GOP Health Care Plan Would Save Billions, Hurt Millions

Photo by karen roach / Shutterstock.com

After weeks of haggling and anticipation over the Republican plan to replace the Affordable Care Act (ACA) — or Obamacare — the official analysis was unveiled on Monday. According to the Congressional Budget Office, the GOP plan would reduce the federal deficit by $337 billion over a decade, but leave 24 million Americans uninsured.

“The largest savings would come from reductions in outlays for Medicaid and from the elimination of the Affordable Care Act’s (ACA’s) subsidies for non-group health insurance,” the nonpartisan agency’s report said. The plan, currently before a committee of the House of Representatives, would phase out the ACA’s expansion of Medicaid. It was that expansion that allowed tens of millions of uninsured low-income Americans access to health care coverage.

The GOP strategy

The Republican strategy for passing the bill into law has two prongs: Repeal the ACA and replace it with a new plan. Even before the CBO report was issued, the majority party swung into action in the House last week, unveiling its replacement proposal (see it at the House GOP website), called the American Health Care Act.

GOP leaders hope to both repeal and replace Obamacare “by spring,” writes The Daily Signal, published by the conservative Heritage Foundation.

But Republicans can’t simply write a law to eliminate the ACA. To do that, they would need 60 votes, but they have only 52 members who will approve such a law. To get around that obstacle they’re using an approach called budget reconciliation, which requires only a simple majority — or 51 votes — in the Senate. This tactic lets them dismantle Obamacare piecemeal, by withdrawing the ACA’s funding, as Time magazine explains.

Timing

The GOP majority leaders are taking a fast-track approach to passing the substitute plan. Last week, it won approval by Republican majorities in two House committees — the Ways and Means Committee (23-16) and the House Energy and Commerce Committee (31-23), United Press International reports. The plan next moved to the House Budget Committee.

If it earns approval there, it will be submitted to the entire House, where it must win 218 votes before proceeding to the Senate. The plan — which is being considered separately from the repeal provisions — must win Senate approval before it can be submitted to President Donald Trump for signing into law.

Trump support

The president supports the plan and has reached out to critics on the right to draw them in. “President Trump, after a halting start, is now marshaling the full power of his office to win over holdout conservatives and waffling senators to support the House Republicans’ replacement for the Affordable Care Act,” The New York Times writes.

Anthem, one of the country’s largest for-profit hospital chains, supports the bill. In a letter to congressional leaders, Anthem CEO Joseph Swedish voiced support and suggestions for its improvement. An association of medical device makers also has weighed in with approval, The Boston Globe reports.

Powerful critics

But support was overwhelmed by the firestorm of criticism that the bill has evoked in its short life. Last week:

  • The large American Hospital Association and six other associations representing children’s hospitals, psychiatric hospitals and Catholic hospitals, among others, voiced objections in a letter saying, “We are very concerned that the draft legislative proposal being considered by the House committees could lead to tremendous instability for those seeking affordable coverage,” according to USA Today. It added that [d]eep cuts in what hospitals are paid ‘while dramatically reducing coverage will reduce our ability to provide essential care to those newly uninsured and those without adequate insurance.'”
  • Two big insurers, America’s Health Insurance Plans and the Blue Cross Blue Shield Association, worried the plan offers “too little financial assistance for people buying their own health insurance and cuts Medicaid funding too much,” Huffington Post reports.
  • America’s Essential Hospitals, an affiliation of “safety net” hospitals providing coverage for low-income and uninsured patients, also objected to aspects of the plan. An interactive state and county level map from the Kaiser Family Foundation shows how consumers’ access to tax credits would likely change — by income — under the House bill being considered.

The American Health Care Act encountered fierce criticism from the Democratic Party. According to Reuters:

Democrats, meanwhile, have denounced it as a gift to the wealthy that will take insurance away from millions of people.

“What they’re doing is very destructive. … It represents the biggest shift of money to the wealthiest people in our country, the top 1 percent, at the cost of working families,” House Democratic leader Nancy Pelosi told reporters.

Arrows from the right

The plan also has drawn fierce criticism from some Republicans, especially conservatives:

  • “Numerous GOP centrists and governors were antagonistic, worried their states could lose Medicaid payments and face higher costs for hospitals having to treat growing numbers of uninsured people,” Time magazine reports. Conservative groups including FreedomWorks, the Club for Growth and the libertarian Cato Institute have criticized the plan.
  • Other conservatives, in and out of Congress, object that the plan does not go far enough in moving away from the Affordable Care Act and that some provisions of the GOP plan are too similar to Obamacare. “It’s Obamacare in a different format,” Jim Jordan (R-Ohio), a member of the hardline House Freedom Caucus, told The Atlantic. He and other conservatives object because the bill takes four years to phase out the Medicaid expansion; it doesn’t immediately repeal all ACA tax increases; and it uses refundable tax credits (as opposed to tax deductions) to help Americans buy their insurance.

“The AHCA can only afford to lose 21 GOP votes if it’s going to pass the House, but it could lose more if Republicans can’t assuage conservatives who are unhappy with it,” UPI reports.

Wonder how the health care skirmish will end up helping or hurting you? Follow MoneyTalksNews for ongoing reporting on the politics and practical implications.

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