The House Republican repeal of the Affordable Care Act (ACA) appears to be in trouble, and it’s a good thing: it ends Medicaid as we know it, makes insurance unaffordable for millions of American families, takes coverage away from millions more, blows a hole in state budgets, defunds Planned Parenthood, and gives massive tax cuts to rich people and the big drug and health insurance companies.
Here are the five reasons:
1. It destroys Medicaid and the people who depend on it, and key Republican Senators don’t like that. Senators Portman, Capito, Gardner, and Murkowski outlined the need to protect Medicaid expansion, which provides coverage for 11 million people, in a powerful letter to Majority Leader Mitch McConnell. “We are concerned that any poorly implemented or poorly timed change in the current funding structure in Medicaid could result in a reduction in access to life-saving health care services,” they wrote. Hopefully these senators will be similarly concerned that the House bill radically restructures Medicaid, dramatically slashes funding, and ends the program as it has functioned since its inception. Eliminating the expansion alone will result in $370 billion in costs to states over the next ten years. It’s no wonder that Republican Governors like John Kasich from Ohio have expressed serious concerns.
2. The right-wing hates it. Representative Justin Amash of Michigan, a leader of the three-dozen strong House Freedom Caucus, dismissed the Republican leadership plan in a two-word tweet: Obamacare 2.0. “It’s Obamacare in a different format,” said Representative Jim Jordan of Ohio, another member of the Freedom Caucus. Senator Rand Paul and other Senators are criticizing the proposal for failing to meet basic conservative principles. Powerful groups on the right have condemned the bill, including Heritage Action, the Club for Growth, Freedom Works and Americans for Prosperity. The staff of the Republican Study Committee, which boasts 170 members in the House, said in a memo that the tax credits amounted to “a Republican welfare entitlement.”
3. Unlike Obamacare, it fails America’s families. Thanks to skimpy tax credits and new insurance discrimination rules, virtually everyone will pay more and get less. According to an analysis by David Cutler, John Bertko, Topher Spiro, and Emily Gee, the GOP plan will increase costs for the average ACA enrollee by $2,409 in 2020, when the Republican tax credits take effect. As those four economists and policy analysts explain, the impact of the Republican bill would be particularly severe for older individuals, ages 55 to 64. Their costs would increase by $5,269 if the bill went into effect today and by $6,971 in 2020. Individuals with income below 250 percent of the federal poverty level would see their costs increase by $2,945 today and by $4,061 in 2020.
4. It’s a tax cut for the rich masquerading as a health plan. The House plan would repeal nearly all the taxes in the ACA, including taxes on drug companies, medical-device manufacturers, health insurance companies and the very wealthy. This is essentially a massive redistribution of wealth from America’s poor, working and middle-class families to big corporations and rich people, as legal scholar and health policy expert Tim Jost and others have noted. Jost points out that the Joint Committee on Taxation estimates the bill would cut taxes by almost $600 billion over 10 years. The Center on Budget and Policy Priorities explains that the Republican’s repeal of the Medicare taxes alone would give the 400 highest-earning American taxpayers a $7 million tax cut each. This aspect of the GOP plan simply shocks the conscience and will get more attention as the debate continues.
5. It won’t work. The Republican “coverage requirement” – a provision that penalizes people for having a lapse in coverage by allowing insurance companies to charge them 30% more – is a very poor substitute for the requirement that everyone has insurance and be given the opportunity to purchase affordable coverage. A new study by The Century Foundation outlines five reasons why the new House legislation will lead to a “death spiral” and the collapse of the insurance market. The most basic is that it encourages healthy people to leave the market and sick people to stay – the very cause of a death spiral. This isn’t an ideological or partisan point – it’s a point of fact about what happens when you replace a workable insurance pool with one set up to fail.
The biggest reason the House plan has problems, of course, is that the public is opposed to it. More than 100,000 people turned out at town halls over the February recess to drive that point home. This is going to continue.
Hopefully the fury over the many flaws of the Republican proposal will overwhelm the cynical and partisan politics behind it. The GOP made a promise to repeal the ACA that they cannot keep, but they’re going to try anyway, no matter who and how many people it hurts, and how much damage it causes to our health care system.