Republican Health Plan Is Worth a Closer Look

There has been a firestorm of conservative opposition to TrumpCare, as the American Health Care Act is already becoming known. The Republican health care plan has been widely panned and even viewed as a betrayal by many on the right.

To find out more about what the bill contains, I sat down and read it. Unlike Obamacare, the Republican health care bill is posted on the internet in its entirety. The bill took less than two hours to read. You can read it for yourself by going here. References to sections of other laws such as the ACA make it difficult to get the full grasp of some parts of the bill, but it's easy to get a general overview of most of the proposals.

The first two sections deal with “Patient Access to Public Health Programs” and “Medicaid Program Enhancement.” These sections dealt with reforms to Medicaid. Some of the items included, listed in order with their section number were:

·         Banning Medicaid money for abortion providers such as Planned Parenthood (103)

·         Repealing the Medicaid expansion effective January 1, 2020 (112) – The Medicaid expansion was the largest expansion of coverage under Obamacare.

·         Limits the eligibility for Medicaid (114)

·         Creates incentives for states to qualify Medicare recipients more often and penalizes those that carry ineligible people on the rolls (116)

The next section, “Per Capita Allotment for Medical Assistance,” also deals with Medicaid reform.

·         Caps Medicaid spending on a per person basis (1903A)

Subpart D is entitled “Patient Relief and Health Market Stability.”

·         Repeals Obamacare’s cost-sharing subsidy with insurance companies (131)

·         Creates a Patient and State Stability Fund that empowers states to create risk pools for high risk individuals, promote preventive care, reduce costs and reduce out-of-pocket costs for insureds (2202)

·         This section also describes the Continuous Health Coverage Incentive for people who drop their health insurance and sign up again. This is a 30 percent penalty for people who do not have 63 days of continuous coverage in the previous 12 months. This is not a popular provision, but Obamacare’s clause guaranteeing insurability for previous conditions is something most Americans want to keep. If this provision is to be kept, some sort of mechanism is necessary to prevent people from waiting until they get sick to buy insurance. (133, 2711)

·         Amends Obamacare to increase insurance policy options (134)

There are many individual sections of the bill that repeal Obamacare taxes as well. One section of the bill is titled “Repeal and Replace of Health-Related Tax Policy.”

·         Repeals the tanning tax

·         Repeals the tax on prescription medications

·         Repeals the Health Insurance Tax

·         Repeals the Net Investment Income Tax

·         Prohibits tax credits for abortion coverage (02-04)

·         Repeals individual mandate (05)

·         Repeals tax on employee insurance premiums and benefits (07)

·         Repeals tax on over-the-counter medications (08)

·         Repeals tax increase on Health Savings Accounts (09)

·         Repeal of limits on Flexible Savings Account contributions (10)

·         Repeal of medical device tax (11)

·         Repeals the increase in the threshold of the medical income tax deduction. The threshold would return to 7.5 percent of adjusted gross income from the current 10 percent. (12)

·         Repeal of the Medicare tax increase (14)

·         Section 15 deals with the refundable tax credits for insurance premiums. Section 7529 allows advance payment of the credit. This is a problematic section.

·         Increases the HSA contribution limit to equal the amount of the policy’s deductible and out-of-pocket limits (16)

·         Permits catch-up contributions to HSAs (17)

·         Treats medical expenses within 60 days of the establishment of an HSA as occurring on the first day the account was opened. This would allow HSA funds to be used for a condition that occurred shortly before opening the account. (18)

The AHCA is not a perfect bill. It is also not a betrayal of the Republican promise to repeal and replace Obamacare. In fact, many of the provisions in the bill have been on the wish list for conservatives long before Obamacare became law.

Republicans are in a weaker position than Democrats were when they passed Obamacare. As Jamie Dupree of the Atlanta Journal points out, Democrats had 60 votes, enough to break a Republican filibuster, when they originally passed the bill on Christmas Eve 2009. They subsequently lost a vote when Scott Brown (R-Mass.) was elected to the Senate and used the reconciliation process for the second bill of the Obamacare package. Both bills ultimately became law in March 2010.

Republicans have only 52 Senate votes, which is not enough to end a Democrat filibuster. At least four of the Republican votes would not be reliable for a clean repeal bill. A perfect bill is simply not possible.

The current Republican plan is three-pronged. First, the reconciliation process will repeal as much of Obamacare as possible with the AHCA. Second, President’s Trump’s appointees will kill as much Obamacare regulation as possible through administrative rulemaking. Finally, the remainder of Obamacare will be repealed and replaced through a traditional bill. This bill would ideally enact other reforms that cannot be part of the budget reconciliation such as allowing health insurance to be sold across state lines. The third phase will be the most difficult since that bill would be subject to a Democrat filibuster.

Since an outright repeal is impossible and since the AHCA does contain many good conservative reforms, the best solution is to improve the current bill. The American Enterprise Institute has identified several changes that could be incorporated into the AHCA to lower costs and help stabilize the insurance market. Other conservative think tanks and members of Congress could probably improve the bill even more.

Now that the Republican plan is in the open, party leaders should slow down and allow time for a national debate on the merits of the legislation. By rushing forward with an unpopular and flawed bill, Republicans may well repeat the experience of the Democrats who pushed through a bill that only became less popular as its cobbled together provisions made the problem worse. The Democrats ultimately lost control of both houses of Congress and the presidency because of Obamacare. Republicans should learn from these Democrat mistakes.

Conversely, killing the Republican health care reform would be a major victory for the Democrats and may well scuttle efforts to repeal Obamacare permanently. A better solution is to work to improve the current House bill.

Republicans could just say no when Barack Obama was president, but with a Republican in the White House, they have to be realistic. They have to have a plan… a realistic one that can pass the House and Senate. Right now, improving the AHCA seems to be the best option.

 Originally published in The Resurgent