AHCA: A Poor Bill To Replace A Worse Law

AHCA is nothing of which to be proud.

Make no mistake about it. Its primary purpose is to establish a lower baseline budget now by doing away with Obamacare taxes on the wealthy. This would allow a tax reduction bill to be drafted later this year that would be revenue neutral over a ten-year period. In other words, the net decrease in tax revenue wouldn’t be as great as it would be if the Obama surtax on the wealthy were still in place.  That’s a requirement tax reduction legislation later this year would have to meet to be enacted through the arcane reconciliation process requiring only a majority vote. That’s the truth of it.

BUT the ACA (Affordable Care Act) is a train wreck in desperate need of repair, replace or repeal and, at the end of the day, (we hate that expression) all three verbs are interchangeable. Obama’s Affordable Care Act is affordable for some, especially when healthcare premiums are subsidized by others, and outrageously unaffordable for others who have seen their healthcare premiums and /or deductibles go through the roof. The ACA was sold to the American public with a presidential look-em-in the-eye blatant lie— “if you like your doctor you can keep him or her” – “If you like your healthcare plan you can keep it” and just to make sure everyone understood they could count on those promises, President Obama punctuated each promise with “Period!” President Obama even assured the nation that premiums would go down by $2400 during his first term in office. None of these promises were true, nor did anyone in the White House believe they were true. Worse, the ACA obliterated any actuarial basis for pricing healthcare, thereby assuring that a preponderance of older, high-cost applicants would show up, and younger, low-cost applicants would go fishing or take their kids to Disneyland instead of buying health insurance.

AHCA leaves much too much to others (the States) to implement which isn’t bad in and of itself. Handing waivers off to the States, however, creates too much uncertainty for a populace that is already being whipsawed by rate and deductible increases as well a substantial retreat of health insurance companies exiting the ACA (Obamacare) marketplace.

As might be expected, the Democrats and some Republicans are calling the AHCA a disaster equaled only by the three Woe Judgments depicted in the Book of Revelations. Like many criticisms leveled at anything Trump, the criticisms leveled at the ACHC are a bit over the top. The biggest criticism, of course, is that it will throw people with pre-existing conditions under the bus –either leaving them with no insurance or much more expensive insurance. That’s really not true.

House Speaker Paul Ryan was, essentially, correct when he said, “no matter what, you cannot be denied coverage if you have a pre-existing condition.”  The charge that people with pre-existing conditions will either be denied coverage or priced out of coverage–also, not true.

What is true is that individuals with pre-existing conditions who wait until they need care to buy insurance (even though they have known they would eventually need care) would be charged more than those who make the decision to purchase insurance when available under the AHCA at rates commensurate with what the general public is charged. In other words, Speaker Ryan used a reasonable analogy when he compared people with pre-existing conditions who wait to buy insurance until they need care to someone who waits until their house is on fire to then buy homeowner’s insurance.

No one with pre-existing conditions would really get thrown off their health care because of the provision that grants waivers to States. You do not have to take our word for it. According to the Washington Post fact checker, the AHCA allows states to seek a waiver so that a person who lives in one of those states who “has a lapse in health coverage for longer than 63 days; has a pre-existing condition; and purchases insurance on the individual or small-group market” can “face insurance rates that could be based on their individual condition, for one year.” After that year, rates would once again be based on a community assessment, and states that avail themselves of the waiver must also offer a high-risk insurance pool to alleviate the financial burden. True, such high-risk pools may be underfunded, but under funding is also a major problem with Obamacare. That is exactly why rates are going through the ceiling in so many States. Obamacare is underfunded because the penalties charged to those who do not buy insurance is woefully inadequate, and that is why insurance rates and deductibles have skyrocketed.

The biggest problem with AHCA is that it may bear little resemblance to whatever bill the Senate finally enacts and sends back to the House. In other words, no one really knows at this point what the nation’s healthcare program will finally be. It’s the uncertainty. That’s the dilemma and not that the House has created sausage on which people are choking.