include maternity care, mental health and substance abuse benefits, and rehabilitative and habilitative (covers important services for children with autism) services. So you may be able to buy a cheaper policy without those benefits, but if you need them, you will pay “rack rate” out-of-pocket without the benefit of discounts negotiated by an insurer. Eliminating community rating means that people with pre-existing conditions could be charged more and even be priced out of the market.
  • Even if you live in a state that is unlikely to request a waiver, such as California, although there could be a 4% decrease in premiums by 2026, premiums would vary by age with young people paying less and older people paying much more.
  • As noted above, Medicaid would be slashed by $834 billion.
  • Repeal or delay of taxes on high-income people, fees on device manufacturers, as well as changes to some other taxes, would result in $664 billion in savings. Overall, the impact on the budget deficit is significantly less than the original version of the bill.

Despite predicting that the CBO score for the bill would be greatly improved after the amendments were added, Mark Meadows, Chair of the Freedom Caucus that was instrumental in ramming the bill through the House, reportedly was surprised when reporters showed him the section of the report that related to waiver states’ impact on people with pre-existing conditions. He is said to have became emotional as he related his personal story: His sister died of breast cancer and his father of lung cancer.

“If anybody is sensitive to preexisting conditions, it’s me. I’m not going to make a political decision today that affects somebody’s sister or father because I wouldn’t do it to myself.”

Evidently, he is now open to changes to the bill that would “properly fund high-risk pools to protect people with preexisting conditions.” That’s good, but we already know that almost all high-risk pools fail because they are very expensive. Makes sense, right? You put the sickest of the sick, the most costly patients, into one pool and what do you think will happen? Premiums will soar. Almost every prior attempt at managing high-risk pools has led to extremely high costs, limitations in the size of the pool, and long wait times for people to get into one. It is simply a failed policy.

To think that a small group of men can cook up a viable healthcare proposal without public hearings and advice from experts is ludicrous and bound to come up with exactly the type of results they just got. Instead of wasting more time and resources on trying to Repeal and Replace Obamacare, the Republicans should make needed changes to Obamacare and then rebrand it as Trumpcare, or Ryan Care, or whatever other name makes them happy…Hey, Mark, how about “Freedom Care?”

Obamacare is not in a death spiral, the Republicans have tried to kill it by messing with the risk corridor protections built into the ACA and, more recently, by Trump’s refusal to guarantee insurers that they will receive payments for the cost-sharing subsidies that they are required to fund (CSR).

Stop it and Obamacare will improve. Fix the flaws in the ACA that we have known about for some time (but couldn’t fix for fear of repeal) and Obamacare will improve still more. Continue to tweak the program over time as we have done with every other big healthcare program, such as Medicare, and it will get better and better.

I predict this is going to be a rough couple of months for the Republicans when it comes to healthcare. They may come to wish they had never touched this most high voltage of all third rails of politics because, after all, President Trump was right when he said,

“Nobody knew healthcare could be so complicated”

Except some of us did.

Good luck, boys.

1 COMMENT

  1. First off, you have to start with truthful definitions. Insurance is an effort to protect against future unknown events. Welfare is the taxpayer paying for those unable to pay. Two entirely different activities. Medical insurance works when actuaries determine insurance rates based on numerous existing factors for predetermined pool of customers. Obviously, a pre-existing condition will raise the necessary rate that customer would have to pay. If they can’t afford the premium, Medicaid can assist. In any case, there has to be an honest base line, which can only be established by free markets for insurance rates. Then there is the question of costs. Since government intervention has totally rigged the market for all medical expenses, costs do not property convey the necessary information for people to make informed decisions. In short, government cost manipulations are catastrophic. Until honesty in the medical markets is restored and stealing by obfuscation revealed and eliminated, the health care system in the US will only degenerate further. So sad.

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