Some thoughts I have on Trumpcare
I don’t quite think I have to reintroduce myself to all of you, but it truly has been a long time since I sat down and wrote a piece for the consumption of my readers. (Editing Cathy’s last piece and writing two articles for the Patriot Post doesn’t really count for that purpose, nor does updating my Shorebird of the Week Hall of Fame page to add a couple player moves.) Unfortunately, things won’t improve on that front for some time, but the opportunity which presented itself to take my writing time was one I could not pass up.
But in this interregnum, we were given the bill to “repeal and replace” Obamacare, and since we are told President Trump has threatened to find primary opponents for any Republican who opposes it, I think I’m safe in calling this package Trumpcare. It’s still a government entitlement because there was a replace added with the repeal, and that already put a strike against it in my book.
The document I am going to base my initial impressions on will be the “talking point” document put out by the House GOP. To be honest, I really don’t have time at this point to read the original 123-page bill in depth, although I downloaded it for future reference and glanced through it to help with this piece. I look at this website as what the House Republicans are using as their chief selling points to the bill, so presumably this is their vision for federally-sponsored health care going forward. We have lived under Obamacare for about three years (as I recall, the major provisions did not all take effect before 2014, although some were in place shortly after the bill passed in 2010) so we know its effects: sizable increases in insurance premiums, a massive expansion of Medicaid (paid for in large part by Uncle Sam) to ratchet up the number of people with health insurance, subsidies for those who have less than a certain income yet are forced onto or choose to partake in the individual insurance market, the reduction in the number of competing insurance companies in many areas of the nation (some have just one insurer available to them), and the virtual elimination of catastrophic health insurance plans as insufficient for the needs of those insured. There were also a number of regulations and restrictions on insurers put in place, key among them the requirement of children being covered under a parent’s policy through the age of 26 and the elimination of discrimination based on pre-existing conditions.
With this massive incursion into private industry, for the first time the federal government required purchase of a product under penalty of law – those who chose not to buy health insurance were subject to a “shared responsibility payment” collected by the Internal Revenue Service. Imagine if you had to buy a car every four years whether you were happy with the one you had or not, and you may have the idea of how people felt about this. Obviously the economics of it were to make everyone pay a little something, but that’s not the way a free country is supposed to work for something that’s not essential to core functions of government.
Here are some of the provisions within the American Health Care Act (AHCA):
- It “dismantles” the Obamacare taxes on prescription drugs, over-the-counter medications, health insurance premiums, and medical devices.
Okay, so far so good, although I suppose the definition of “dismantle” is in the eye of the beholder. I glanced through that section of the bill and it looks like this would not take effect immediately but at the end of this year. As a whole, individuals may see a little bit of savings but it won’t be something they will notice.
- It eliminates the individual and employer mandate penalties.
This is perhaps the best news of all, but there is one huge catch to this: instead of paying this as a tax provision, you would have to pay a penalty to the insurance company in the form of a surcharge on premiums if you start up insurance again after not having it for a period of time. And that catch basically negates the whole benefit of removing the IRS from the equation, although I suppose an insurer could use the waiver of this surcharge as an incentive to bring people in.
- It maintains the prohibition on charging more or denying insurance based on pre-existing conditions.
I have a big problem with this – not that it wouldn’t necessarily benefit me because I have asthma but because the idea for an insurance company is to make a profit by balancing the risks shared by the vast pool of policyholders with the expenses incurred by reimbursing those insured for loss. If someone is very likely to be a net loss to the insurer because they have a pre-existing condition, it should be the right of the insurer to refuse service. After all, banks don’t lend money at the prime interest rate to people who have poor credit records or no verifiable means of income because that would put their capital at too much risk for the return, so they either refuse the customer outright or charge an interest rate commensurate with the risk. That should be the right of a private insurer, too.
I was reading on social media that Maryland once had a high-risk pool for such patients, which was bankrolled by the state. While it’s not the use of taxpayer money that would be my most favorite, it is a state’s right to do so if they chose and there was nothing wrong with that system because it wasn’t directly competing with the private sector.
- It keeps the provision of dependents being on their parents’ plan until they are 26.
This is another bad feature of Obamacare that should be buried with the rest of it. If you are 26 you should be able to stand on your own two feet and either be working for someone who offers insurance or be able to afford a plan on your own. (Or choose not to have insurance, which would be your right - although not necessarily recommended.)
- AHCA also establishes what it calls a Patient and State Stability Fund.
Over the next nine years, the federal government will give out $100 billion to the states to assist them with their goals of insuring every citizen. I read quickly through this section and there are some provisions that give me heartburn: there are strings attached to the expenditure of the money and the states are required to come up with a larger and larger portion of matching funds for whatever they use the money for, up to 50 percent by the end of the program in 2026 – assuming, of course, this doesn’t become a more perpetual giveaway (which I’m convinced it will.) There is $15 billion allocated to this over the next two years and $10 billion per year after that, and I’m sure states will say this isn’t enough because they like that financial crack of Uncle Sugar’s money.
- Modernize and strengthen Medicare by transitioning to a “per-capita allotment.”
The legalese on this one is beyond my scope of comprehension, but to me the idea of modernizing Medicare would be that of sunsetting it, not strengthening it.
- Enhance and expand Health Savings Accounts.
One of the better features, although it would be even better with the free transfer of money between HSAs and other entities such as an IRA or 401 (k). If you needed more money in a particular year you should be able to move it without penalty.
- A monthly tax credit for those who can’t afford insurance, up to $14,000 per year.
A subsidy under a different name. Basically they are replacing one tax scheme with another, still targeted to particular people.
All in all, I think the repeal should take place without the replace. It seems to me that we had a whole political movement and a bumper crop of angst spring up over the last eight years because people did not want any part of the government interference in their health care that Obamacare brought to us. Over that time, we lived with the disappointment of Republican excuses: “we’re only one half of one third of government,” “we have the House and Senate but the President won’t sign this,” “we can’t defund because there would be a government shutdown,” and so forth. After 2016, there was a Congress and President who campaigned on repeal, and yet you give us this?!?
A better alternative may be the plan presented by Senator Rand Paul, although it’s not perfect either. But it’s better than the GOP alternative, which is a great letdown for those of us who waited for the moment to eliminate the (not so) Affordable Care Act.