There are at least two ways to look at the American Health Care Act, the Obamacare-replacement proposal that House Republicans released on Monday. Looked at up close, it perhaps isn't quite as extreme, in some respects, as previous G.O.P. proposals. But if you step back and consider what enacting this bill would mean for the health-care system as a whole, and for American society as a whole, it is far from moderate and reasonable.
The bill aims to take a wrecking ball to the principle of universal coverage. If enacted, millions more Americans would end up without any health care. For many people who purchase individual policies, especially older people, it promises fewer services for more money. And it also proposes a big tax cut for the rich, which would be financed by slashing Medicaid, the federal program that provides health care to low-income people.
Some of these provisions haven't yet received the attention they deserve. Much of the initial coverage of the bill has focussed on how much of the 2010 Affordable Care Act this Republican proposal would retain, rather than what it would demolish. "A curious thing has happened to the Republican replacement plan as it has evolved through multiple drafts: it has begun to look more and more like Obamacare itself," Vox's Sarah Kliff, whose health-care pieces are essential reading, wrote on Monday. Larry Levitt, a well-known health-care expert at the Kaiser Family Foundation, said on Twitter, "One wonders whether House Republicans would like to make bigger changes to the ACA, but are limited by budget reconciliation rules."
These observations were perfectly accurate. The G.O.P. bill would keep some of the most popular parts of the Affordable Care Act, including the ban on insurers turning away people who have preëxisting conditions, and the ability of young adults up to the age of twenty-six to obtain coverage through their parents' policies. The G.O.P. proposals "do not repeal the ACA," Timothy Jost, another noted health-care expert, wrote at the Health Affairs Blog on Tuesday. "They leave in place the ACA’s titles affecting Medicare, quality of care, program integrity … indeed virtually all of the ACA except for its insurance affordability provisions, individual and employer mandates, taxes, and Medicaid reforms."
Some ultra-conservative Republican groups, including the Koch-brothers-supported Americans For Prosperity, have announced that they will oppose the American Health Care Act because it doesn't go far enough. But the fact that the Kochs don't like the bill, and that it preserves some things that would be politically impossible to strike down, doesn't make it reasonable.
Back in January, Donald Trump promised that the replacement for Obamacare would provide “insurance for everybody.” By endorsing the American Health Care Act, on Tuesday, Trump has broken his pledge. Paul Ryan, the House Speaker, and his colleagues aren't talking about universal coverage. Instead, they use weasel words such as “universal access.” Roughly speaking, that means that if you can afford an insurance plan, and you choose to buy one, you will be able to do so. The A.C.A. was fundamentally different. To provide near-universal coverage, it relied on legal mandates, hefty subsidies, and a big expansion of Medicaid. The Republican proposal would eliminate the mandates, replace the subsidies, and gut the Medicaid expansion.
How many millions will end up uninsured if this bill passes? The Congressional Budget Office, once it has analyzed the proposal, will provide its best guess. Rather than wait for the C.B.O. to complete this work, Ryan and his colleagues are trying to hurry the legislation through the committee stage in a few days. According to some reports, they want the entire House to vote within a month. The reason for the rush should be obvious: the more you look at the G.O.P. proposal, the more damaging it appears.
The reason there was an individual mandate in the A.C.A. was to force healthy young people to buy insurance. If you don't do that, too many older and sick people end up in the insurers' risk pools—a problem known as "adverse selection”—which can produce a deadly spiral of rising prices and falling enrollment. The G.O.P. plan seeks to avoid this outcome by allowing insurers to charge people a premium of thirty per cent for signing up if they have previously allowed their coverage to lapse. But this seems unlikely to solve the problem. Given the price of insurance, many healthy people will surely take the chance of staying uncovered, and pay the extra thirty per cent only if they get sick.
Meanwhile, for families that earn less than fifty thousand dollars a year and can't obtain coverage through employer plans, the A.C.A. offers subsidies that can total to eight or ten thousand dollars a year. (The subsidies need to be this large because private insurance is so expensive.) The House G.O.P. plan would replace these federal subsidies with refundable tax credits, which, in many cases, would be a lot smaller—leaving people of modest means to fork out more from their own pockets.
To be sure, Republicans claim that some people will end up paying less than they do now. Since their bill would allow insurance companies to jack up the premiums older people pay, this claim almost certainly won't apply to the group in most need of health care. If others do end up paying less, it will be largely because insurers will be allowed to offer them cheaper, lower-quality plans, with less coverage and even higher deductibles. "But, what good will it do a person making $15,000 a year to get a premium credit only large enough to buy a plan with a $3,000 or $5,000 deductible?" Bob Laszewski, a Washington-based consultant and health-care blogger, asked on Wednesday.
What good indeed?
By contrast, the rich, especially the very rich, stand to benefit greatly from the American Health Care Act. Families earning as much as a hundred and fifty thousand dollars a year would be eligible for a tax credit of four thousand dollars. Many households earning more than two hundred and fifty thousand dollars a year would get an even bigger present. Under the A.C.A., these very high earners were hit with a new 3.8 per cent Medicare tax on their investment income, such as interest and dividends, and a 0.9 per cent surtax on their ordinary income. The House G.O.P. plan would eliminate these taxes and make up for some of the lost revenue by repealing the most successful and cost-effective part of Obamacare: the expansion of Medicaid, which enabled as many as ten million low-income Americans to get covered.
For political reasons, the bill would delay the Medicaid-expansion rollback until 2020. In three years, though, the A.C.A. expansion would "freeze," and the states, which administer Medicaid, would no longer be able to enroll the types of people who gained access to coverage under the 2010 reform. Over time, this change would lead to a substantial rise in the number of uninsured. In addition, the House G.O.P. proposal would change how the rest of Medicaid is financed. At the moment, the federal government covers almost all the bills that patients run up, with no upper limit. Under the new system, starting in 2020 Washington would pay the states only a fixed sum for each enrollee. Experts agree this would eventually lead to a big cut in funding, and, unless the states stepped in, a big drop in coverage.
This “shameful Republican assault on Medicaid,” as I referred to it a couple of weeks ago, isn't a bit part of the House G.O.P. proposal, or an addendum: it's a central component. "Indeed," Timothy Jost commented, "the bill is not so much an ACA repeal bill as it is an attempt to change dramatically the Medicaid program." Ryan and his colleagues won't portray things this way, of course. They'll continue to insist they are looking to "give every American access to quality, affordable health insurance." The truth is very different.