The House of Representatives passed the American Healthcare Act (Trumpcare) today. This is a bill that will famously take healthcare away from 24 million people, remove the protections for people with pre-existing conditions, erase the requirement that defined set of services be included in insurance policies, and cut $800 billion dollars from Medicaid. The Medicare Trust Fund will lose four years of solvency. Insurance companies will be able to charge older persons five times what they charge younger people. All of this damage to healthcare is being done to American families so that President Trump and his Republican supporters can say that they kept their promise to “repeal and replace” Obamacare.
This law has three main objectives. First of all it is a tax cut for the wealthiest Americans. The Affordable Care Act (ACA) is paid for by 3.8 percent surtax on capital gains affecting high earners. There is also a 0.9percent Medicare surtax on people earning at least $250 thousand a year. Trumpcare eliminates these taxes to cost the treasury over $275 billion dollars over ten years. There will be a total of about $594 billion dollars in tax cuts for the wealthy over the next ten years. Overall, the Trumpcare bill will cut nearly$1 trillion dollars of spending for federal healthcare programs. Most of these tax cuts will benefit the wealthiest one percent of Americans. Secondly, the law implements part of the Conservative ideological vision that government should be used to help ordinary people. Government should not be needed to provide services for people because people should be able to get those services for themselves in the free market. Conservative ideologues, who define the politics of the Republican Party, believe this, even though no civilization in history or currently has ever provided healthcare to people through the free market. And lastly, the purpose of the law is to avoid the political consequences of the law itself. This law will hurt people – badly. It will make healthcare much more difficult to obtain in general, and particularly difficult for sick people, older people and poor people. When Republicans wanted to build political opposition to the ACA, they did it mostly by lying. They said the ACA had “death panels”. But when Democrats and progressives attack the Trumpcare bill, they only have to say things that are absolutely true. The entire Trumpcare bill is a kind of “death panel” wrapped in a tax cut.
Republicans will simply lie about the consequences of the bill they’ve passed. They will say for example, that the bill really does protect people with pre-existing conditions. It does not. It technically requires insurance companies to offer coverage to persons with pre-existing conditions, but simultaneously allows the insurance companies to charge them much higher premiums. This will allow insurance companies to simply price sick people out of the market. The high risk pools, which are absurdly underfunded, and which have failed in the past, will feature extremely expensive coverage. All but the wealthiest sick people will just fall between the cracks in this system. But that is not the point. The offering of healthcare to the sick and prices they cannot afford will be the basis for a lie that the system protects people with pre-existing conditions.
I don’t know if this law will pass in the Senate. We cannot assume the Republicans will pullback simply because the law implements some very bad policies that will hurt their own constituents. It is reasonable, given that Republicans control all parts of the government to fight a defensive fight to protect the ACA, which has benefited so many millions of Americans. But if the ACA goes down and Trumpcare becomes law, it will make no sense to try to resurrect the ACA. The grounds of the American healthcare fight will shift, if the Republicans succeed in implementing Trumpcare, to a place where most Americans will be willing to support universal healthcare. Faced with a healthcare system that will deny access to the poor, bankrupt the middle class, and abandon people when they become sick, Americans will be willing to the one solution that can solve this set of problems.
The obvious solution is Medicare for all. Medicare for all will solve the problem of access (there would be universal access for all). It would be funded by progressive taxation(the wealthy would pay a higher tax rate, like the way the ACA has been funded). Costs would be slashed because the for-profit insurance companies would not be in the healthcare business. The government as single payer would replace their function at dramatically lower costs. The insurance premiums and deductibles would go away. There would be higher level of taxation than the current level of Medicare taxation, but it would be a net reduction of costs compared to health insurance premiums and deductibles. The government would also be to negotiate much lower prices for prescription medications. Our costs under the existing system cost about 18 percent of GDP. The next most expensive healthcare system in the world costs about 11 percent of GDP.
Our current healthcare system is a moral abomination in that it leaves tens of millions of people without access to affordable healthcare. That is immoral. It is unjust. Simultaneously, the system fails on financial grounds. It costs about twice what universal healthcare systems cost in other industrialized democracies. The Trumpcare bill seeks to reduce costs (for wealthy taxpayers) by dramatically increasing costs and the injustice of the American healthcare system for everyone else. Should this crueler version of the American healthcare system be implemented, we may finally have the moral clarity and political courage to fight for Medicare for all. If it’s good enough for Grandma, its good enough for you and me.