GOP right, Democrats wrong on healthcare plans

Thursday's passage of AHCA legislation essentially repeals the current Obamacare law via a "repeal and replace" update that greatly benefits the majority of Americans.

Cartoon by Branco. (Reproduced with permission, see below*)

WASHINGTON, May 5, 2017 – The House of Representatives narrowly passed the American Healthcare Act (AHCA) Thursday. The AHCA package essentially terminates the current Obamacare law via a “repeal and replace” update that greatly benefits the majority of Americans. It still requires passage in some form by the Senate and the signature of the President, however, before it becomes the new healthcare law.

Unfortunately, it does not appear to benefit the sickest and lowest income Americans. For that reason, Democrats claim the GOP owns healthcare and that ownership will lead to GOP losses in future elections. “Bye, bye” the Dems chanted in the House after the legislation passed.

The reason for such extremely partisan views on healthcare is that each party has different priorities. The Affordable Care Act (ACA, aka Obamacare) which is currently the law, places the uninsured, the sickest and the lowest income earners as its number one priority. As such, supporters often tout that the ACA increased the number of insured Americans by 20 million people, about 6% of the population.

In order to keep the costs down for the sickest Americans and for the elderly, young healthy people were forced to buy health insurance whether they thought they needed it or not. The young also would pay higher premiums to offset the cost for the sick and elderly.

To insure coverage through employment, the ACA also mandated that all employers with at least 50 employees offer to pay for health insurance for their workers or face a $3,000 per person per year fine. Additionally, starting in 2018, any American who purchased a comprehensive, “Cadillac” healthcare plan would have to pay a tax equal to 40% of the plan’s cost. That could mean some Americans could end up paying up to $40,000 per year or more for healthcare insurance and the tax, in order to adequately insure their families.

Under ACA, the money from higher income earners was used to pay the premiums for those with pre-existing conditions, those between 23 and 26 who remain on their parents plan and those low-income earners.

The ACA, however, has proven to be a genuine disaster. Even though it did help 6% of the population (the 20 million Americans who gained health insurance) it resulted in much higher premiums for everyone else, greatly higher deductibles and the loss of long-term doctor/patient relationships for the 85% of Americans who were generally satisfied with their healthcare coverage prior to the ACA passage.

In other words, the Democrats’ priority when they passed the ACA without a single Republican vote in either house was to help the neediest 10% of the population while re-distributing income from the highest income earners to the lowest income earners. The demands placed on small business by Obamacare severely limited economic growth and job expansion, which help explains why the economy has averaged about 2% annual growth since 2010.

The GOP wants to fix this. The AHCA begins to do just that. It removes the requirement that all people purchase comprehensive health insurance. It removes the requirement that employers pay for health insurance for all employees. It also shifts the cost away from young people who generally spend little to nothing on health care and more toward those who actually use the health care.

While it is true that the number of Americans with health insurance will likely fall under the AHCA, this is mostly because young people will choose to pay out of pocket for healthcare. For the vast majority of individuals and families, however, under the new law, insurance would be far less costly so the majority of Americans will benefit. Under the AHCA, Americans will see more choices, better options and lower cost.

The GOP plan places the majority of Americans as its top priority. The plan then provides for those with pre-existing conditions by allowing each state to choose their position on the issue. In states that opt out of the pre-existing condition feature, the federal government would provide an opportunity for coverage. And the new plan still allows children otherwise without coverage to stay on their parents’ plan until they are 26.

Currently, insurance companies are leaving the ACA exchanges in droves, leaving some Americans with only a single choice for health insurance and others with no choice at all. While the ACA may have looked good when initially proposed, it is clearly failing and must be changed before it entirely collapses, a situation that appears to be imminent. In this regard, AHCA is a good first step, though more will need to follow if and when some form of AHCA manages to get through an equally hyperpartisan Senate.

Democrats are right: the GOP will own health care after this bill is passed. That’s OK with them, because when the improvements are implemented, Americans will be glad that the GOP was courageous enough to fix the Obamacare mess instead of letting the ACA fail entirely, potentially leaving many Americans with no coverage or coverage option at all.

In other words, that “bye, bye” chant should be directed at the Democrats, not the GOP.

*Cartoon by Branco. Reproduced with permission and by arrangement with LegalInsurrection.

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