After weeks of expectations — actually, nearly seven years of expectations — House
Elements of the proposal, which was kept under lock and key last week — have been dribbling out for a few days. The text of the bill encompassing the GOP plan validates much of that reporting. On the whole, however, it's a nastier, more consumer-unfriendly proposal than even close followers could have expected.
The House GOP, in a written statement, cloaked this plan with a bodyguard of outright deceit. "What we're proposing will deliver the control and choice individuals and families need to access healthcare that's right for them," the statement said. House Speaker Paul D. Ryan (R-Wisc.) said the measure would "drive down costs, encourage competition and give every American access to quality, affordable health insurance." Curiously, the GOP statement says the plan embodies "President Trump's proposed healthcare reforms," although the president has never advanced a coherent set of proposals.
The truth is that the GOP measure would destroy the ability of millions of Americans to access any healthcare worth the name. The
Reporters and experts will be poring over the new draft for days, but here are some key elements gleaned from a first reading. Further examination undoubtedly will unearth more issues with the bill. The chances are almost nil that closer examination will find much, if anything, good about it.
The proposal defunds
The bill effectively shuts down private health insurance coverage for abortion. According to a House Ways and Means Committee digest, the measure forbids spending federal tax subsidies on health plans that include coverage of abortion, even if the customer doesn't get an abortion. This would dramatically shrink working Americans' access to insurance-covered abortions, or would lead to insurers dropping abortion coverage from their plans, or both. Customers could buy separate policies to cover abortions, but couldn't use the federal subsidy to help pay for them. Insurers likely would charge hugely discouraging premiums for such policies, as the market for them would be tiny.
The individual and employer mandates are eliminated. They're not repealed exactly, but the penalties are repealed, which amounts to the same thing. Without a requirement that individuals carry health insurance, the insurance markets are almost certain to collapse. The repeal is retroactive back to the beginning of 2016, but the real problem is in the market starting this year. Individuals would be able to drop their coverage immediately, which will wreak havoc with the market starting right now. Aetna's chairman and chief executive, Mark Bertolini, said recently that the individual market was entering a "death spiral" in which healthier customers dropped coverage, leaving sicker customers who know they need insurance facing ever-increasing rates. This provision will do much to guarantee that will happen.
Essential health benefit rules are repealed. As of Dec. 31, 2019, ACA rules that required qualified health plans to provide hospitalization, maternity care, mental health services and other benefits would be sunsetted at the federal level. States would have the authority to set them instead. The impact on private, non-Medicaid plans would therefore vary by state. If a state removes maternity benefits, for example, that's likely to make maternity coverage, among other services, immensely expensive, if available at all.
Income-based premium subsidies would be replaced by age-based subsidies, which will hurt working-class families in many states. Under the ACA, subsidies to help individual buyers afford premiums and (for poorer households) deductibles and co-pays were based on household income. The GOP measure will base them on the buyer's age, instead, with older buyers receiving more help than younger. The GOP plan limits subsidies to $4,000 per individual; under the ACA, which also keys subsidies to the cost of benchmark insurance plans in the buyer's home market, the subsidies theoretically could be several times higher. No family could receive more than $14,000 in subsidies, and no more than five family members could be eligible for subsidies.
As we reported last week, this scheme would reduce subsidies to many of the people who need them the most, while awarding them to recipients who don't need them. "People who are lower income, older or live in high-premium areas would be particularly disadvantaged," the Kaiser Family Foundation observed after examining an earlier draft. The new draft retains those features. Some modest means-testing of the subsidies — an idea tossed around within the GOP caucus last week to quell complaints that the change would make the rich richer — appears to be incorporated into the fiscal provisions of the proposal.
The Medicaid expansion is killed. As of Dec. 31, 2019, the Medicaid expansion is repealed. Traditional Medicaid will be block-granted, a system almost certain to result in less federal funding for the joint state-federal program than it would have received, over time. The neediest and sickest Americans will increasingly be on their own, as states get less federal help to provide them with medical services.
All of Obamacare's taxes are repealed, another boon for the rich. Everything from the tax on tanning salons and medical devices to the surcharge on high-income taxpayers will be gone. As we explained earlier, this amounts to an enormous tax cut for the wealthy — at least $346 billion over 10 years, every cent going to taxpayers earning more than $200,000 ($250,000 for couples). The proposal would sharply raise the limits on contributions to tax-advantaged Health Savings Accounts — another gimme for the rich.
The tax repeal, the Brookings Institution has reported, will make it impossible to pay for any Obamacare "replacement" — which still isn't on the horizon. It also will exacerbate the fiscal problems of Medicare, by hastening the exhaustion of the program's trust fund by four years, to 2025.
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8:23 p.m.: This post has been updated to clarify the elimination of minimum essential benefits.
5:29 p.m.: This post has been updated with more details about the GOP bill.