House Speaker Paul Ryan and team have finally come up with what they are going to try to pass off as an Obamacare replacement plan. It's not. It's tax cuts for the wealthy, first and foremost, because if you are a Republican, everything is tax cuts for the wealthy. It will definitely cover fewer people than Obamacare—but we don't know how many—and it will probably balloon the deficit—but we don't know by how much—because it hasn't been scored by the Congressional Budget Office. And probably won't be before they start voting on it in committee on Wednesday. So in seven years of preparing for this, what have they come up with? Here's a quick first look at the American Health Care Act.
- It ends Obamacare's individual mandate to buy insurance retroactively to 2015. However, anyone who goes without health coverage for two months or more would face a 30 percent surcharge on premiums for a year. This is disincentive for someone who's lost insurance to get it again, unless they are actually sick. Which means sicker people sign up, which health insurance companies are going to hate. Oh, and it makes it very hard for people to change jobs, since insurance often doesn't kick in for new employees for a few months. It also means some insurers probably won't participate in the 2018 exchanges.
- It ends Medicaid expansion as of December 31, 2019, conveniently after the midterms but pretty stupidly in the middle of the next presidential election. As of January 2020, enrollment in the Medicaid expansion would "freeze," with no new enrollees allowed, which would mean that as people's incomes change and they leave the program, they wouldn't be able to get back on. It would also turn the program into a block grant, where states get a lump sum of federal money for each enrollee, as opposed to the current system that pays all of a Medicaid enrollees bills.
- It defunds Planned Parenthood. It says that no federal funding can go to an organization that "provides for abortions," other than those done in cases of rape or incest or to save the life of the mother. Even though we've already got the Hyde amendment which says no federal funding can go to abortion, they have to have this to explicitly take Medicaid money away from Planned Parenthood. And take a critical provider of women's health care services away from low-income women.
- It replaces Obamacare subsidies with age-based, refundable premium tax credits to help people buy insurance. The credits would phase down starting at income levels of $75,000 for individuals and $150,000 for families. These credits would be adjusted annually by the consumer inflation rate plus 1 percent—Obamacare subsides change with premium costs. The way it's structured is geared toward younger, wealthier people—they get the most assistance. Older people, particularly, are disadvantaged because insurers will be able to charge them as much as 5 times more.
- You can put more into a health savings account, which is basically a tax break for wealthier people. HSAs can't replace health insurance, but if you can afford to save a lot in them, you get great tax benefits.
- What it keeps: dependent coverage until age 26; the ban on discriminating for pre-existing conditions; essential health benefits like maternity care, mental health and substance abuse care, preventive services; and prohibitions on annual and lifetime benefit caps—it would still bar insurers from setting a limit on how much they have to pay to cover someone.
And it's already been rejected by members of the House Freedom Caucus.
"This is Obamacare by a different form," former Freedom Caucus chairman Jim Jordan (R-Ohio) told POLITICO. "They’re still keeping the taxes in place and Medicaid expansion, and they're starting a new entitlement."
Once the CBO has a chance to weigh in on how many people will lose coverage and how much this is going to cost the nation, expect the lifting to get even heavier for Paul Ryan. But hey, seven years later and they managed to come up with something—by taking a red pencil to Obamacare and calling it theirs.