2017-03-17 / View From Here

THE VIEW FROM HERE

The GOP Health Plan
BY BOB MORGAN, JR.

Republicans have now unveiled their long awaited plan to change health care, called the American Health Care Act, and it is certainly gathering strong reactions from all sides.

Here is a brief summary of the AHCA, which is supported by President Trump and House speaker Paul Ryan. The bill eliminates the individual and employer mandates under the Affordable Care Act, frequently called Obamacare, to purchase insurance, scales back the expansion of Medicaid in the states, replaces premium subsidies with refundable tax credits, imposes a 30 percent charge on premiums for individuals who are not continuously insured, allows greater premium differentials for young and old and repeals a number of Obamacare taxes on higher income taxpayers.

On the other hand, the AHCA does not alter such popular Obamacare provisions as a ban on restrictions based on preexisting conditions and allowing young people under 26 to remain on their parents' policies. It also does not include such favorite provisions of conservatives as a scaleback of insurance mandates and allowing people to purchase insurance across state lines, much less implement a rethinking of the roles of employers and government in the insurance process. Indeed, the bill has been called Obamacare lite.

From a political standpoint, Republicans and President Trump promised in 2016 to repeal Obamacare and they believe that they have no alternative but to do so. Unfortunately for them, there is always the danger that changes in a high profile area like health care could run afoul of the so-called Pottery Barn rule, "you break it, you own it".

Of course, a good deal of the confusion surrounding the Republican plan relates to arcane Senate rules and the fact that there are only 52 Republican senators. There is an exception to the Senate filibuster rule, which generally requires 60 votes to proceed with legislation in that chamber, called the reconciliation process, which basically allows purely budgetary legislation to advance with just 51 votes.

This parliamentary maze has forced Republicans to proceed in stages, the first of which is the repeal and replace bill now being considered, which is designed to comply with the reconciliation rules by being limited to items that the Senate's parliamentarian considers to be budget related. The second stage would be issuance of broad regulations. Only then would there be a third stage under which more sweeping new legislation would be proposed, presumably needing some Democratic support, to address proposals like insurance sales across state lines.

Make no mistake, Obamacare, although raising the number of insured people (often through generous subsidies), was flawed and very complicated legislation that never lived up to the promise of allowing people who liked their doctors and medical plans to keep them or the promise of cutting the medical premiums of families.

Moreover, the Obamacare structure has serious problems, particularly in the individual market segment. In many areas, insurance companies are pulling out of the exchanges and there is a prospect of a complete lack of options.

On a political level, the chances of the ACHA to be enacted without serious amendments took a hit this week when the Congressional Budget Office projected that 24 million people would lose health insurance by 2026 under the legislation. While the numbers have been disputed, a possible decline in insureds of this magnitude may well make GOP lawmakers fear the fallout. The CBO did also project significant budget savings from the AHCA as well as an eventual decrease (after an initial bump) in premiums, but this may not offset the 24 million number.

What will happen? What seems most likely is that a version of AHCA will be enacted to replace Obamacare (too important a campaign pledge is involved), most likely with some shoring up of Medicaid and perhaps a postponement of some tax repeals. More fundamental changes in the health care system will just have to wait for another day. The revised AHCA may end up being a little better than Obamacare, but it's more like a Band-Aid than major surgery.

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