The wait is finally over. After months and months of Republicans vowing to repeal and replace the Affordable Care Act with “something better”, they unveiled their new healthcare plan this past Monday…and nobody likes it.
Here’s what I find odd about this whole thing: House Speaker Paul Ryan was constantly asked what his plan for a replacement for ObamaCare would be and all this time he reiterated that he had a plan, but he wouldn’t tell us what the plan was. Now this healthcare bill entitled “The American Healthcare Act” has come out and there’s just so much about it that’s just…weird. Just flat-out weird.
For starters, there’s a lot more of ObamaCare in this bill than I thought there would be, which I suppose is a good thing because while ObamaCare did have some major flaws, there were a lot of good provisions in there as well. One of the biggest things that this bill kept from ObamaCare was the provision that you could stay on your parent’s health insurance until age 26. Insurance companies still can’t discriminate or deny coverage to those with preexisting conditions or impose lifetime limits. There are tax credits like ObamaCare so that people can afford health insurance. And finally, like the ACA, Medicaid would now be expanded under this new bill.
So that’s what Republicans are keeping from ObamaCare, but I want to make sure we all realize that there is still a LOT that is changing.
Tax Credits (Based on Age)
Those tax credits we mentioned earlier are going to based off a person’s age rather than their income which is problematic for a number of reasons. Mainly, it makes it nearly impossible for poor people to afford insurance because unlike ObamaCare, which offered government subsidies to those in low income brackets, the new Republican bill makes it to where those subsidies are now taken away, making it impossible to afford health insurance. The credit rating agency Standard & Poor estimates that between 6-10 million people will lose health coverage if this bill is passed. A lot more people would find that the coverage they can afford has huge deductibles and those plans would have some serious problematic gaps in terms of what isn’t covered. In addition, this age-based system would lead to enormous tax cuts for the rich. Just to illustrate how big those tax cuts would be, billionaire Warren Buffett would save an average around $500 million a year under this Republican bill.
The Medicaid expansion is a little misleading. Because while it is true that this bill would expand Medicaid, there’s a provision in this bill that states it would stop adding people in 2020. Medicaid currently holds around 10 million Americans.
Replacing The Individual Mandate
So let’s provide some background here. To oversimplify things just a bit, the core dilemma in health insurance markets today is having enough healthy people in the system to balance out the number of sick people. Right now, there are a lot more sick people which is driving up the cost of insurance for healthy people. When this happens, the healthy people end up leaving because they either can’t afford the higher cost or just don’t want to pay it because they don’t necessarily need health insurance. That is the main reason why health costs have risen for everyone to the point where it is completely unaffordable.
The way ObamaCare tried to solve this problem is with the individual mandate, which pretty much meant that everyone had to have health insurance or pay a large fine.
Instead this new Republican bill gets rid of the individual mandate and replaces it with a provision saying that insurance companies can charge you a 30% premium if you end up getting sick.
There’s no way in hell that’s going to work.
Here’s why: ObamaCare’s individual mandate already doesn’t pull enough healthy people into the system to balance out the sick. It’s why premiums have been rising in a lot of markets. This Republican plan is even weaker because it’s prone to what are known as “death spirals” in which all the healthy people leave the system, leaving only sick people who definitely can’t afford coverage, even with government subsidies.
This bill allows insurance companies to charge higher premiums and higher co-pays than ObamaCare in addition to making it harder to use your healthcare once you have it. And that’s super ironic considering Republicans have been complaining for YEARS that premiums and co-pays were too high under ObamaCare and now under their new plan they promised would be “something better”, that something better is making insurance more expensive and harder to use.
I do also want to be clear that this is simply just a bill that Republicans have proposed and parts of it will definitely change as the House and the Senate argue over what should be changed. The most shocking thing I think about this proposed bill is that it was released without estimates from the Congressional Budget Office. But I think the bigger picture here is that Republicans have lost sight of what they wanted to accomplish by repealing the Affordable Care Act because this bill is definitely not a fix to the healthcare system. It’s essentially a weaker version of ObamaCare.
Andrew Kurzeja is a senior writer and contributor for the Asterisk Effect. Questions and comments can be submitted to the author at andrewkurzeja5@