President Donald Trump ran aggressively to repeal and replace the Affordable Care Act, which has come to popularly be referred to as “Obamacare”. In fact, on Donald Trump’s campaign website, his four page healthcare proposal proclaimed, “On day one of the Trump Administration, we will ask Congress to immediately deliver a full repeal of Obamacare. “
So the Republican led Energy & Commerce and Ways & Means committees have passed their respective healthcare reform bills down party lines last week. Their combined efforts have culminated into a legislation dubbed “The American Healthcare Act” and it is now viewable online at www.readthebill.gop.
As written, the current legislation is a far cry from the “full repeal” of the ACA promised by the administration. In fact, the Republican’s full strategy to implement a replacement actually uses many of the provisions passed by the previous administration.
Republicans might be able to erase Obama’s name from their new healthcare law, but the shadow of his influence still very much remains if the law is passed without any changes.
What influence? The Obama administration has successfully changed the conversation. In 2008, the debate was about the following:
- Will we cover pre-exisiting conditions?
- Will dependents up to age 26 be able to enroll on their parents plan?
- Will we eliminate lifetime caps and limits?
- Will we have a vehicle to enroll into healthcare plans nationally online?
- Will we provide financial assistance to low income individuals to purchase health coverage?
Nearly 10 years later, Republicans are guaranteeing all of these provisions at their town hall meetings and only discussing ways to make them more patient centric using market forces verse government control.
Effectively, on the road to healthcare reform, the American people are now witnessing a debate between Republicans about what color to paint the car, not whether or not if a car is the right form of transportation to get to universal access.
Thus, this legislation is RINOCARE: Repeal In Name Only.
Here are the 3 reasons why:
Reason 1: Republicans plan to use the language inside the ACA to deregulate the market.
Congressman Paul Ryan rolled out the details of the American Healthcare Act at a press conference last week. During that roll out he eluded to using the enormous power given to the Secretary of Health & Human Services to regulate the healthcare market. Those powers were established through the passing of the ACA. Rather than repealing those powers, the Republicans plan to use them in order to deregulate the market. Specifically, there are 1,442 sections or instances that give the Secretary discretion on how to administer the health care law.
Reason 2: There are many provisions that are either maintained or tweaked.
The framework of the ACA will stay in place even with the passing of this law.
Financial Assistance – The law switches financial assistance from income based to a fixed dollar amount based on age. Eligibility would be limited generally to individuals who do not have access to government health insurance programs or employer-sponsored coverage. Additionally, the law actually expands the income levels eligible for the financial assistance. Today, the ACA stops financial assistance at 400% of the federal poverty level (Roughly $45,000/per person). Under the Republican led legislation, the tax credits are eligible for Americans who earn up to $75,000/ per person and are adjusted by age:
- Under age 30: $2,000
- Between 30 and 39: $2,500
- Between 40 and 49: $3,000
- Between 50 and 59: $3,500
- Over age 60: $4,000
Individual Mandate – While the bill removes the individual and employer mandates, it actually implements a new rule in its place, that becomes a a stronger economic incentive to not only buy insurance but stay enrolled. Health plans can charge a 30% late-enrollment surcharge for consumers who have a gap in coverage that exceed 63 days. So while there is no longer a penalty for not having insurance, there is a surcharge for buying insurance two months after letting it lapse.
Patient Protections – This bill will still allow patients to purchase insurance with pre-existing conditions. The law bans lifetime limits and caps, and allow dependents to enroll on their parent’s plan up to age 26.
Market Protections – The Affordable Care Act needed to create a series of market protections to keep the Health Insurance plans in the market. Those protections included (1) risk adjustment, (2) reinsurance, and (3) risk corridors. All of these provisions provided funding and/or protections for health plans that enrolled sick patients by limiting their financial exposure. Coincidentally, under different names, those mechanisms appear to occur in this new legislation. Dubbed the “Patient and State Stability Fund”, federal funding set at $15 billion annually in 2018 and 2019 and $10 billion annually from 2020-2026 will be provided to states that can use these funds for a wide range of programs to lower patient costs and stabilize insurance markets. The law also calls for a “Default Federal Safeguard” that would allow CMS to use the funding to establish a reinsurance program with health plans in states that opted against the Medicaid expansion.
Reason 3: There is no BIG idea in this new legislation.
Congressman Ryan mentions this law is the first of three steps to replace the Affordable Care Act. The next two steps will be to use administrative action by the HHS Secretary to deregulate the market followed by passing individual bills to enhance the law (ie: buying insurance across state lines). However, at the macro level, this bill does not introduce anything that changes the way healthcare is delivered in the United States in any big way. The U.S. spends more than any other country in the world on healthcare and does not have the quality, lower morbidity levels, or the universal access to coverage to show for it. That is mainly driven by a system that rewards volume over value. The ACA introduced small pilot programs to try to change this dynamic (ie: Accountable Care Organizations). However, in the 6 years since the ACA has launched, it has not changed the way we finance healthcare demonstrably. If Republicans are serious about taking advantage of this opportunity to fix the healthcare market – this legislation or the ones to come from the Republican Party should be big and bold. It should change the way we deliver care. Here are some specific examples:
- Alter Federal funding to States for Medicaid based on state uninsured rates and nationally accepted quality metrics.
- Create a national benchmark for “true” essential health benefits tied to federal funds that only cover those minimum standards.
- Rather than penalties – provide tax incentives or earned income tax credits for not only buying health coverage but practicing healthy behaviors.
It is very disingenuous to refer to this law as “Repeal and Replace.” It is more of a “Revise & Rebuild” plan attempting to rename liberal programs with Republican ones under the guise of free-market principles. Additionally, the President’s Press Secretary compared the length of the Republican bill to the much longer ACA. One of the reasons the bill is so few pages is because it is built upon current healthcare law, much of which was passed under the ACA.
Lastly and ironically, a President that became a billionaire by putting his names on tall buildings has been reluctant to put his name on this so called Repeal and Replace legislation that will do away with the very thing that got him into the White House.