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Tuesday, March 07, 2017


"Strikingly regressive" ACA replacement

by Tom Sullivan

House Republicans last night unveiled their first pass at a replacement for Obamacare. It comes in two parts. You can read the American Health Care Act here and here. There is a summary of changes here. The Congressional Budget Office has not yet scored the costs of the proposal. Moments after its release, Rep. Justin Amash (R-Mich.) dubbed it Obamacare 2.0. Other Republicans are lining up against it, CNN reports:

Conservative and moderate Republicans have raised concerns about key provisions within the bill. Conservatives say have argued that refundable tax credits are little more than a new entitlement program and some Republicans from Medicaid-expansion states have said they would not support plans that could kick millions of people off the Medicaid rolls.
It is a bill that doesn't know what it is trying to do, writes Ezra Klein at Vox, calling it "strikingly regressive." He adds, "It is difficult to say what question, or set of questions, would lead to this bill as an answer." Or what's better about it. The bottom line?
In reality, what I think we’re seeing here is Republicans trying desperately to come up with something that would allow them to repeal and replace Obamacare; this is a compromise of a compromise of a compromise aimed at fulfilling that promise. But “repeal-and-replace” is a political slogan, not a policy goal. This is a lot of political pain to endure for a bill that won’t improve many peoples’ lives, but will badly hurt millions.
Of course, it defunds abortion providers (Planned Parenthood) for one year, so maybe it does know it's trying to do that much. But let's get to what else it does.

Goodbye subsidies. Hello tax credits.

That's enough to explain the perspective of people who wrote this bill. Government expenditures for Them : bad. Government tax breaks for me : good. Rather than basing tax credits on income as the ACA does, this bill bases them on age. Sarah Kliff writes at Vox:
But under the Republican plan, insurers would be allowed to charge the oldest Americans five times as much as the youngest Americans. Their financial help would not scale nearly as much as their premiums would.

“You’re both jacking up the prices and giving people less of a subsidy, which is a damaging combination,” says David Certner, legislative policy director for the AARP, which lobbies on behalf of Americans over 55.

This new tax credit structure could also hurt to many low-income Americans, whose subsidies would fall substantially. The Kaiser Family Foundation estimates that that these new tax credits would be anywhere between 31 and 82 percent lower for a 60-year-old who earns $20,000, depending on where that 60-year-old lives.

Higher-earning Americans, however, could see their benefits increase significantly. People who earned $48,280 or more under Obamacare got no help — but now anyone under the $75,000 threshold gets the biggest tax credit.
"Incentive" means punishment

"Incentive" in the repeal bill, translated from Republican, means punishment. Under SEC. 133. CONTINUOUS HEALTH INSURANCE COVERAGE INCENTIVE, for anyone with a lapse in coverage of more than 63 days, "issuers will assess a flat 30 percent late-enrollment surcharge on top of their base premium." Under Obamacare, a fine for being uninsured went to the U.S. Treasury. This plum goes to the insurers for a year.

Funding still muddy

Vann R. Newkirk II writing for The Atlantic explains:
This is where it gets really tricky for the CBO scoring. The new proposed bill cuts almost all of the revenue-generating pieces of Obamacare, from its tanning taxes to its medical-device taxes. The individual mandate to purchase insurance and the employer mandate to provide it are levied as taxes, and the Republican plan would repeal those as well. Although this plan will probably lower long-term Medicaid outlays, it’s unclear if the relatively generous tax credit and its rescission of revenue-generation will lead the bill as a whole to have a positive impact on the deficit.
And there is a tax break for insurance companies that pay their CEOs more than $500,000 per year.

Klein is incredulous:
After literally years of complaining Obamacare was jammed down the American people’s throats with insufficient information or consideration, the GOP intends to hold committee votes on their bill two days after releasing it, and without a Congressional Budget Office report estimating either coverage or fiscal effects. It’s breathtaking.

There is a good chance this is only an opening gambit, but if the Republican House can slip it under people's doors before resistance can rally, they'll take it. They may have a higher hill to climb in the Senate:
In a letter to Senate Majority Leader Mitch McConnell on Monday, Republican Sens. Rob Portman, Shelley Moore Capito, Cory Gardner, and Lisa Murkowski laid out concerns regarding the repeal and replacement of the Affordable Care Act, in what could be the beginning of serious trouble for the GOP's plan to overhaul the healthcare law.
Stay tuned, and don't forget to contact your congress critters. They can't wait to hear from you.