The seemingly eternal debate over Democrats’ Patient Protection and Affordable Care Act, the tax bill commonly called Obamacare, is beginning to ratchet up again. I skimmed parts of the Republicans’ American Healthcare Act bill (beginning to be called ‘Trumpcare’) this morning, but I will give it a more careful read in coming days.
There are some good things about the proposed legislation.
There are some not so good things about it.
My lens is that of a consumer with an employer insurance program through my husband’s job. For us, PPACA/Obamacare has been a negative. Our deductible increased. Our premiums increased. And because of the way Democrats wrote their legislation, our copay for a doctor visit almost doubled. Prescription drug costs increased. Contributions to our HSA are limited, and we lost the ability to pay for over the counter meds through that account even though it’s our money and not the government’s. I have personally observed doctors strictly adhering to standards set by federal bureaucrats when it comes to treatment.
Toss in the fact I know a number of self-employed individuals who, in complete frustration after spending hours on the marketplace site set up by President Barack Obama’s administration, decided to pay a “penalty”—translate: additional taxes—because they simply could not afford the costs of a policy.
I’m sharing my perspective because that impacts how I view the bill. Anyone writing about this bill should share how both bills impact them personally.
For those who get generous subsidies from the US taxpayer or for those who basically get free healthcare through Medicaid (or through the federal insurance program for children also financed by US taxpayers), PPACA is popular. This is understandable. If someone gives you money, you like it.
With that out of the way, here are some initial thoughts on the new bill.
The GOP bill repeals PPACA, including virtually all of the massive taxes. Americans would certainly feel the pinch of a number of those taxes set to kick in once Obama left office. Medical devices, non-compliance, and the craziest tax-doodle I’ve ever seen called the “economic substance doctrine” appear to be headed for the ash heap. That last, the economic substance doctrine shifted tax deductions to the land of whimsy. As I’ve pointed out, it attempted to penalize people for taking legal tax deductions. That alone could be wielded against political undesirables in a most unfortunate manner.
The so-called ‘Cadillac Tax’ on generous benefits—this would primarily I believe affect unionized government employees ultimately—would be postponed until around 2020. The PPACA postponed it as well because, after all, government employees routinely support Democrats. The revenue from the tax was, however, projected into long term estimates. This was a theoretical way of paying for PPACA, but the revenue is an illusion.
The American Healthcare Act, initially dubbed ‘Trumpcare’, reverses a central premise of Obamacare, reducing costs for younger people and increasing costs for older people.
AHA kills Democrats’ mandate forcing you to buy insurance, but leaves the ghost of it in place with a 30 percent penalty if you go without insurance for more than two months. The penalty now manifests in the insurance company’s ability to charge a higher premium. A stink bomb by any other name is a stink bomb.
The employer mandate is also gone. That will eliminate employers opting to create part-time jobs instead of fulltime jobs.
Here’s the good news.
Republicans put this draft legislation online and are practically begging people to read it. This is a complete reversal of Rep. Nancy Pelosi’s bizarre we had to pass it to see what was in it remarks after PPACA/Obamacare was literally shoved down our throats like a pig in a poke. Credit should be given to Speaker Paul Ryan and his fellows for doing this even as they knew they would face fire from opposition within both political parties dominating our government.
Another plus is that the bill can be amended. Republicans are willing to deal. That is a vast reversal from the manner PPACA was foisted on us.
I like that the taxes are repealed. When Congress taxes more, they spend more. The federal bureaucracy is so large it threatens the very soul of our Republic. We do not need to send more money to Washington. What we need to do is reduce the money spent in Washington.
And that’s where the bad news comes in. The bill isn’t scored yet, but I think it is going to be very expensive. For one thing, the US acts as a charity for migrants fleeing failed countries, paying for healthcare for any children adults bring with them. In my opinion, the US should charge countries a tax for their inability to govern their people effectively. In other words, if we receive large numbers of low income migrants from a country, that country should help foot the bill.
For another, trauma, one of the costliest factors in our healthcare, probably won’t go down any time soon. Just imagine the total trauma bill for a city like crime-infested Chicago in a single weekend.
Also, just as emergency room visits increased under PPACA/Obamacare, I believe they’ll do the same under Trumpcare. Healthcare providers aren’t likely to reduce their fees after they have structured them to accommodate insurers and increase the bottom line both ways.
As a voter who leans libertarian, I don’t believe the federal government should ever have intruded into the healthcare sector. That is, in my opinion, a matter for states to decide through their voters. Both Medicare and Medicaid contracted the healthcare market by removing large pools of consumers from the private marketplace and bumping them into the bureaucratic boondoggle.
I have learned one absolute truth about government. When the federal government intrudes on a market, costs go up for consumers and income tax payers.
I didn’t see anything in the proposed legislation that enables shopping for insurance across state lines. I didn’t see anything requiring healthcare providers to post prices for procedures—that should be demanded by every consumer in the land, but Americans are apparently too busy to apply common sense to that matter. For instance, would you buy a car without knowing the purchase price?
Nor do I see anything in the new bill that permits creative approaches. For instance, could healthcare providers offer plans for direct routine care and could we purchase a plan for catastrophic illnesses?
As I said, I skimmed the bill. I will revisit it as it develops. I didn’t go easy on PPACA and I will take the same approach to the AHA. Would that everyone writing about these bills did the same.
Sources and Related Links
Statement from Speaker Paul Ryan on AHCA
Full Text of American Healthcare Act
5 Serious Problems with the Republican Replacement [Ben Shapiro]
House Republicans release plan [Tyler Durden]
Cruz and Sanders debate Obamacare [Kay B.Day]
(Commentary by Kay B. Day/March 8, 2017)