Our friend Paul inherited a car. It only had a few miles and still had that new car smell, but it wasn’t brand new, it wasn’t the exact car Paul wanted, and he hated the color. Paul despised the car. The Check Engine light came on as Paul took the car out for his first drive. He cursed the car and threatened to drop it off at the junk yard. He didn’t fix the problem. He never even looked to see why the idiot light was on. Paul continued to drive the car without bothering with routine service after other warnings lit up his dashboard. The Check Oil light had only elicited more curses and more threats of the compactor at the junk yard. But no matter how badly Paul abused the car, the damned vehicle started every day and managed to get him wherever he needed to go. Now, a couple of years into Paul’s ownership, the car is starting to stall and it has difficulty going up hills. Paul is telling everyone that this car, this worthless piece of garbage, needs to be replaced. And that is our friend Paul Ryan’s relationship with Obamacare.
The Chairman of the House Ways and Means Committee, Kevin Brady (R-TX), introduced the Republican alternative to the Patient Protection and Affordable Care Act (Obamacare) yesterday on TV. His main thrust was that Obamacare is failing, a disaster, and that the Republicans have to do something. Anything would be better! And to test that theory we have the American Health Care Act.
Seven years in the making! And, as White House Press Secretary Sean Spicer was quick to point out yesterday, the American Health Care Act is only 123 pages as opposed to the PPACA that is a whopping 974. That alone makes it a better law.
There will be any number of analyses published over the next week. My peers and I have received countless calls and emails about this first stab at (in) replacing Obamacare. Before we spend too much time on this, we need to acknowledge that there are serious divisions within the Republican Party and that much of this will be changed. Senators from states that expanded Medicaid have no interest in explaining to the folks back home why they lost their health care. Congressmen on the conservative fringes have had the luxury of passing bills that could never become law. They have no interest in supporting anything that might even appear to be pragmatic. So no, don’t get too worked up about the American Health Care Act. Senators like Bill Cassidy (R-LA) have already declared it DOA.
A more relevant question may be whether this is a serious piece of legislation or simply one more opportunity to pander to the Republican base. Both Congressman Brady and Congressman Ryan suggested that the public should read the law. Part of this is bluff. They are hoping that the average American’s eyes glaze over while reading the highlights on the lead page. News organizations, researchers, and the author of this blog accepted their challenge.
Let’s explore priorities. Health care is almost 20% of the U S economy. Any replacement of the PPACA would have to provide for the seamless transfer of one payment system for health care to another. Billions of dollars (and millions of lives) are at stake. So the Republican bill would have to address all of these issues thoughtfully, carefully. How did they do?
The first issue, the most important task of this legislation, appears on Page 2. Yes, before we can tackle the individual mandate, preexisting conditions, or even Medicaid expansion, the first thing we have to do is defund Planned Parenthood. The AHCA goes to great pains to describe Planned Parenthood without mentioning it by name. It isn’t till the bottom of Page 4 that we move on to Medicaid.
Much has been made of the possible changes to Medicaid. The simple explanation is that the states that expanded Medicaid would have to do more with a lot less. The real pressure points are 2020 and after which at first seems far away, but is actually less than 3 years till implementation.
Our next section dealt with the payments that hospitals receive for uncompensated care (DSH). The idea is to improve access for the uninsured and Medicaid patients. These payments were reduced due to the anticipated success of Obamacare. The goal was to have everyone insured. The AHCA reinstates the payments.
On Page 10 we arrive upon the other issue that appears to have been keeping Speaker Ryan up at night. The next 7 pages deal with preventing lottery winners from accessing Medicaid. Seven! This change should guarantee that our budgets will now be balanced.
The next few pages guarantee that states aren’t forced to pay for aliens (international or intergalactic) and how home equity loans impact Medicaid qualifications. By Page 25 we get to Medicaid funding which kills another 20 pages. On Page 45 we finally get to Subtitle D – Patient Relief and Health Insurance Market Stability, a nine year $100 billion funding mechanism to the states to expand coverage options. Finally, some meat.
The rest of the document details which taxes are to be repealed, which repurposed, and which just simply delayed till someone else is in office. The individual mandate is eliminated in favor of a different penalty for opting out of coverage. Older adults are charged higher premiums with the hope that young, healthy individuals will sign up in droves and make the system work. And, of course, there are a number of favors included to make some donors happy such as the repeal of the tanning tax and the reinstatement of the deduction for insurance executive compensation.
The media, both right and left, will hit the high points. And more importantly, most of those points will be the ones debated and changed in the weeks/months to come. I wanted to focus on the issues that the Ways and Means Committee thought were most important, the issues that they hit first. There is one other issue that I thought was unusual. Section 6, about 80 pages or so into this bill, repeals the employer mandate, the rule that forced employers with more than 50 employees to provide health insurance as of December 31, 2015. Not the end of last year. Not the end of this year. Obviously, one of the Congressmen has a very important constituent who didn’t bother to cover employees in 2016. Perhaps Chairman Brady? Gosh it is always great to know a Congressman. Heck, it is better than a poke in the eye with a sharp stick.
re: the deduction for insurance executive compensation
According to testimony broadcast on CSPAN, under Obamacare this deduction was/is limited to $500k per year for each of the top three compensated executives at each insurance company.
The testimony went on to indicate that the proposed bill would eliminate ANY limits and is estimated to reduce tax receipts by $400 million over ten years.
Guess whose back replacing this $400 million would be strapped to.
Of course, the insurance companies’ profits would increase so maybe they would be a good investment as their stock price rises on the increased earnings.
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