On the right, a print-out of the Affordable Care Act. On the left, a copy of the plan to repeal and replace it.
Jim Watson/AFP/Getty Images
House Speaker Paul Ryan from Wisconsin has been complaining about
the Affordable Care Act (aka Obamacare) for so long that his list of
grievances sounds like a refrain of some pop song.
"Obamacare
is collapsing," he said on Feb. 28. "The Democrats got too far ahead on
their ideology and they gave us a system where government runs health
care. They gave us a system where costs went up, not down. They gave us a
system where choices went away. They gave us a system where people lost
the plans they liked, they chose."
And Ryan's not the only
one. Republicans in Congress have spent the past several years detailing
what is wrong with the ACA. And in every election since it passed,
nearly every Republican candidate, including President Trump, has vowed
to get rid of the law and put something better in its place.
On Monday evening, House Republicans finally released their own
health care proposal.
It would replace Obamacare's mandate to buy insurance and his subsidies
to bring down the cost with a fixed refundable tax credit that people
can use to buy coverage. Nobody's required to have a health plan. But if
you don't get covered at the outset, you'll pay a penalty to buy it
later.
So does it fix the problems Republicans have laid out? Likely not.
Let's start with the collapsing insurance market.
"It's debatable whether the market is imploding or not," says
Cynthia Cox, associate director of the Program for the Study of Health Reform and Private Insurance at the Kaiser Family Foundation.
"On
one hand, they're getting rid of the individual mandate [for most
people to buy insurance], and that would have the effect of
destabilizing the market and raising premiums," Cox says.
And the penalty for allowing a gap in your health insurance coverage could help, or it could make it worse, she says.
The penalty could be "a disincentive for healthy people to sign up," she says.
That's
the central challenge both approaches face. A healthy market needs a
lot of healthy people so that premiums are spread across a broad
population to
care for sick people. Without that, the market struggles to keep costs low and choices high.
The
Affordable Care Act's markets have been struggling, no doubt. Several
insurance companies have dropped out, leaving some states and counties
with only one company offering plans. At the same time, premiums have
risen in many markets. Last year, premiums
rose an average 22 percent — though individual cost increases varied because federal
subsidies for many people rose in tandem with premiums.
Ryan says he wants consumers to have more choices and lower costs.
"Instead
of fewer choices, we want our health care system to be truly
competitive. Insurers should compete for your business and treat you
fairly," he said on Feb. 22. "All of this will lower cost and end the
annual sticker shock of higher premiums."
Will his plan offer more choices?
Not necessarily, says
Paul Howard, a senior fellow at the conservative Manhattan Institute.
"There's not enough flexibility from the insurers' point of view to offer lower cost plans," he says.
That's because Republicans are
hamstrung by politics,
he says. They can't repeal the Affordable Care Act outright without the
help of Democrats, which they won't get. So in order to get a bill
through, congressional rules say they have to limit it to matters that
deal with taxes or the budget.
Which means all the benefits
that the existing health care law says have to be included in a health
insurance policy would remain. And that means insurance companies can't
offer cheap health plans.
That brings up Ryan's other goal: lowering costs.
"I
don't see it being abundantly clear that premiums will be significantly
lower under this bill than they are in the Affordable Care Act," says
Cox of Kaiser. "And there is evidence the out-of-pocket costs could go
up," she says.
That's because the Affordable Care Act offers
subsidies to cover the deductibles and copayments for lower-income
people. The Ryan plan offers a fixed tax credit — between $2,000 and
$4,000 depending on age — that would likely lead many people to buy
health plans they have to shell out a lot of money for up front, called
high deductible plans.
Cox's analysis shows that
wealthier people get more help from the new Republican plan while lower income people benefit more from Obamacare.
Republicans
are hamstrung in part by the fact that they can't repeal the Affordable
Care Act in one go and fully replace it with their own vision.
Even if the bill did meet Paul Ryan's goals, it certainly doesn't fulfill President Trump's campaign promises.
"Everybody's got to be covered," he said in an
interview with 60 Minutes
in 2015. "This is an un-Republican thing for me to say, because a lot
of times they say, 'No, no, the lower 25 percent, they can't afford
private.' But I am going to take care of everybody." He
repeated that goal this past January in an interview with
The Washington Post.
As
it turns out, the Affordable Care Act didn't cover everybody. And early
analyses of the Ryan proposal suggest his plan could reach even fewer
people.
A report from Avalere Health and McKinsey estimated
that 30 percent of those in the individual health insurance market could
drop out if the current subsidies were swapped out for the age-based
tax credits.
Howard of the Manhattan Institute worries that people who are now heavily subsidized will fall away.
"I
would have some concerns about those low-income folks dropping out of
the market, and concerns about whether or not that 30 percent surcharge
is going to keep the younger population in the market," he said.
Stay
tuned. The process of moving the bill through Congress starts Wednesday
in the House committees with jurisdiction over health care.
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