Republican's Obamacare replacement puts poorest at risk, says report

White House continues to say the replacement bill will cover more people than existing legislation, but an independent report suggests otherwise

Mythili Sampathkumar
New York
Wednesday 15 March 2017 01:18 GMT
President Donald Trump and Vice President Mike Pence, left, participate in a meeting on healthcare in the Roosevelt Room of the White House in Washington
President Donald Trump and Vice President Mike Pence, left, participate in a meeting on healthcare in the Roosevelt Room of the White House in Washington (AP)

The Republican answer to Obamacare has been analysed and though it will save the government money, it will likely leave millions without health insurance, a report has found.

Republicans in the House of Representatives presented a bill called the American Health Care Act to the Congressional Budget Office, a nonpartisan, independent agency that rates the financial feasibility of bills that are to be put to a vote in the two houses of Congress.

The resulting report has many concerned.

Approximately 14 million more people will be left uninsured according to the CBO report, rising to up to 24 million more by 2026.

This is in direct opposition to the Trump administration’s repeated claims and President Trump’s campaign promises that all Americans would be covered under the Republican alternative to Obamacare, formally known as the Affordable Care Act.

Sean Spicer, White House Press Secretary, weighed in during his daily press briefing.

He and others in the administration have claimed that the CBO estimate on the number of uninsured and the rise in cost of premiums for individuals is inaccurate.

“They’re pretty good at dollars, not good at people,” Mr Spicer said about the CBO.

Republicans in the House have explained that the current proposed legislation is simply the first of three “phases,” as Mr Spicer called it, and that the CBO left out key parts in their report.

As Mike Strazzella, a federal government relations attorney at Buchanan, Ingersoll, & Rooney told The Independent, the CBO has “no political gain to adding or not adding” pieces of the bill in their analysis.

Arthur Tacchino, a healthcare reform expert for SyncStream Solutions, told The Independent that what those next phases are still unclear but may involve Mr Trump signing executive orders and passing additional health care-related laws.

Mr Tacchino explained that one notable item left out was the clause on association health care plans, that would allow small businesses to band together and approach insurance carriers as a group in order to get better underwriting and lower premiums.

The clause perhaps would have allayed some Democrats’ fears on the rising costs under the new proposed legislation.

Its exclusion from the final version could be due to party infighting or a plan to include it in future phases, according to Mr Tacchino.

According to the CBO report, the cost of premiums will go up in the next two to three years by an additional 15 to 20 per cent under the new proposed plan, compared to the expected increase under Obamacare.

“It’s not that you’ll pay 10 per cent less than what you’re paying today, it’s just a 10 per cent lower increase” to premiums, explained Mr Tacchino.

Much of the reason for this appears to be a principle of underwriting. Obamacare’s individual mandate - requiring every American to have health insurance or pay a tax penalty - is what has kept premiums at the point they are now.

The replacement plan eliminates the individual mandate and thus guaranteed coverage. To make up for that, the replacement plan’s penalty is a 30 per cent increase on premiums for 12 months after a period of 63 days without insurance.

According to the CBO however, it does have the same price impact for individuals purchasing insurance.

This is because of the combined age and income based tax credit system under the Republican plan, poor Americans and those in their 50s and 60s making less than $75,000, will still face a significant increase in their monthly payments.

Mr Strazzella explained that despite some of the bleak aspects of the CBO report, Republicans are still celebrating the fact outlined in the report that the plan will save the US government money and reduce the overall deficit.

He said though the tax revenue is lost with getting rid of the individual mandate, it is “made up for by reducing the cost of Medicaid,” the subsidised health assistance programme for those living under the poverty line.

Currently, Obamacare allows for an expanded version of Medicaid in 31 states, covering anyone making up to $15,000. The Republican plan will put a cap on what the government will spend on Medicaid recipients and end this expanded coverage in 2020.

However, he noted that the bill will have to change before it passes the House and goes on to a Senate vote.

“As of today, they do not have the votes based on the public comments by Senators. They will have to tone down number the number of dramatic fashion,” Mr Strazzella said.

The big picture debate over Obamacare and the replacement is one that has been around for decades, according to Mr Strazzella: “mandating ability to purchase versus the ability to access healthcare”.

That is, the debate between access to health insurance versus the ability to get health care.

Savannah Guthrie, host of NBC’s Today Show, gave a good example of this when interviewing head of Health and Human Services Tom Price.

“When you say access is that like if I’m sitting at home and I make $25,000 a year, I have access to buying a BMW, but I can’t afford it.”

The next step for House Republicans will be to revise the bill to prepare it for House and Senate votes.

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