It’s your health care or your iPhone.
Republicans say it’s high time Americans have some skin in the health care game. Never mind all the voters who’ve confronted their representatives for weeks now about the stark, life-or-death choices they endured before Obamacare: lost jobs, lost homes, bankruptcies.
The newly introduced American Health Care Act is infused with a spirit of, well, this:
“Americans have choices. They’ve gotta make a choice. Maybe rather than getting that new iPhone they just love and they want to go spend hundreds of dollars on that, maybe they should invest it in their own health care. They’ve gotta make decisions themselves,” Jason Chaffetz, R-Utah, told Alisyn Camerota on CNN’s “New Day” on Tuesday.
Let them eat cake indeed.
This is the grand health care reform that President Donald Trump described to the nation just last week in a series of platitudes before a joint session of Congress. Is it grand?
Let’s put it this way: Plenty of Americans might need those iPhones when their only “coverage” is a quick consult of WebMD online.
The White House initially stepped cautiously around this specific GOP legislation, with spokesman Sean Spicer saying in a statement Monday that the bill was an “important step” and that “President Trump looks forward to working with both chambers of Congress to repeal and replace Obamacare.”
But the spin doctoring couldn’t last: “Our wonderful new Healthcare Bill is now out for review and negotiation,” Trump tweeted Tuesday morning, taking ownership of the bill. “ObamaCare is a complete and total disaster – is imploding fast!”
So let’s take a look at the newly released American Health Care Act and see how it stacks up against the five principles the President outlined to Congress and the nation last week.
1. Trump to Congress: “First, we should ensure that Americans with pre-existing conditions have access to coverage, and that we have a stable transition for Americans currently enrolled in the health care exchanges.”
The Republican plan: First, Trump’s promise that pre-existing conditions will be covered crashes on the rocks of an unsustainable insurance market. Trumpcare would disincentivize personal responsibility by revoking Obamacare’s requirement that adults maintain coverage (the “mandate”) and allowing folks who become sick to hop back into the insurance market at any time.
So, under this new plan, expect insurance rolls well-stocked with sick patients who are actively using resources, while healthy people, especially the young, have to choose threadbare plans or nothing at all.
Trumpcare does force the sick who have let their insurance lapse, but suddenly need it, to pay a 30% surcharge, but that’s still quite a bargain if you really need the chemotherapy. And what if you can’t afford the higher rates? That’s where the high-risk pools come in.
These are federally supported, state-regulated, subsidized health insurance plans, and the Trumpcare bill extends them a lifeline of $100 billion to be shared among all the states over the course of 10 years.
Under this scenario, don’t be so confident that you, with your pre-existing condition, will be able to get health insurance rapidly. You have no guarantee the high-risk pool insurance will be there when you need it: The wells regularly ran dry the last time states tried this type of insurance, and we should expect that will happen again.
2. Trump to Congress: “Secondly, we should help Americans purchase their own coverage, through the use of tax credits and expanded health savings accounts — but it must be the plan they want, not the plan forced on them by the government.”
The Republican plan: Here we have truth in advertising, the bill contains both tax credits and HSAs, but it allows for weaker plans, removing Obamacare’s platinum, gold, silver and bronze tiers. Instead, the bill allows for more watered down plans that have lower “actuarial values” than even the bronze tier plan, where insurance covers only 60% and you cover the rest.
An earlier version of the bill eliminated Obamacare’s essential health benefits as well — that’s the range of services, from pregnancy to rehabilitation, that all plans must cover — allowing the states to make those decisions. But now the GOP bill, as introduced, allows those required categories of coverage to stand. This is much to the consternation of the Freedom Caucus and other Republicans, who are more conservative on this issue and want to see a fully unfettered insurance market.
Because there are multiple stages of health care reform the President intends to facilitate, those Republicans, who are essential to passing a true Obamacare replacement, will have plenty of opportunity to eliminate the comprehensive coverage requirement.
As for the tax credits, they’re capped at a much lower level than Obamacare, ranging from $2,000 to $4,000 depending on your age (and phased out for individuals making over $75,000 or couples making over $150,000). This means you’ll need the money in your HSA more than ever — for those little incidentals, like covering the rest of your premium or the increased out-of-pocket costs your Trumpcare plan doesn’t pick up.
It’s a bright spot that the bill maintains Obamacare’s annual out-of-pocket limits ($7,150 for an individual, $14,300 for a family in 2017), but you should expect to spend that kind of money much more often under Trumpcare.
3. Trump to Congress: “Thirdly, we should give our great state governors the resources and flexibility they need with Medicaid to make sure no one is left out.”
The Republican plan: Trumpcare would rout Medicaid, leaving one of the signal achievements of President Lyndon Johnson’s vision of a Great Society in tatters.
Under this GOP plan, beginning in 2020 the federal government will start dialing down its commitment to the poor and disabled, capping its Medicaid support per enrollee initially at the spending levels in 2016, and using a formula for annual increases rather than actually providing for the real costs of Medicaid services. The legislation removes requirements that Medicaid plans provide coverage of essential health benefits.
Trumpcare would mean less care for disabled people who need Medicaid services to be able to live in the community, people who need mental health and addiction services, and anyone reading this article who might one day find themselves out of a job, unable to afford any private insurance, and needing Medicaid’s help.
4. Trump to Congress: “Fourthly, we should implement legal reforms that protect patients and doctors from unnecessary costs that drive up the price of insurance — and work to bring down the artificially high price of drugs and bring them down immediately.”
The Republican plan: While I’ve found nothing about malpractice reform in the American Health Care Act introduced this week, the “Protecting Access to Care Act of 2017,” sponsored by Steve King, R-Iowa, made it out of committee last week, and seeks to cap damages for pain and suffering in lawsuits to $250,000.
King’s bill specifically targets federally sponsored insurance programs, including employer-based health plans, because they benefit from tax credits. The rationale here is that limiting health care system liability will keep costs lower.
Many have argued that some element of tort reform should have been included in Obamacare, but any new liability system should account for the fact that pain and suffering do occur due to medical errors. Error is baked into any medical system. I think we should predict an error rate, tax medical services for it, set aside those funds, and allocate them as needed.
There are more rational ways to handle this than the way we do now, but King’s bill leaves a lot to be desired. His bill does necessitate open and deep debate, but such a conversation is unlikely in this political environment.
The GOP’s plan also doesn’t address drug prices, but Trump tells us he is still on the case, tweeting today, “I am working on a new system where there will be competition in the Drug Industry. Pricing for the American people will come way down!” Pharma stocks promptly plummeted.
5. Trump to Congress: “Finally, the time has come to give Americans the freedom to purchase health insurance across state lines — creating a truly competitive national marketplace that will bring cost way down and provide far better care.”
The Republican plan: The GOP’s American Health Care Act doesn’t do anything to allow folks in Massachusetts to buy a plan sold out of, say, Texas. There’s none of the much ballyhooed national insurance market Trump has touted since the campaign trail, but Trump insisted this morning on Twitter that eliminating state lines is coming in “phase 2 & 3 of the healthcare rollout.”
That’s too bad, since it doesn’t make any sense. Insurance companies have to negotiate rates with individual providers and hospitals, a big enough job in any single state, so buying cheap Texas insurance isn’t going to be of much help if all your local hospitals in Massachusetts are out of network.
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Bottom line? At least when you buy an iPhone you know exactly what you’re getting.
So far, Trumpcare is largely a bait and switch, both for the President’s supporters and the rest of America; that’s the majority that chose someone else to do the job Trump ended up winning.
In that dreamy speech to Congress, the President didn’t just paint a portrait of legislation we’ve yet to see. He also highlighted the case of one particular rare disease survivor, a woman who’s now alive and a student at Notre Dame because her father founded a biomedical research company that successfully developed an enzyme treatment for her Pompe disease.
Like many survivors of severe diseases and injuries, she lives with significant physical disabilities she must manage. The President used her case to argue for fewer FDA restrictions on innovators like her father.
No question, America must continue to promote a business environment that encourages medical research and development. But the pressing problem for anyone living with a serious disability is getting the medical services, equipment and independent living support they need now. No amount of entrepreneurship can provide the human-to-human services any cheaper.
These are simply the fixed costs of operating any decent society, the kind that values even people whose parents didn’t found companies on their behalf.
To misunderstand that basic principle is as clueless as comparing your buying an iPhone with buying the false promises the American Health Care Act of 2017 is selling.