There is little question remaining – among health care professionals, caregivers, administrators, employers, and certainly consumers – that the so-called Affordable Care Act (Obamacare) is an abject failure. The subsidies, irresponsible Medicaid expansion, and onerous insurance regulations have resulted in system costs going through the roof, causing insurance premiums to increase significantly, pricing millions out of the market. The taxes that accompanied the act have been devastating to business. The regulatory labyrinth has caused many insurance companies to leave the market, in many cases collapsing the government exchanges and leaving in some places a single insurer to service a large geographic area, sharply reducing competition and putting even more upward pressure on prices.
Obamacare not only went in the wrong direction in its failed quest to improve the health care system, but did so in dramatic, and in some cases tragic, fashion.
So now the question is, is the proposed replacement, currently before Congress, an acceptable solution?
The plan presented by President Trump and the Congressional majority comes in three phases: the first is the current bill, the “American Healthcare Act” (AHCA); the second will involve Health and Human Services Secretary Tom Price, and will seek to undo some of the key provisions of Obamacare; and the third and final phase will purport to introduce some conservative, free market healthcare reforms.
The AHCA – phase one – has some major issues. The first, and most obvious shortcoming is that it does not in fact repeal Obamacare; both a prerequisite for fixing the problems brought on by Obamacare, and also a key promise made to the people by Republicans.
The second issue is the institution of tax credits to finance the purchase of health insurance on the individual market. It strikes us as rather odd that we would be courting discussion of expansion of tax credits at a time when we are also preparing to seriously examine the prospect of comprehensive tax reform – a key component of which presumably will be elimination of most tax credits, deductions, and other sleights-of-hand designed over the years to turn the tax code into a tool for social manipulation. Nevertheless, that is a core part of the plan Congress is considering.
Besides the economic sophistry behind their use in the first place, the proposal’s tax credit plan suffers from other problems; primarily the fact that, while they are means-tested at the top end (i.e. the credits phase out at higher income levels) they are not means-tested at the bottom – meaning that there is no phase in at the lower end of the economic spectrum. This does little for those in the individual market who are in that netherworld of earning too much to be covered by Obamacare’s subsidies, but not enough to be able to afford insurance with the rates increasing as they are. These are the people arguably most injured by Obamacare, and the AHCA does nothing to reduce costs for this group.
If the tax credits were instituted properly, and temporarily, as a stop-gap measure to help folks out as we transitioned into a more workable healthcare policy, they would not be such a problem. But they are being offered, incorrectly, as a solution, not the band-aid that they are.
The ACHA phase has other issues as well, including the failure to repeal the Medicaid expansions which threaten so many state budgets, or the insurance regulations that as much as any part of Obamacare are responsible for the dramatic rise in health insurance costs in the last few years.
Some of these provisions are, to be fair, intended to be repealed in the follow-up phases of the reform plan. And overall, the later phases offer us some hope. The question is will we even get to them?
How often have we heard politicians, especially in Washington, tell us, regarding a particular proposal “yes, this is pretty far from perfect (or even acceptable); but let us pass it for now, we have a plan to fix it later.” And most of the time they do, in fact, intend quite honestly to fix whatever needs fixing. However, the problems are A) Can they do it? I.e. will sufficient Democratic votes be able to be gleaned from remarkably intransigent Democrats to pass something acceptable? B) Will the final versions of the follow up phases be watered down to the point where they lose all semblance of what was intended? (The Ryan plan is already undergoing heavy pressure to move it leftward.) And C) If we can’t get there, what are we left with. That’s right, whatever we accepted initially.
Our Colorado Congressional Republicans, and in particular Rep. Ken Buck, should refuse to pass the ACHA as presented in its current form, and instead insist on a full repeal of Obamacare followed by the institution of real solutions; focused, for instance, on separating insurance from the workplace, encouraging ownership of insurance, and returning much of the regulatory responsibility back to the states. This is the paradigm which health care reform should follow, rather than risking the opportunity on the future goodwill of Congressional Democrats.
Dr. Jill Vecchio is a Denver-area physician and Health Policy Fellow at the Centennial Institute in Colorado.
Frank Francone is Law and Policy Fellow at the Centennial Institute, specializing in health care issues and fiscal policy.
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