What Will GOPcare Change?
Obamacare, is that you?
Monday evening, House Republicans finally unveiled eight years of campaign promises in the making, The American Health Care Act.
Reviews are mixed but predictable — Democrats, hair ablaze, have morphed into screaming banshees claiming all the children will be health insurance-less.* Meanwhile, most Republicans are calling the AHCA Obamacare-lite.
What I can say is this — there better be more “replace” in the legislative pipeline if Congressional Republicans plan to use this bill as proof of the long-awaited “repeal and replace” promise.
Because as it stands now:
Obamacare vs GOP replacement pic.twitter.com/LvL39njdFc
— Sammy Rhodes (@sammyrhodes) March 7, 2017
To be clear, I’m not on the GIVE ME ALL THE REFORMS OR TAKE A HIKE train that derailed many-a-good reforms, but there’s little in the AHCA to get pumped about. If you were hoping for a bill that would move towards a market-based, patient-centered health insurance world, one where health insurance might even be disassociated from employment, join the Disappointment Club. Politically jaded welcome.
“If this bill passes, everybody would have to get their insurance either through government, their employer via tax subsidy, or be left to purchase government-designed health policies using federal subsidies,” writes Phillip Klein at the Washington Examiner.
So what does the AHCA do? A brief rundown:
Slashes Obamacare Taxes
According to the House GOP, ” Obamacare taxes that have hurt job creators, increased premium costs, and limited options for patients and health care providers— including taxes on prescription drugs, over-the-counter medications, health- insurance premiums, and medical devices.” Taxes? GONE. Well, they will be as of January 1, 2018.
• Limitation on deductibility of salaries to insurance industry executives
• Tax on tanning services
• Tax on pharmaceuticals
• Health insurer tax
• Net investment tax
• Tax on high-cost health plans (also known as the “Cadillac tax”)—but only through 2025
• Restrictions on use of Health Savings Accounts and Flexible Spending Arrangements to pay for over-the-counter medications
• Increased penalties on non-health care uses of Health Savings Account dollars
• Limits on Flexible Spending Arrangement contributions
• Medical device tax
• Elimination of deduction for employers who receive a subsidy from Medicare for offering retiree prescription drug coverage
• Limitation on medical expenses as an itemized deduction
• Medicare tax on “high-income” individuals
Axes the Individual Mandate…Buuuut imposes an uninsured penalty
This one is pretty shady. The individual mandate would get the ax. Great. No more penalty er, tax, for choosing not to purchase a product from the government. BUT, insurers can charge a 30% penalty for consumers who did not have health insurance the previous year. Better than a mandate, still crappy. I get that this is a kickback to insurers, but is it going to work?
Seth Chandler at Forbes:
The American Health Care Act revealed yesterday by Republicans promises to repeal the individual mandate right now and replace it with a provision that is supposed to prevent the insurance markets from falling into a death spiral. I’m very concerned that this substitute mechanism will not work. But it really doesn’t matter if my concerns are correct. What matters is whether insurers believe it will work. If not, they won’t play and the AHCA will be stillborn.
The substitute mechanism employed in section 133 of the AHCA requires insurers to charge purchasers a 30% “penalty” if they obtain coverage in a given year without having had coverage in the preceding year. The idea is that, in order to avoid those higher rates, individuals will be incentivized to purchase health insurance even in those years when they feel the premiums are high relative to their expected costs. No one will be forced to do so — it won’t be a tax on doing nothing like the Affordable Care Act imposed — but, if people know about the penalty, it might be fairly effective and feel somewhat less coercive.
Chandler outlines the various scenarios and problems this particular bit is likely to face. If you want to get deep into the weeds here, read his post.
Those with Pre-existing Conditions are safe
Insurers are prohibited from charging individuals with pre-existing conditions more or from refusing coverage.
Youngsters Can Still Stay on Parent Plans Until the Ripe Old Age of 26
To “stabilize the marketplace”. But this is all I have to say about that:
Creates a new $100 BILLION Fund
So this one should be fun.
Designed to provide “states with $100 billion to design programs that meet the unique needs of their patient populations and help low-income Americans afford health care.”
Creates a Patient and State Stability Fund, to be administered by the Centers for Medicare and Medicaid Services (CMS), for the years 2018 through 2026. Grants may be used to cover individuals with pre-existing conditions (whether through high-risk pools or another arrangement), stabilizing or reducing premiums, encouraging insurer participation, promoting access, directly paying providers, or subsidizing cost-sharing (i.e., co- payments, deductibles, etc.).
The $100 billion would be paid out over ten years.
Provides for $15 billion in funding for each of calendar years 2018 and 2019, followed by $10 billion for each of calendar years 2020 through 2026 ($100 billion total). Requires a short, one- time application from states describing their goals and objectives for use of the funding, which will be deemed approved within 60 days absent good cause.
For 2018 and 2019, funding would be provided to states on the basis of two factors. 85% of the funding would be determined via states’ relative claims costs, based on the most recent medical loss ratio (MLR) data. The remaining 15% of funding would be allocated to states 1) whose uninsured populations increased from 2013 through 2015 or 2) have fewer than three health insurers offering Exchange plans in 2017.
For 2020 through 2026, CMS would be charged with determining a formula that takes into account 1) states’ incurred claims, 2) the number of uninsured with incomes below poverty, and 3) the number of participating health insurers in each state market. The bill requires stakeholder consultation regarding the formula, which shall “reflect the goals of improving the health insurance risk pool, promoting a more competitive health insurance market, and increasing choice for health care consumers.”
I’m all for the federalism, but a $100 billion slush fund? What could go wrong?
This is a huge bite to swallow, but here’s the short version:
…the House discussion draft retains eligibility for the able-bodied adult population— making this population optional for states to cover, rather than mandatory. (The Supreme Court’s 2012 ruling in NFIB v. Sebelius made Medicaid expansion optional for states.) Some conservatives may be concerned that this change represents a marked weakening of the 2015/2016 reconciliation bill language, one that will entrench a massive expansion of Medicaid beyond its original focus on the most vulnerable in society.
With respect to the Medicaid match rate, the discussion draft reduces the enhanced federal match to states, effective December 31, 2019. The bill provides that states receiving the enhanced match for individuals enrolled by December 31, 2019 will continue to receive that enhanced federal match, provided they do not have a break in Medicaid coverage of longer than one month. (In the case of states that already expanded Medicaid to able-bodied adults prior to Obamacare’s enactment, the bill provides for an 80 percent federal match for 2017 and all subsequent years.)
Some conservatives may be concerned that—rather than representing a true “freeze” that was advertised, one that would take effect immediately upon enactment—the language in this bill would give states a strong incentive to sign up many more individuals for Medicaid over the next three years, so they can qualify for the higher federal match as long as those individuals remain in the program.
Finally, the bill repeals the requirement that Medicaid “benchmark” plans comply with Obamacare’s essential health benefits, also effective December 31, 2019.
If you’re looking for more, here’s an eight-page section-by-section summary of what the AHCA does to Medicare.
Health Savings Account (HSA) Reform
Yay. This is a good thing. The AHCA promises to almost double the amount allowable for contribution while broadening the scope of the HSA purchase power. Though why the government is involved in setting caps on these things at all is a question I would still like answered.
Tax Credits for Those Not Receiving Health Insurance from the Government or Employer
Sayeth the GOP:
By providing a monthly tax credit—between $2,000 and $14,000 a year—for low- and middle-income individuals and families who don’t receive insurance through work or a government program.
According to Chris Jacobs at the Texas Public Policy Foundation, “this plan replaces Obamacare’s subsidy scheme with a new costly federal entitlement in the form of a refundable tax credit”.
These tax credits are age-rated, as Jacobs summarizes:
Creates a new, age-rated refundable tax credit for the purchase of health insurance. Credits total $2,000 for individuals under age 30, $2,500 for individuals aged 30-39, $3,000 for individuals aged 40-49, $3,500 for individuals aged 50-59, and $4,000 for individuals over age 60, up to a maximum credit of $14,000 per household. The credit would apply for 2020 and subsequent years, and increase every year by general inflation (i.e., CPI) plus one percent. Excess credit amounts can be deposited in individuals’ Health Savings Accounts.
Republicans claim the AHCA will “deliver patient-centered health care” but I guess I’m missing that part of the bill. Like it or not, it looks like Obamacare, in some shape or form, is here to stay.
The American Healthcare Act by Legal Insurrection on Scribd
Follow Kemberlee on Twitter @kemberleekaye
Donations tax deductible
to the full extent allowed by law.
I wonder how many of these GOP legislators wear lingerie and panties on a regular basis. Better yet – what would each Republican congressman do if given a free lifetime prescription of testosterone hormones?
This is a typical political crap sandwich being offered, not what America said it’s wanted for the past 8 years. If this passes President Trump will suffer a hit on his base, IMO.
Trump should say right now that he will not sign.
Keep your eye on the ball. Under the new plan you are not forced to buy insurance and you are NOT forced to pay the premiums for someone else’s insurance.
Those are both big wins.
There are some wins, but it’s not a full repeal; it’s obamacare lite.
Certainly you imagine what would happen if Congress repealed Obamacare outright. Doing so would (temporarily) leave millions without any kind of health insurance at all. The insurance companies would fix that…eventually…but until they did the media would be screaming about “Republicans want children to DIE!!!” and all that. Every night there would be heart-rending stories on TV about some poor soul who got cancer and couldn’t get treatment because the “Republicans cancelled her health insurance”. Remember those ads about Paul Ryan pushing Granny in her wheelchair off a cliff? Repealing Obamacare without a replacement would be worse.
Under the current plan you are also not forced to buy insurance. You can choose to pay the tax instead.
Welcome to the new boss; same as the old boss.
It’s not like there are no good alternatives out there.
Or just kill flucking ObamaDoggle, and start with a new sheet of paper…ON WHICH you simply write stuff that deregulates and frees the markets for health insurance.
That’s the problem without having ‘none of the above’ on the ballot; these guys think we voted for them
The UniParty isn’t going to change until we vote them out and replace them.
Don’t be naive.
If you try to communicate with your “congress critter”, you won’t get through. All means of communications are overloaded.
I suspect the old fashion Union “Boiler Rooms” tactic is being employed by the left. Especially after seeing bused-in protesters at Town Halls.
Sent an e-mail to both Senator and House Rep.
I made a simple request. Send back an e-mail, stating if the MSM was lying about “constituents not being able communicate”.
Cruz has an auto-reply set up. It took six hours for the e-mail received auto-reply from Cruz to trigger. Silence from the House Rep.
Our “congress critters” are being locked into the “echo chamber”.
That’s how we got this ObozoCare replacement.
This just proves the problem with comprehensive legislation.
Just try to fix a problem at a time so that those “fixes” with unacceptable consequences can be revisited by themselves. In the meanwhile repeal as much of Obamacare as possible, replacing it with nothing but the status quo ante and let the rest of it collapse from its own dead weight.
CHANGE? Oh, you wanted change?
You didn’t say that. You said “REPEAL” and then you said “REPEAL AND REPLACE”. Which you are getting. You never said “CHANGE”. Did you? Because the powers-that-be were listening.
Maybe you could list off all the elements you want in “CHANGE” for them. So they can, you know, produce “CHANGE”.
The CHANGE I want – Not having to pay for someone else’s insurance too. Everything else can stay the same.
If the new system does not make you pay for your neighbor’s Insurance (like ObamaCare does) it is a MAJOR IMPROVEMENT.
Even if everything else stays the same.
With all due respect, please go read the definition of “INSURANCE”. Because it specifically stipulates that purchasers pay for the costs of others.
It’s not government. It’s built right there into the definition of insurance.
Close, but no.
What insurance does do is pool RISK, not costs. Your premiums are (with actual insurance) predicated on the actuarial risks you are considered to pose to the pool, and charged at accordingly.
You are NOT paying for other people’s insurance. You are paying for the aggregated risks of the pool, along with administrative costs to the insurer and a return on their investment.
Peeps. Let’s try to differentiate between HEALTH CARE and INSURANCE.
You are not paying for someone else’s insurance. You are paying for someone else’s health care (by buying insurance).
Not quite correct – we are still just paying for insurance which, after premiums, deductible and co-insurance, may pay for the price of seeing a doctors or being in the hospital. Under the current ACA, the “free stuff” is birth control and certain annual health visits.
In many instances, the expense of paying for the premiums means that many people are not going to the doctors because they cannot afford the deductible and co-insurance. And, some things which I consider to be part of health care (dental and vision) are extra expenses to me.
The only benefit that I am getting my insurance is the “free” annual exam as well as discount rates for being a Blue Cross policy holder. Don’t forget that there are retail prices for health care and each payer (Medicare, Medicaid and the big insurance companies) negotiates for their deep discounts. The self pays have to go for the full price since there are no 50% off sales in health care.
A very successful surgery center in Oklahoma City lists their prices on line and only takes cash. They cut out a lot of the extra departments and layers of management.
Another Rube Goldberg solution brought to you by the world’s greatest problem solvers – government. Maybe the thing they need to focus on is that they never should have gotten involved in the first place. This is and always has been a free market issue that can only be “solved” by – you guessed it – the free market.
One thing is clear, the trolls are out in force slandering this bill. Sure, it’s not everything we wanted, but it’s a start. We all have to remember that this is a Reconciliation budget bill designed to avoid the filibuster in the Senate. The bill can’t include other necessary things like tort reform, clarification of EMTALA, repeal of McCarran-Ferguson, repeal of the law preventing physicians from owning health care facilities, etc, etc. Have a little patience, folks.
We’ve been trying to repeal ObamaCare for eight years without success. Now is the best shot we have at repeal and the GOP is going to throw the opportunity away.
If the GOP doesn’t have the votes, it’s best we know now so we can formulate plans for the next election.
Just curious, but what do you base the concept that “this is a start” on? What indication is there that the GOPe, having saved as much of Obamacare as it can and put Republican names on it so that Republicans can be blamed, will do anything else? They will have achieved their goals with this bill.
Excellent article, Kemberlee. You gave us lots more information than any of the major media outlets. Thanks!
Purchasing insurance across state lines?
Yes! Why does this always get the axe at first round of negotiations???
It’s hard to say that you are for state control of things and then jerk the insurance control away from the states.
For example, my state required “free” mammograms. So, my rates went up to cover that and men were also required to pay the higher rates without getting the “benefit”.
Even if you are with a large company that pays your health insurance premiums with a national company, the insurance company is still dealing with 50 “plans”. They are just burying the cost in the administrative line of the contract.
If the Feds outlaw state insurance regulations (they don’t have the power in the first place) they will replace it with their own regulations. Today, I can move out of a state with awful regulations. If the Feds write the worst regulations imaginable, here will be nothing anybody can do to avoid it.
While you are technically correct, you can’t live in fear of regulations.
The current political movement seems to have gained momentum based on deregulating many sectors. Health care is one of those. Deregulating state controls shouldn’t necessarily lead to increased fed controls, in fact, if the states can’t do it then the fed definitely shouldn’t be able to (at least that WAS the Constitutional way at one point).
The whole purpose of Obamacare was to drive healthcare into a single payer, government run system by making private insurance unaffordable. That is what the Establishment wanted and what all of the Establishment politicians, both Democrat and Republican wanted. So, the Establishment GOP Congressmen have taken Obamacare and shifted the insurance requirement penalty and government subsidies to private individuals around, without eliminating them. And, it does nothing to further competition within the insurance industry. In this regard, it is still Obamacare.
But, it gets worse. The federal contribution to expanded medicaid was supposed to be reduced every year and finally disappear in 2020. Now, it remains in place, at 80% of the federal contribution. As noted this is merely an incentive for states to enroll greater numbers of people in a government run health insurance program.
There is no change in this bill. It is till designed to accomplish the same major goal of Obamacare, eliminating private health insurance and forcing people into a government run and funded healthcare system.
They need to simply repeal the whole damn thing and let the markets find or not find a replacement.
This is supposed to be Capitalism.
The insurance companies need to offer products that are attractive to both patients and healthcare providers. If they are not able to, then they should get out of the way.
Dad says he isn’t going to give you a whooping anymore and he promises for years that he’ll stop. Now, he’s going to contract the whoopings out.
The beatings will continue, until morale improves.
I need to dig out my contract, but I do know that if I stop paying the premiums, I lose the coverage.
What I don’t know is if the ACA is repealed in total, would that give the insurance companies the ability to cancel policies mid-year or would they just wait to the end of the year and cancel everyone? Then, they set up new policies with new premiums and networks and get people into different risk pools.
Do you all remember the auto ads that have the people complaining about reading a short contract? How about them trying to read and understand a longer health insurance contract? How many people read and print out the agreements and privacy info for any software that you get?
Designed to provide “states with $100 billion to design programs that meet the unique needs of their patient populations and help low-income Americans afford health care.”
So that $100 BILLION slush fund will go to cover, what exactly? Half of California?
Here’s a hint to the GOP: They still won’t vote for you.
TEXAS PUBLIC POLICY FOUNDATION: Summary of House Republicans’ Latest Obamacare Legislation.
• This plan fails to repeal most of the costly mandates and insurance regulations driving up premiums and deductibles
• This plan replaces Obamacare’s subsidy scheme with a new costly federal entitlement in the form of a refundable tax credit
• This plan leaves significant portions of the flawed and costly Medicaid expansion intact by delaying the freeze on Medicaid enrollment, maintaining the expansion of the program to the able-bodied, and providing a pathway for non-expansion states to accept enhanced federal dollars.
Other than that, what did you think of the bill, Mrs. Lincoln?
—Stephen Green, InstaPundit
Oddly, “trolls” who are not T-rumpian suckers universally don’t find it all that swell.
Quite the opposite, in fact.
“Oddly, “trolls” who are not T-rumpian suckers universally don’t find it all that swell.”
Typical baloney. It’s a GOPe plan. And it sucks.
Trumps “plan” or additions might be marginally better. We are not going to get a free market plan. Not with the GOP we currently have.
Nevertrumpers / “conservatives” have done nothing but blather on.
This is the GOPe plan. And, no plan is going to make it through the Congress unless it is essentially the same plan as Obamacare. Trump and his advisers know this. That is why there is NO Trump plan on the table. If the Congress passes a new insurance plan, Trump may or may not sign it. If he does veto it and the Congress enacts it, over his veto, the Republican Congressmen will own it, not Trump. And, if the final bill looks anything like this one, Trump’s base will support his veto.
This plan does nothing to mitigate the problems inherent in Obamacare and, in fact, aggravates them. We’ll have to see what the final product looks like. But, I doubt that most conservatives will like it.
” If the Congress passes a new insurance plan, Trump may or may not sign it.”
Oh, he’s going to sign it as presently described. The real changes will be after Obamacare is killed.
My own opinion, it will be better than what we have, eventually, and it will not be what I desire. I also know this congress and president will never pass the legislation I desire.
This bill does NOT repeal Obamacare. Not even close. All the regulations, death panels, and federal overreach still fully in tact. No buying insurance across state lines, government still mandating what must be covered, no tort reform, etc.
What the Freedom Caucus is about to find out is that once the public receives an entitlement, it is all bu impossible to take it back. They can jump up and down but without the fine/tax under obamacare, it simply is not affordable. If they could make everyone buy their own insurance just like we all do with our autos, and give the same tax break that the big corporations get buying their employees health insurance, then the products would be what people could afford or want. Do you want total value replacement on your car? Do you want $1,000 deductible? Do you want zero deductible on windshield replacement? We all know our options with our cars. But look at obamacare and how it forced down our throats coverage that we will never use. Health insurance has to be commercial and has to be the same choices for all, just like car insurance.The amount of coverage is up to you and your wallet just like everything else in our lives is. It cannot be a right because it takes another person to provide it.
Government programs are immortal, and eternal.
You can’t fix stupid.
This bill is a complete disaster. I am very surprised Trump agreed to support it. This bill does nothing to drive premiums and deductibles down. More importantly it does NOTHING to stop the current death spiral. That means if GOP are stupid enough to pass this, the Healthcare death spiral will continue but the democrats, the media, and the voters will all blame tge republicans for it.
How many times have we seen the GOP ride in at the last minute to save the democrats and yank defeat from the jaws of victory.
Trump needs to fire Reince and Price. He needs to stop talking to Ryan and he needs to start having daily briefings with Rep. Dave Brat.
Trump needs to force a a full repeal with no replacement. Make the repeal effective in 1 year. That gives the GOPe a full year to come up with Obamacare 3.0.
Oh and one more thing. The freedom caucus should file a motion to vacate the chair.
MEGAN MCARDLE: The Republican Plan Is Even Worse Than Obamacare.
I haven’t read a single conservative or libertarian say one good damn thing about this RINOcare stupidity.
It’s ALLLLLLLL politics, and no guts.
“It’s ALLLLLLLL politics, and no guts.”
Having now wasted several hours reading the plan for myself, it is clearly just that. I would not say it is worse than Obamacare, but is not an improvement. It is not what was promised.
I know that there will be a bloodbath if it DOES pass.
This was not what we were promised. Not from anyone.
Kevin Brady is my congress-critter, and a known liar. This is an outrage.