As you know by now an Obamacare replacement bill has finally been authored and was released to the public last night.
Don’t get your hopes up – it’s hardly the “repeal and replace” we’ve been promised.
Sen. Rand Paul, who made headlines for trying to try to obtain a copy of the bill (and was denied), was among the first to read the bill to find out what’s in it. Unfortunately, it appears to be mostly more of the same.
Th House leadership plan is Obamacare Lite. It will not pass. Conservarives are not going to take it. #FullRepeal
— Senator Rand Paul (@RandPaul) March 7, 2017
Paul was hardly the only Republican to sound off.
Obamacare 2.0 https://t.co/p0zKkMD3UT
— Justin Amash (@justinamash) March 6, 2017
Ohio’s Rep. Jim Jordan complained that “This is Obamacare by a different form. They’re still keeping the taxes in place and Medicaid expansion, and they’re starting a new entitlement.”
So what’s the good, the bad, and the ugly?
Let’s start with why some Republicans are objecting, courtesy of the Conservative Review (who branded the law “RINO Care”): The Obamacare “replacement” bill doesn’t repeal the core of Obamacare in the first place. In fact, the few parts that it repeals or tweaks within a few years will actually intensify the death spiral of Obamacare when mixed with the core regulatory structure, exacerbated by the subsidies that they do keep. And this time, the GOP will own it politically. All of it.
There is no innovation, and no way to lower costs. While some of the regulations are tweaked with more flexibility, the 800-pound gorilla in the room — guaranteed issue mixed with community rating (which is responsible for almost all of the premium hikes) — is left in place. Nor does this bill repeal the mandated essential benefits, which require insurers to cover a specific number of people and sex change operations, maternity care for men, etc.
And even the repeal of actuarial value “metal” requirements (platinum, gold, silver, bronze) — the most positive of the outlined changes — would not take place until the 2020 plans.
Amazingly, while the “American Health Care Act” blows up the insurance market in order to mandate coverage of the sick, it still throws a whopping $100 billion at states in order to further subsidies to the poor and the sick (on top of Medicaid expansion and exchange subsidies).
On top of leaving the regulatory regime and the rigid exchanges, this House bill replaces the income-based subsidies with age-based subsidies – ranging from $2,000 for younger people to $4,000 a year for older enrollees, and as much as $14,000 for a family. It is a massive new entitlement for middle-income and lower-income Americans. It would apply in full for families earning up to $150,000, and then phased out $100 per thousand dollars earned over that threshold. Thus, a family could theoretically get some sort of subsidy well into the $200,000-plus income level.
As for Medicaid, the draft plan grandfathers in the entirety of the Obamacare expansion. Worse, it doesn’t freeze future enrollment for another two years, which will incentivize states to massively expand Medicaid before 2020. It also throws another $10 billion to states that never expanded Medicaid.
Does that sound like repeal and replace to you? It sounds a heck of a lot more like tweaking Obamacare slightly then re-branding it as a Republican plan. I (Matt Palumbo) have said in the past that there’s no point in waiting for a replacement to be outlined before repealing Obamacare – because when a doctor removes a cancer, does he debate what to replace it with? In my opinion, this bill hardly replaces Obamacare, and simply allows the cancer to spread.
The individual mandate gets removed and replaced with tax credits, but that’s about it.
[Note: This post was authored by Matt Palumbo. Follow him on Twitter @MattPalumbo12]