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Editorial: GOP–Heartless and reckless?

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Posted on March 9, 2017 |
By Angelo S. Lynn



Initial reports of the GOP’s replacement of President Obama’s Affordable Care Act has ranged from the Washington Post’s characterization of it being “heartless and reckless,” to Republican conservatives vilifying it for being fiscally irresponsible, to Trump labeling it as ‘unbelievably fantastic, so much better than the ruinous Obamacare,’ or something so similarly outrageous that no one takes him seriously.

Putting the partisan rhetoric aside, American taxpayers will now have the benefit of comparing the two plans. Assuming there is some familiarity with the Affordable Care Act (ACA), here’s the basic framework of the GOP proposal:

• The GOP bill would repeal many of the taxes imposed on the very-wealthy, on health-related insurance companies, and on pharmaceutical and medical device companies imposed by the ACA. Specifically, the GOP plan gives a $600 billion tax cut that largely benefits the top 1 percent — but does not have a plan to replace that funding. The GOP, after seven years of working on their health care plan, says they are still “discussing details” about how to pay for it.

• The GOP plan would continue the Medicaid expansion under the ACA for the next three years (after the 2020 election), before cutting the program by capping its per-person cost, instead of committing resources to meet the need as it does now. The federal cuts to Medicaid will pressure states to either cut services or raise state taxes to cover the medical cost of those people most in need. That’s another federal cost shift to the states, courtesy of the GOP plan.

• The proposal will also reduce the subsidies for poor people to buy coverage on the individual insurance market, creating what some have called a “death spiral” that could render the individual marketplace unworkable.

In comparing the two plans, what Americans will learn is that Obamacare initiated significant progress in the nation’s health care system, including covering youth up to 26 under their parent’s plan; preventing insurance companies from discriminating against people with pre-existing conditions; and not allowing insurance companies to charge older people more than three times as much as younger ones. (The GOP bill keeps the first two provisions, but allows insurance companies to charge older people up to five times more than younger people, putting more of the health care burden on the very sector that most supported Trump — older, white men and women.) What they’ll also learn is that the ACA was based on a simple Robin Hood principle of taxing the wealthy to subsidize health insurance for the poor and the sick. It did that by expanding Medicaid for households making up to 138 percent of the federal poverty level: $16,643 for an individual, or $33,948 for a family of four for the states that chose to do so; and by making the individual insurance markets work for people regardless of their age or health. Millions more Americans now have health care insurance.

To do this, it also forced some measures on the pubic that conservatives disliked, for instance, making people pay a penalty if they don’t buy health insurance. (They did this to prevent people from driving up premiums for everyone by waiting until they’re sick to get covered.) And it imposed modest taxes on the top 1 percent to help pay for the increased coverage.

We understand that Republicans don’t like entitlements and don’t like the taxes needed to fund them, but the GOP plan will run into plenty of opposition, as well. Conservatives already don’t like the GOP plan because it codifies tax-credit subsidies as a new entitlement; Republican governors won’t like it because it cuts Medicaid and they’ll be faced with raised state taxes; and Senate Republicans are wary of any plan that would make 6 to 10 million people lose their health insurance, as the GOP plan would do. And for GOP leaders, it’s hard to deny that the Affordable Care Act has improved the lot of millions of Americans, has slowed the growth of health care increases in the states that embraced it, and puts the nation on track to move to a wellness-based system, rather than remain with the nation’s costly fee-for-service system that is no longer viable.

But give the GOP credit for finally proposing a plan rather than just ranting against the ACA. Now, the debate can begin anew with the clarity provided by comparison.

Angelo Lynn

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