In March, they didn’t have the votes, and the bill was pulled. Today, they appear to have the votes, so they’re moving forward on the floor. I have both practical policy concerns about the legislation, as well as good-government procedural objections to the nature of the process — but let’s start with what is actually in the refurbished American Health Care Act:
INDIVIDUAL MARKET: The AHCA repeals Obamacare’s individual mandate tax, which requires every American to purchase a product, fining millions who won’t or cannot afford to comply. It rolls back the employer mandate, which has had negative economic impacts, including curtailing some workers’ hours. It rolls back, repeals, and delays many of Obamacare’s taxes, such as the innovation-stifling medical device tax. It undoes the current law’s subsidy system starting in 2020, replacing it with an “age-adjusted, advanceable, refundable” refundable tax credit for individuals and households, raging from $2,000 to $14,000 per year (with generosity levels phasing out for wealthier recipients). It doubles the allowed tax-free annual contribution to Health Savings Accounts, and it shifts the ratio of “age bands” to pre-Obamacare levels, allowing carriers to offer cheaper plans to younger consumers.
MEDICAID REFORM: The AHCA grandfathers in everyone who has been included in Obamacare’s expansion of Medicaid, then “transition[s] Medicaid into a system in which each state receives a certain amount of money for each of its residents in the program and has more flexibility over how the program functions. That allocation would revert to per person spending levels from 2016 and then grow each year at the rate of medical inflation. However, states would still receive enhanced Obamacare-levels of spending for individuals who were grandfathered in by having enrolled in expanded Medicaid before 2020.” Medicaid already suffered from major flaws such as poor health outcomes and seriously constricted access to care before Obamacare expanded it significantly. One-in-three doctors are not accepting new Medicaid patients. The status quo is hugely expensive, putting major strains on state budgets, and not working well. The whole program cries out for reform, which the AHCA delivers.
PRE-EXISTING CONDITIONS: The legislation maintains several of the more popular mandates and protections under Obamacare (although it’s worth noting that some of those requirements become much less popular once people are told how much they cost). People with pre-existing conditions must be covered, adult children can stay on their parents’ plans through age 26, coverage plans must comply with Obamacare’s categories of “essential health benefits,” and consumers with pre-existing conditions cannot be charged more than others. On the latter two mandate categories, states have the option to seek waivers from some of the EHB’s and “community rating” restrictions. In order to be granted a waiver, states must attest and demonstrate that they are doing so in pursuit of lowering premiums and/or covering more people. Recall that before Obamacare, every single state had a set of mandates and regulations in place. So even if some states apply for and receive voluntary waivers, there will be protections and requirements for consumers who live there. Fear-mongering about a return to the “wild west” are exaggerated.
No matter where they live, anyone who has continuous coverage (including people with pre-existing conditions who signed up for plans under Obamacare) cannot be impacted by a “community rating” waiver, immediately or in the future. And those consumers without coverage who decide to obtain it must be able to purchase to it. Average consumers who do this will be charged a one-time 30 percent surcharge on their plan for one year. Consumers with pre-existing conditions must have access to a high risk pool, which will be especially important in so-called waiver states. The AHCA directs upwards of $130 billion to these and similar funds. I strongly recommend this piece by Avik Roy, who argues that the fixation on pre-existing conditions (a worthwhile and compassionate concern) has taken on an outsized role in these debates. Part of his evidence is the fact that enrollment in Obamacare’s “bridge” program to help bring Americans with pre-existing ailments into the insurance fold between the law’s passage in 2010 and implementation barely broke into six figures.
POLICY CONCERNS: This legislation is far from perfect, and the Senate’s open-ended amendment process must and will be used to alter the bill. My biggest worries about the policy impact are as follows. (1) It’s widely recognized that a critical mass of older Americans approaching retirement age will be priced out of affordable plans, based on the level of assistance provided in the AHCA tax credits. Axios reports that GOP Senators, led by John Thune, plan to address this shortcoming. It is an urgent priority. (2) I’ve been told by senior Republican sources that health insurance actuaries have blessed the ’30 percent surcharge’ mechanism for incentivizing continuous coverage (especially among younger, healthier people) as effective, but I remain skeptical. If the only slap on the wrist for waiting to get sick or injured before showing up to buy “insurance” is a one-time, quickly-expiring uptick in cost, why wouldn’t these consumers just save the money and wait?
This is precisely the dynamic that is dooming Obamacare’s risk pools. More affordable, less mandate-laden coverage offerings to younger folks may attract more ‘young invincibles’ to the market, but the Senate should explore whether or not pro-rating the surcharge to reflect the amount of time a new consumer was uninsured might work better. This idea from two conservative policy experts, featuring automatically enrolling people (with an opt-out) into basic plans with costs that align with their tax credits, should also get a look. Cost could be a problematic factor, however.
Health insurance should be like auto insurance in one respect:
If you acquire a health condition while insured by company A, then company A is responsible for treating that condition as long as it lasts.
No escaping from responsibility by ending your policy.
This would solve much of the pre-existing condition problem.
Bring down cost of healthcare itself, is it fair that insurance and medicare pay less than a cash person? Prices for services should be public.
From The Hill, 05/05/17:
Trump is on a mission to win — even if Americans die in the process
There are people who have read the bill’s provisions and thought through their real-world implication. The only credible defense of the people who voted for it would be that they haven’t done so.
The House Health Care Disaster Is Really About Taxes
This bill will be dead on arrival in the Senate. The Senate won’t be able to come up with any alternative version acceptable to the House. The fundamental problem is that the republican majority Congress is totally incompetent in matters of governance.
@Greg: Of COURSE it is about taxes, because that’s what Obamacare was about… TAXES. MORE taxes, taxes on anything and everything.
Which, of course, Obama lied about. Remember? “Not one thin dime” in taxes?
Liberals in government HATE tax cuts because that reduces the amount of citizen’s money they can get their hands on to steal and waste.
Democrats realize what should be obvious: that giving more tax cuts to the wealthiest is frickin’ stupid, when you’re already running deficits and aren’t in the middle of an economic emergency. That tax cuts pay for themselves by increasing revenue is a fairy tale told by the greedy to the simple minded. It’s nothing but the cover story for a shake-down. The wealthiest benefit to an enormously disproportionate extent, while the adverse effects of the resultant deficits and debt increase become the problem of everyone else.
Trump’s tax proposals will shift untold billions into the pockets of people like Trump. If he’d release his damn tax returns like he promised, that would become immediately apparent. Don’t hold your breath while you’re waiting for that promise to be kept. He’s not going to do as he said. The man is a liar.
@Greg: Democrats don’t seem to understand much about economics except to take money from those that make it. How’d that tax and spend thing work out for the past 8 years? How easy should it have been to show a vast improvement after the worst recession since WWII? All your tax, tax, tax achieved was the worst recovery in history.
$10 trillion in added debt and 1.2% growth and all Obama could muster up was, “That’s the new norm. That’s the best that can be done.” I’m pretty sure liberals don’t have a clue about economics. Step aside and let the adults run the show.
You have elected an idiot, and everyone who isn’t knows it.
@Greg: No, we haven’t and if that is the best criticism you can come up with, you don’t believe it either. We rejected a criminal, a liar that put her own personal wealth before national security. We have an actual LEADER, something sadly lacking in the past 8 years.
The CBO scored Obamacare as, after 10 years, costing a trillion dollars and still leaving 30 million without insurance… right where we started, but another trillion in debt. THAT’S idiotic, you supported it and Gruber called you exactly what you are for believing the stupid lies Obama was spewing.
Oh, really? Got a link? To something other than the Trump White House?
Any new legislation as complex as the ACA requires a prolonged period of adjustments and fine tuning to get it operating as intended. (And if you think there was some quick and simple fix to the problems it addresses, like Trump, you don’t have a clue about the complexity of the nation’s health care and health insurance systems.) Instead, republicans have devoted the past 7 years to doing everything in their power to kill it while proclaiming it already dead—obviously without having bothered to work out any rational alternatives.
And what they have now patched together to keep up appearances? The republican House majority didn’t even bother with cost or effectiveness estimates before approving their current repeal and replace bill. They don’t give a rat’s patootie about either. They’ve all got little dollar signs in their eyes. Tax cuts are the name of the game. These people are worse than useless by every conceivable measure—unless you’re one of the tiny buy powerful big-money special interests to which they’ve sold their motley souls.
CBO’s Obamacare Predictions: How Accurate?
Good news of the day: French voters have rejected turning their own country over to a populace right-wing extremist. Le Pen has been defeated.
@Greg: Yeah, Greg. I do.
It was predicted Obamacare would drive up costs. It did. It was predicted Obamacare would kill jobs. It did. It was predicted Obamacare would ration services. It did. Those predictions came to pass, as well as some others.
You know the predictions that DIDN’T come to pass? That a family would save $2500 a year. That if you liked your insurance, you could keep it (period). That if you liked your doctor, you could keep it (period). That there were no taxes on the middle class within. And, that it would insure everyone. All failed. All lies.
@Bill… Deplorable Me:
Bill you know damn well that liberals are not going to admit that Obozo did not keep his promises 100;% I’ll bet they even promised him that if he liked his insurance, he could keep his insurance. and that the cost would actually go down. Well, I’ll say if his cost went down, it’s because he lost his insurance like so many did.