Senate Health Care Bill Goes From Bad to Worse

The Senate’s latest version of its atrocious health care bill, introduced last Thursday, retains nearly all of the damaging provisions from the previous draft while adding some new ones to make it even worse. The Better Care Reconciliation Act keeps the draconian cuts to Medicaid and the drastically reduced subsidies for people to purchase individual plans on the state exchanges. It expands the use of tax-advantaged health savings accounts to pay for insurance premiums, which mainly benefits those with higher incomes. The most notable—and potentially damaging—addition to the new bill is Ted Cruz’s “Consumer Freedom” amendment, which would allow insurance companies to sell bare-bones policies on a state exchange as long as they also offered at least one Affordable Care Act-compliant plan. These minimal policies would likely feature skimpy coverage, low premiums, and high deductibles; those who actually needed health care would be forced to buy comprehensive plans, the costs of which would then skyrocket. It would amount to a return to the pre-ACA days when insurance companies could deny coverage to those with pre-existing conditions or make it prohibitively expensive. The result would be a two-tiered risk pool in which the younger and healthier could purchase cheaper policies that effectively cover nothing, while those with greater health care needs—chronic conditions, mental health requirements, age-related demands—would face unaffordable premiums, causing enrollment to drop and premiums to spike even higher.

For Republicans and others on the political spectrum who espouse a free market approach to health care as the ultimate way to cut costs and expand choice, this is essentially what it would look like. It’s worth noting that in addition to the American Medical Association, American Hospital Association, AARP, American Cancer Society and dozens of consumer advocacy organizations, the trade group for the nation’s insurance industry has come out against the bill.

Insurance is supposed to protect against unforeseen costs: an auto accident, tornado damage to one’s home, the theft of one’s belongings on vacation. If we could anticipate all of our expenditures, we wouldn’t need insurance. The objective of health insurance has expanded from its original purpose of income stabilization to include the administration of health care with the aim of maintaining or increasing wellness. As studies have shown, personal bankruptcies and medical debt are down since the passage of the ACA, and Americans appear to be healthier.

The Senate bill does not address either of these goals, and in fact would detract from both. Because the Republican Party lacks a coherent vision of what a workable health insurance system should look like, or even if it’s the government’s role to provide health care for any of its citizens in the first place, they have given us a mess of a bill that would decrease coverage by millions while doing nothing to keep health care costs down. It’s a world in which anyone who is poor, sick, or old will have the freedom to replace their health care with no health care at all.

The Death of the Republican Health Care Bill: A Post-Mortem Analysis

Last Friday, House Speaker Paul Ryan withdrew his health care bill from consideration after it became clear that he had failed to amass the support necessary to get it passed. It was a victory for Democrats, for the 14 million people who stood to lose their health insurance next year if the bill had gone through, for the hospitals and community health centers that would have lost revenue when their patient base dwindled or was less able to pay for care, and for the countless Americans who depend on mental health coverage, drug treatment, maternity care, preventive services, and other essential health benefits mandated by the Affordable Care Act.

It was a major defeat for Ryan, for Trump, and for the Republican Party, which now faces a tougher battle to enact the rest of its agenda. In particular, the massive, permanent tax cuts for the rich that Ryan has been eager to pass now look less likely. The reasons why have to do with the nitty-gritty of the legislative process, but my understanding is that it goes something like this: in order to get around a potential Democratic filibuster, any GOP tax bill would have to be revenue-neutral after ten years, meaning that it could not increase the federal deficit after that point. The GOP needed to repeal the ACA and its $1.2 trillion of taxes on higher-income earners first to reduce the baseline of tax revenue. This would then have allowed them to design a tax code that could bring in $1.2 trillion less and still be revenue-neutral. (Jonathan Chait at New York Magazine has a more detailed explanation here.) But since the ACA repeal failed, the Republicans will have to rethink their strategy on tax cuts and what’s politically viable right now.

The larger takeaways from the downfall of the GOP’s American Health Care Act have to do with what it reveals about the current political moment and what comes next.

1. The Republican failure to repeal Obamacare indicates a federal right to health care that now cannot be taken away. A number of commentators and lawmakers have said this, including Chait (again) in a column last Friday, Jonathan Cohn in the Huffington Post, and Senator Bill Cassidy (R-LA) in an article in the New York Times. I hope they’re right, but I’m more cautious. The AHCA died not because moderate Republicans decried the bill’s cruelty in stripping away health insurance from their constituents. Rather, it was defeated by a coalition of Republicans with a range of political convictions. According to an analysis in the New York Times, nearly as many ultra-conservatives (15) were against the bill as moderates (10) and “others” (8) combined. The hard-liners thought the legislation didn’t go far enough in ending the ACA and its protections, among them Medicaid and the law’s essential health benefits. In short, there was no ideological consensus among the Republicans who were opposed to the bill.

2. The AHCA revealed the GOP’s true aims: tax cuts for the wealthy and cuts in benefits to low-income Americans. As I’ve written previously, the bill was stunning in its barefaced cruelty, gutting Medicaid and reducing income-based subsidies to pay for health insurance, while pushing through enormous tax cuts for rich people.

3. Politics, not policy, dictated the process. As the last-minute deal-making revealed, there is no GOP agreement on the federal government’s role in providing health care to its citizens, or even whether it should. The AHCA was driven by a political directive to pass a bill so that Republicans could say they made good on a campaign promise, with little regard for how people would be affected. The Congressional Budget Office’s estimate that 24 million Americans would lose their health insurance within a decade was twisted into an avowal that once people were freed from the shackles of government interference, they would have the ability to choose a plan that worked for them and their health care needs. Trump’s statement on Friday that the best thing for the Republicans politically would be to let Obamacare “explode” indicates his lack of interest in the actual lives of people who are affected by what the government, of which he is now in charge, does and does not do.

4. There are still plenty of ways for Trump and his administration to weaken the Affordable Care Act.  They could rewrite regulations to undo some of the act’s provisions, including no-cost contraceptive coverage and the cost-sharing subsidies that help people pay for co-pays and deductibles; both of these were added to the ACA by rule and are not written into the law itself. Or they could undermine the exchanges by pulling funding for advertisements in advance of the open enrollment periods, which could lead to fewer people signing up.

In short, the Affordable Care Act may be safe for now, but this is just the beginning. And whether the law is weakened or strengthened through the tweaks that are sure to come may depend on continued public pressure to expose the ways in which the law is working, as well as the ways in which it can be improved.

The GOP Health Care Bill is Cruel and Deceitful

This morning I’m trying to wrap my head around the cynicism and hypocrisy of the GOP health care bill, which was released last night. It preserves several of the most popular provisions of the Affordable Care Act, including allowing young adults to remain on their parents’ plan until the age of 26 and requiring insurers to cover those with pre-existing conditions. But in scrapping the individual mandate, killing the Medicaid expansion and eliminating income-based subsidies that help people buy insurance, the bill would rip away coverage from millions of people while doing nothing to keep costs down.

Republicans tout the “affordability” of their plan, but it looks to me that it will be just the opposite. Right now the ACA calculates subsidies based on age, income, and the cost of premiums in the local marketplace. The GOP bill would do away with these parameters and instead give flat tax credits determined by age bracket, from $2,000 for those under 30 to $4,000 for those over 60, even for higher-income earners who currently receive nothing under the ACA—up to $75,000 for individuals and $150,000 for couples. A 40-year old man in New Haven, CT with an annual income of $20,000 now receives a subsidy of $5,040 with the ACA. Under the Republican plan, his tax credit would decrease by 40% to $3,000, forcing him to come up with $2,040 out-of-pocket just to pay his premiums, assuming they stay the same. Many people receive additional subsidies to help cover the cost of copays; these would disappear. The GOP bill would give low-income people less financial assistance, while those who need it less would get more. It shifts money from the poor to the wealthy, all in the name of “affordability.”

Tom Mihalek, Reuters

Tom Mihalek, Reuters

The GOP bill would roll back the ACA’s Medicaid expansion by converting what is now an open-ended entitlement to a per-capita allotment to states. Funding wouldn’t necessarily rise as costs increase, and federal funding to states would be reduced starting in 2020.

In addition to “affordability,” the other watchwords that Republican lawmakers enjoy spouting are “freedom” and “choice.” In a tweet last month regarding the ACA, House Speaker Paul Ryan (R-WI) defined freedom as “the ability to buy what you want to fit what you need.” As his party sees it, if you want to spend your life not having health insurance, that should be your choice. Of course, all the GOP talk about “choice” is a smokescreen, because their plan does nothing to address it. Not having money to buy quality health insurance makes the lack of coverage not a choice, but an inevitability. In two other particularly egregious examples, Rep. Jason Chaffetz (R-UT) said, “You know what, Americans have choices … So maybe, rather than getting that new iPhone that they just love—and they want to go spend hundreds of dollars on—maybe they invest it in their own health care.” Last week, Rep. Roger Marshall (R-KS) told STAT News that some people “just don’t want health care.”

There’s no guarantee that the GOP bill in its current version will get through both houses of Congress. Conservatives dislike it because they think its subsidies are too generous, while four Republican senators have expressed misgivings about the rollback of the Medicaid expansion. And the Congressional Budget Office is still crunching the numbers to estimate costs and the number of people who will be affected. But it seems likely, given the bill’s provisions, that millions will lose their health insurance as it becomes unaffordable or they’re kicked off Medicaid rolls when states run out of money.

I find extremely disturbing the cruel cynicism of the GOP bill, as well as the contortions of lawmakers to spin it as an improvement over the ACA for the sickest and most vulnerable. What it reveals about our priorities as a nation is deeply troubling. It will make health insurance unaffordable for the vast majority of the 20 million Americans who obtained coverage under the ACA while shifting wealth to those who already have more. We are the only industrialized nation that does not have some kind of universal, single-payer health coverage for its residents; we have already signaled that we regard health care as a privilege for those who can afford it, not as a human right. The ACA has its problems, to be sure, but it has led to the lowest uninsured rates in American history. The Republican bill will increase wealth inequality, cause many to get sicker, and roll back the protections we have gained over the past six years of Obamacare.

Here’s some worthwhile additional reading: Sarah Kliff's summary of the bill in Vox, John Cassidy's commentary in the New Yorker, Jonathan Chait’s piece in New York Magazine’s Daily Intelligencer, and Michael Hiltzik’s blistering analysis of the GOP bill in today's Los Angeles Times. The Kaiser Family Foundation has excellent, in-depth coverage of health care reform, including interactive charts to calculate subsidies under the ACA and various GOP plans.

 

 

The Gutting of the Affordable Care Act

A number of people have asked me if I’m watching the impending annihilation of the Affordable Care Act as the new administration gears up to take office this week. The answer is yes, both because I’m interested in public health and health policy and because I get my own health insurance through the ACA. The assault on the law is already underway, and the consequences will be dire. For those of you who are concerned about what’s happening and what could happen but haven’t been following the news that closely, here’s a primer.

·      Although House Speaker Paul Ryan and President-elect Donald Trump have been crowing for months about repealing Obamacare, they don’t have enough votes to overturn the law outright. In the Senate, where Republicans have a 52-48 majority, they’d need 60 votes to overcome a Democratic filibuster. This means that eight Democrats would have to vote to repeal the ACA, which is extremely unlikely.

·      Since the Republicans lack a filibuster-proof majority in the Senate, they’ve chosen instead to gut major provisions of the ACA through a process called budget reconciliation. In short, this process allows them to get rid of sections of the law that are funded through the federal budget, but only those sections. They can reverse the Medicaid expansion. They can rescind the subsidies that most consumers receive to purchase insurance on the exchanges. They can also repeal the individual mandate to buy insurance. Both the House and the Senate voted last week to approve budget measures that will allow them to take these actions.

·      The Affordable Care Act is more than a program that allows individuals to purchase insurance plans through state exchanges. It contains a number of provisions that affect everyone who has health insurance, whether through an employer or on the individual market. These features of the law appear to be safe for now, because they’re untouchable through the budget reconciliation process. But it’s unclear whether they’ll ultimately be at risk. They include:

o   Free coverage of preventive services, including mammograms

o   Free coverage of birth control

o   Allowing young adults to remain on their parents’ health insurance until the age of 26

o   No denial of coverage for pre-existing conditions

o   An end to lifetime caps on how much an insurer pays to cover someone, which is crucial for those with conditions that are costly to treat

·      Republican leaders have proposed several ideas that they claim will provide people with better coverage at lower costs than Obamacare. They include:

o   Increased use of Health Savings Accounts. HSAs, however, are not the same as health insurance; they simply allow individuals to move pre-tax dollars into an account that can be used to pay for medical expenses out-of-pocket. They do nothing to ensure access or affordability.

o   Allowing insurance companies to sell policies over state lines. However, out-of-state insurers would probably just end up buying into existing networks of providers, so it wouldn’t actually improve anything. In addition, states have varied requirements for minimum coverage. New York State, for example, just passed a bill (which is not yet law) that provides free birth control coverage for women. Therefore, insurers would probably choose to sell their policies in states with the least, not most restrictive requirements.

·      Republicans, including Tom Price in his confirmation hearing today, have been asserting that no one will have their health insurance pulled out from under them when the ACA is gutted. They’ve said they will replace it with a plan that has people “beautifully covered,” to quote Trump. But the timing of Obamacare’s replacement is uncertain, as no one has offered a detailed blueprint of what it will look like, and health economists agree that it would be impossible to design a plan that offers better coverage and is cheaper for both individuals and the government than what we have now. An immediate repeal of the ACA’s individual subsidies would throw the insurance market into chaos, as companies would pull out to avoid the uncertainty that is sure to follow, since no one knows what the replacement plan will look like and when it will come.

The Affordable Care Act expanded health insurance coverage to 20 million Americans, although about 25 million more remain uninsured. Despite the law’s problems—high deductibles, rising premiums, small networks of providers, limited choice of plans in many parts of the country—removing its protections from those who need them strikes me as inhumane. The nonpartisan Congressional Budget Office released a report yesterday which said that a repeal of the ACA would cost 18 million people their insurance in the first year alone. We’ll probably never have single-payer health insurance in the U.S., as in every other industrialized country. But until we can implement a program that increases access while controlling costs, we have to work on improving what we’ve got, not destroying basic protections that are saving lives.