March 8, 2017

The Republican healthcare wreck

The new House Republican health plan would shift an estimated $370 billion in Medicaid costs to states over the next ten years, effectively ending the Affordable Care Act’s Medicaid expansion for 11 million people while also harming tens of millions of additional seniors, people with disabilities, and children and parents who rely on Medicaid today.

Here's a sweet deal for insurers buried in the GOP's new Obamacare bill. Health insurance companies could realize a $1 billion or more windfall over the next decade — and end up paying their CEOs even more money — because of a simple tweak in the GOP's proposal to replace Obamacare. That tweak, buried in cryptic language on page 67 of the bill, would end the $500,000 cap that health insurers currently have under the Affordable Care Act on deducting the cost of executives' compensation as business expenses on their taxes.

While official numbers are not available on the number of people who would lose coverage, "a report from Standard & Poor’s estimated that two million to four million people would drop out of the individual insurance market, largely because people in their 50s and early 60s—those too young to qualify for Medicare—would face higher costs," reports the Times. "Other analysts, including those at the left-leaning Brookings Institution, have estimated larger coverage losses."

"Legislation could also fundamentally weaken the insurance market by doing away with the so-called individual mandate, which requires people to have coverage or pay a tax penalty," reports the Times. "While it would be replaced by a 30 percent surcharge when someone buys a policy after dropping coverage, the surcharge could be weaker than the current mandate, and younger people might continue to gamble on not having coverage until they get sick. The result, said Donald H. Taylor Jr., a health policy professor at Duke University, is that people who buy coverage are sicker, causing the cost of premiums to soar." 

The American Medical Association, the largest association of doctors in the country, warned House lawmakers on Wednesday that the GOP's Obamacare replacement plan introduced earlier this week is "critically flawed" and puts millions of Americans at risk of losing their coverage. The association's president, Andrew Gurman, says his group's highest priority is to ensure the largest number of people are guaranteed health coverage and complained it is impossible with the Republican plan — the American Health Care Act — to determine how many people would get or lose coverage compared to former President Barack Obama's Affordable Care Act. "As drafted, the AHCA would result in millions of Americans losing coverage and benefits. By replacing income-based premium subsidies with age-based tax credits, the AHCA will also make coverage more expensive — if not out of reach — for poor and sick Americans. For these reasons, the AMA cannot support the AHCA as it is currently written," Gurman said.

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