At 4:15 am on Thursday, the Republican-led House Ways and Means Committee passed a plan to repeal and replace Obamacare (23-16). Now, the legislation needs to pass through the House Budget Committee, a vote in the House of Representatives, and a budget reconciliation process in the Senate, before it can be signed by President Trump.
The Republican plan, the American Health Care Act (AHCA), aims to:
- Scrap the mandate to buy health insurance and instead allow insurers to increase rates by 30% on people who have gaps in coverage.
- Cut down on tax credits for the individual market and require that remaining tax credits cannot be used any plan that covers abortion.
- End Obamacare's Medicaid expansion in 2020 and eliminate the section of Obamacare that requires Medicaid to cover treatment for mental health, addiction, and several other benefits.
- Keep some popular parts of Obamacare, like barring insurers from denying coverage based on pre-existing conditions, banning lifetime limits on health care spending, and allowing young people to remain on their parents insurance until 26.
- More in the plan itself.
Why is it important?
Millions of Americans could lose insurance under this new plan. Millions more could find health insurance harder to afford.
This debate also represents a historic shift: As a country, we're debating how the federal government should ensure Americans can get affordable insurance as opposed to whether the government should have a role in health care at all.
Legislators on both sides realize the political ramifications for removing health insurance from their constituents. And 60% of American citizens believe the government should be responsible for ensuring health care coverage for all Americans—the highest share in nearly a decade.
Should Congress pass the American Health Care Act?
The AHCA is a windfall tax break for the wealthy, at the expense of affordable care for everyone else. It fails to address Obamacare's main shortcoming; the AHCA does not reduce health care costs.
From a Trump-supporter's perspective, this bill is a betrayal of clear campaign promises. During his campaign, President Trump repeatedly pledged not to cut Medicare and Medicaid and promised "insurance for everybody" with "much lower deductibles." These Trump supporters will be hit the hardest by this irresponsible bill.
This bill leaves nearly every American with less. To quote Vox's Matt Yglesias, "the centerpiece of the Trump-endorsed American Health Care Act is a $600 billion tax cut. Families with incomes below $208,500 per year will see their taxes fall by an average of $0 per year, receiving none of that money. But members of the top 0.1 percent of the income distribution—households with an annual income of more than $3.75 million—will see their taxes fall by an average of $165,090 per year."
"When you take $600 billion out of the American health care system and funnel it to a small elite group of people, the inevitable result is that everyone else has to get by with less."
In this case, less means between 6 and 15 million people who will lose their health insurance. We don't even know how many will be affected yet, because Republicans voted on the bill without estimates from the Congressional Budget Office. They won't like what that nonpartisan report will say about this bill.
And insurance will be worse for those that keep it: Banning the few remaining tax credits from being used for plans that cover abortion, for example, will make an important personal decision more difficult and expensive to navigate. And removing the requirement to cover mental health and addiction treatments will damage the fight against the opioid epidemic and make it harder to receive these crucial services.
Finally, this bill could lead to a death spiral; without the individual mandate, healthy people will leave the market and drive up the cost of insurance for the (sicker) people who remain. We cannot allow it to pass.
This bill is a positive step forward for health care reform.
With premiums increasing by 25% per year, one-third of all U.S. counties with only one insurer offering plans on their state’s exchange, and 34% fewer health care providers accepting Obamacare versus private insurance... we need to make the most of this opportunity for reform, for the sake of all Americans and the sustainability of our health care system.
It's understandable that people involved on both sides have issues with a bill that is still very much in draft form. As former Congressional Budget Office Director Douglas Holtz-Eakin put it, "any bill designed to achieve 218 votes in the House and 51 votes in the Senate is going to generate some dissatisfaction for all involved."
However, the current version of the AHCA would already improve American health care in several ways. At a general level, Holz-Eakin writes, "the AHCA moves decision-making to the grass roots by providing funding, but permitting states flexibility in how to deal with costly preexisting conditions, provide reinsurance and other stop-loss protections that permit insurers to function effectively, and trusting state insurance regulators to run their markets."
With respect to Medicaid, for example, this shift toward state-level flexibility will allow the kind of customization that Medicaid will need to be sustainable long-term.
The AHCA preserves important, popular elements of Obamacare—like the ability to stay on your parent's insurance until you are 26 years old, the prohibition of lifetime limits on the amount an insurer will cover for health care, and the ban on discriminating against you if you have a pre-existing health condition. To put it bluntly, other Republican plans may not be so generous.
In place of a loathed Obamacare mandate—and related penalty for not buying insurance—the AHCA incentivizes people to maintain insurance with an allowed 30% increase for insurance after a lapse. It's the carrot, not the stick, and American families will benefit from making smart health care decisions as a result. This bill represents a chance for change—and we need to take it.
- The bill itself, the American Health Care Act
- "As President Trump said during his Joint Address, “Action is not a choice—it is a necessity.” House Republicans are taking action this month to provide relief and deliver patient-centered health care."
- Vox's story stream on the health care fight
- "House Republicans revealed the American Health Care Act, their plan to repeal and replace Obamacare, on Monday night. Official estimates for how much it will cost and how many people it will cover aren’t yet available. But S&P’s analysis found about 6 million to 10 million people will lose health insurance if the bill passes, including 2 million to 4 million currently enrolled in the individual health insurance market, and 4 million to 6 million currently enrolled in Medicaid. That adds up to about a quarter to half of the 22 million people who’d lose insurance if Obamacare were just repealed with no replacement."
- Pew on Americans' changing views on health insurance
- "Currently, 60% of Americans say the government should be responsible for ensuring health care coverage for all Americans, compared with 38% who say this should not be the government’s responsibility. The share saying it is the government’s responsibility has increased from 51% last year and now stands at its highest point in nearly a decade."