The replacement plan for the existing Affordable Care Act, called the American Health Care Act, has been rolled out by Paul Ryan, the Republican speaker of the House of Representatives. It is abundantly clear that it is an assault on the poor that the main winners are the rich, particularly the very, very rich. This plan has enabled Ryan to finally unleash his inner Ayn Rand, of whom he is an ardent devotee and his love for whom he has tried to conceal up to now.
The Congressional Budget Office (CBO), the office that ‘scores’ congressional bills to estimate the costs and consequences of proposed legislation, has produced a devastating report about the large number of people who would lose health insurance as a result.
CBO and JCT [Joint Committee on Taxation] estimate that, in 2018, 14 million more people would be uninsured under the legislation than under current law. Most of that increase would stem from repealing the penalties associated with the individual mandate. Some of those people would choose not to have insurance because they chose to be covered by insurance under current law only to avoid paying the penalties, and some people would forgo insurance in response to higher premiums.
Later, following additional changes to subsidies for insurance purchased in the nongroup market and to the Medicaid program, the increase in the number of uninsured people relative to the number under current law would rise to 21 million in 2020 and then to 24 million in 2026. The reductions in insurance coverage between 2018 and 2026 would stem in large part from changes in Medicaid enrollment—because some states would discontinue their expansion of eligibility, some states that would have expanded eligibility in the future would choose not to do so, and per-enrollee spending in the program would be capped. In 2026, an estimated 52 million people would be uninsured, compared with 28 million who would lack insurance that year under current law.
Just think about it: an additional 24 million, about 7.5% of the entire US population, is going to lose their health insurance, over and above those who already do not have it. In fact, an internal White House analysis predicts that even more people, 26 million, will lose coverage. Many of these people are going to be rural and poor or middle class and not part of the wealthy elite and are thus expendable, even if many are Trump and Republican supporters.
You can expect the Republicans to tout the reduction in the budget deficit of the plan. The estimated cost savings of $337 billion over ten years is because the government is going to reduce Medicaid spending, reduce the subsidies that made health insurance affordable to many by making the subsidies smaller and age-dependent rather that income-dependent, and eliminate the taxes on the very wealthy that were used to pay the higher subsidies under the current plan. As the CBO report says:
The largest savings would come from reductions in outlays for Medicaid and from the elimination of the Affordable Care Act’s (ACA’s) subsidies for nongroup health insurance. The largest costs would come from repealing many of the changes the ACA made to the Internal Revenue Code—including an increase in the Hospital Insurance payroll tax rate for high-income taxpayers, a surtax on those taxpayers’ net investment income, and annual fees imposed on health insurers—and from the establishment of a new tax credit for health insurance.
This article summarizes the winners and losers.
Those earning higher salaries stand to benefit the most from the Republican bill, which lifts two taxes levied on the wealthy under Obamacare. In fact, single filers making as much as $115,000 will benefit from a tax credit in 2020, according to a recent Kaiser Family Foundation report. Under Obamacare, a person could only earn up to $50,000 and still receive a subsidy in 2020. Under the Republican plan, the top 1% – those earning more than $699,000 annually – would enjoy an average tax cut of $33,000, according to the non-partisan Tax Policy Center.
The new plan would roll back much of the provisions put in place to protect low-wage earners under Obamacare. It would mean significantly higher premiums and reduced tax credits for middle and low-income earners.
Kevin Drum summarizes the basic features of the existing ACA and explains why the new proposal, with its elimination of the individual mandate that required everyone to get insurance, coupled with the continued requirement that insurance not be denied due to pre-existing conditions, risks completely destroying the individual health care market because of the following scenario playing out.
- Young, healthy people leave the market because they’re no longer required to get insurance.
- Poor people of good or average health leave the market because they can’t afford coverage with only skimpy subsidies.
- Even if they have to beg, borrow, or scrimp, sick people will all sign up and insurance companies will be forced to accept them.
- With a pool full of expensive, sick people, and not much of anyone else, insurers will lose massive amounts of money.
The Center on Budget and Policy Priorities has done a state-by-state impact analysis and it turns out that there are going to be wide differences in individual affordability depending on the state. The people of Alaska, one of the reddest of red states, are going to be, by a wide margin, the biggest losers under the new plan. Indeed the top 13 loser states all voted for Trump and the Republicans.
John Oliver also provides an excellent summary of all that is wrong with the Ryan health care plan.