The six sorry words in the title above sum up the House bill released by Republicans last evening in their effort to repeal and replace Obamacare. A quick review suggests under this bill our insured population would fall precipitously; health insurance benefits would deteriorate dangerously; and costs would escalate dramatically.
The only good feature of this bill would be that the House Republicans would “own” these untoward consequences and then reap the negative effects in the 2018 and 2020 elections.
Let’s unpack some of the primary features of this bill.
The bill would end the Medicaid Expansion in 2019. Currently, 31 states and D.C. are undertaking the Medicaid expansion, and between 10 million and 11 million persons have been newly enrolled through it. If federal payments were reduced only to traditional levels of federal financial participation, at least half of this number likely would be removed from the Medicaid roles almost immediately. Would such an action be acceptable? Definitely not!
The bill would implement per capita caps for Medicaid in 2019. Such caps would shift the burden of the Medicaid program from the federal government to the states, many of which will be unable to take on the additional costs. Hence, the net effect would be a rapid and progressive erosion of the health insurance benefits for those enrolled in Medicaid (Essential Health Benefits would be eliminated in 2018). Since Medicaid covers 75 million persons who are poor, who are disabled, or who are older, the effects on American society would be enormous. Would this be acceptable? Definitely not!
The bill would replace insurance subsidies with reduced tax credits for those with moderate incomes in 2019. Under the ACA, everyone insured through a state marketplace with an income less than 400% of the federal poverty level has received a direct subsidy. In addition, those under 250% of the federal poverty level also received a subsidy to help pay for care. As a result, more than 20 million persons have become newly enrolled in health insurance. The proposed Republican bill would slash these subsidies and replace them with much smaller retroactive tax credits for private insurance. The immediate net effect would be that millions of moderate income Americans would no longer be able to afford health insurance. Would this be acceptable? Definitely not!
The bill would increase insurance costs for virtually everyone, especially for Americans who are older or who are disabled. Under the ACA, insurance companies were required to offer community-rated insurance, and were prevented from assessing costs based upon personal characteristics. That would no longer be true under the proposed Republican plan, which includes “high-risk pools.” Persons who are older and persons who have disabilities would pay much more under this plan. Would this be acceptable? Definitely not!
The bill would promote health savings accounts. Few, if any, of the persons who have been newly insured under the ACA could afford to contribute to health savings accounts. Such accounts are useful only to persons with higher incomes. Hence, they would represent a new form of discrimination against those who are poor or disabled, most of whom would be very likely to forgo care because they would not have funds in such accounts to pay for care.
Would any of this be acceptable? Most definitely not!