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The Democratic Strategist

Political Strategy for a Permanent Democratic Majority

How the Republican Plan, ‘Obamacare Lite,’ Cheats the Middle Class, Helps the Wealthy

The early reviews of ‘Obamacare lite,’ the just-released House of Represenatives Republican majority plan to replace the Affordable Care Act are rolling in, and those who were expecting the GOP proposal (aka ‘The American Health Care Act’)  would screw working people to benefit high-end health care consumers will not be surprised at the changes.

The AHCA is a predictable mess of irrational concessions to Obamacare-bashers, designed more to mollify knee-jerk extremists than thoughtful conservatives. Those who entertained the fantasy that the Republican alternative would have a clear explanation of how the plan would be funded will be disappointed, as will those who believed the Republicans would find a way to make sure no one lost the health security the ACA provided or be forced to pay more for health care.

As  Mike DeBonis, Amy Goldstein and Kelsey Snell report in the Washington Post,”Starting in 2020, however, the GOP plan would restrict the government’s generous Medicaid payment — 90 percent of the cost of covering people in the expansion group — only to people who were in the program as of then…“Trumpcare doesn’t replace the Affordable Care Act, it forces millions of Americans to pay more for less care,” said Senate Minority Leader Charles E. Schumer (D-N.Y.).”

In the Atlanta Journal-Constitution, Jay Bookman elaborates,

In fact, if enacted into law, the GOP plan would strip millions and millions of our fellow Americans of their health insurance, and all the progress that we’ve made in reducing the percentage of uninsured to record low levels will be quickly reversed.

Some would be forced to drop their policies because the subsidies that have allowed them to purchase individual coverage will be slashed and slashed dramatically in many instances. Others would lose coverage as the expansion of Medicaid is rolled back by the GOP bill, and as federal funding for traditional Medicaid is cut as well.  We have no good estimate on how many millions will be affected — House Speaker Paul Ryan is trying to force the plan through the committee process before the Congressional Budget Office can produce such numbers — but there is no plausible way to make cuts of the proposed magnitude without significant reductions in coverage.

On the other hand, if you’re wealthy, the House plan gives you a lot to smile about. The taxes on Americans making more than $200,000 a year that have helped to pay for Obamacare and that make it deficit-neutral at worst would be rolled back under the House plan, producing an average tax benefit of $165,000 a year for those in the top 0.1 percent, according to the Tax Policy Center.

In their New York Times article, “Millions Risk Losing Health Insurance in Republican Plan, Analysts Say,” Abby Goodnough and Reed Abelson explain:

Starting in 2020, the plan would do away with the current system of providing premium subsidies based on people’s income and the cost of insurance where they live. Instead, it would provide tax credits of $2,000 to $4,000 per year based on their age.

But the credits would not cover nearly as much of the cost of premiums as the current subsidies do, at least for the type of comprehensive coverage that the Affordable Care Act requires, analysts said. For many people, that could mean the difference between keeping coverage under the new system and having to give it up.

“The central issue is the tax credits are not going to be sufficient,” said Dr. J. Mario Molina, the chief executive of Molina Healthcare, an insurer that offers coverage through the Affordable Care Act marketplaces in California, Florida and several other states.

Other people likely to be hurt under the new plan are those in areas where the cost of coverage is high. Subsidies are now pegged to the cost of a plan within a specific market, but the tax credits in the Republican plan are the same whether you live in Alaska or Minnesota. Coverage tends to be most expensive in parts of the country where there are few hospitals or few insurers. “When it comes to health insurance, high-cost areas tend to be rural areas,” said Cynthia Cox, a researcher at the Kaiser Family Foundation, which recently did an analysis of how the tax credits compared with the subsidies now available.

In their New York Times op-ed, “How Republicans Plan to Ration Health Care,”

The Republicans say they want to give states more flexibility. But that flexibility most likely means they could use the money for non-health-care programs, or to close state budget gaps. When given budgetary flexibility with large sums of money, this is a common state tactic.

…State flexibility is a ruse. Per-person allotments are an elaborate cost-shifting mechanism — a fancy way to reduce federal funding and transfer financial responsibility for the health care of low-income Americans to states. A 2014 assessment by the Center on Budget and Policy Priorities of Representative Paul Ryan’s plan, which contained elements similar to those in the current proposal, estimated that this accounting trick would increase Medicaid costs for state budgets by $169 billion by 2026. So, under the banner of flexibility, the current Republican plan would force states to make a series of Hobson’s choices.

This would be even worse than going back to the days before the Affordable Care Act. It would force states to ration care and deny some Americans lifesaving treatments or nursing home care. Cruel only begins to describe the Republican plan.

And the Times editorial, “No Wonder the Republicans Hid the Health Bill,” notes,

While working people lose health care, the rich would come out winners. The bill would eliminate the taxes on businesses and individuals (people making more than $200,000 a year) who fund Obamacare. The tax cuts would total about $600 billion over 10 years, according to the Joint Committee on Taxation.

As Timothy Stoltzfus Jost puts it in his WaPo op-ed “the real focus of the legislation is not on health-care reform, not even on repealing the ACA as such. What the AHCA would in fact do is massively redistribute wealth from the poorest Americans to the wealthiest.”

After 8 years of blasting Obamacare and offering no alternative, the Republicans have kludged together a  predictable disaster. “Republicans have found themselves frantically scrawling out a hopelessly inadequate solution in order to meet a self-imposed deadline driven by their overarching desire to cut taxes for the rich,” writes Jonathan Chait at New York Magazine, who preers the term “Trumpcare.” He quotes Republican health care guru Avik Roy: “Expanding subsidies for high earners, and cutting health coverage off from the working poor: it sounds like a left-wing caricature of mustache-twirling, top-hatted Republican fat cats.” And “the caricature,” writes Chait, “is true.”

But Republicans don’t have a lot of wiggle room. They can afford no more than 21 GOP House members voting against the proposals, a pretty narrow path to enactment, given the criticism of the proposals that has emerged, just on the Republican side. Indeed, many of the GOP dissenters want something even worse.

It’s the same old game of cutting federal spending to later provide tax cuts for the rich, which is the emblematic goal of the GOP. This nightmare of a health care “plan” reveals in stark relief  the moral and intellectual bankruptcy that defines the modern Republican Party like no other.

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