Editor’s Note: This is an analysis and parts of the post contain the author’s opinions.
Republicans and the American Health Care Act, legislation backed by President Trump to repeal the Affordable Care Act (Obamacare), passed the House of Representative Budget Committee 19 to 17 this week, but its chances of actually passing in Congress are still unknown. The reality of Obamacare actually being “repealed and replaced” remains.
Republicans argue that passing the American Health Care Act is necessary to keep Obamacare from “imploding” and to get rid of the high-deductible plans many have complained about.
The Congressional Budget Office predicted that up to 24 million Americans could lose health coverage by 2026. CNN and other mainstream media outlets have nicknamed the changes “RyanCare” because GOP Speaker of the House Paul Ryan made a hard-sell plea to politicians, complete with a Powerpoint presentation. ABC News reported that the American Hospital Association, the American Medical Association and the American Academy of Pediatrics are all opposed to the bill.
In the second installment of our Trump and Obamacare series, the UMHS Endeavour looks at exactly what Republicans propose to do to “replace” the Affordable Care Act (ACA) under the new Trump administration, and what this means to the public, medical students and future doctors. We will look at information from the Washington Post, Reuters and other sources.
We will include the Republican argument for the American Health Care Act and why Obamacare should be “repealed and replaced.”
Finally, we will analyze what the proposed changes mean for medical students, current and future doctors.
Focus on Consumers, GOP Says
Many Republicans want to repeal Obamacare to put the focus more on consumers and less on government subsidies.
“Empowering the individual as the key decision-maker in the market is the only way to lower costs while increasing the quality of care,” says the Conservative Review website. “Reforms that allow the market to become more transparent and competitive should be passed. To that end, individuals should be free to purchase insurance across state lines and from whatever company they choose.”
A Look at 8 Proposed Changes
In an article by Darla Cameron and Leslie Shapiro, the Washington Post outlined the proposed changes to Obamacare under two plans drafted by House Republicans.
Below is a look at eight proposed changes under the American Health Care Act (as outlined in the Washington Post article), information on the Republican viewpoint, and how the UMHS Endeavour feels the changes could affect future doctors.
- No More Penalties: Say goodbye to the individual mandate. Those who don’t have health insurance could no longer be penalized by the government. Instead, insurance companies would be able to tack on a 30% surcharge for “consumers who purchase a new plan after letting their previous coverage lapse.” This is meant as an incentive for Americans to keep insurance. The “employer mandate” on larger companies, forcing them to offer affordable coverage, would also disappear.
Republican Viewpoint: GOP leaders have been against the individual mandate since the Affordable Care Act was first passed. “”The federal law compels American citizens to contract for health insurance they do not want, do not need, or find morally objectionable,” Bob Marshall, a state legislator in Virginia, was quoted as saying in Politifact. “Persons who decline to buy the coverage face fines and imprisonment.”
How This Affects Medical Students, Current & Future Doctors: Younger people working part time may not be able to afford health insurance and large corporations may offer higher-priced insurance with high deductibles. Older patients could be affected, too. This could lead to people avoiding going to the doctor and also avoiding important outpatient cancer-screening procedures like colonoscopies (which can have out-of-pocket deductibles costing $1,000 and up). Doctors may have difficulty getting patients to actually have these procedures done because people will avoid paying high deductibles.
- Tax Credits & Subsidies: Under the ACA, Americans are eligible for tax credits that are “based on age, geography and other facts that benefit lower and moderate-income people buying coverage through ACA marketplaces.” This would stop in 2020. Instead, the GOP plan offers tax credits based on income and folks “buying on their own any health insurance sold in their state.” The Washington Post explains in a chart how people age 20 to 29 would get a tax credit of $2,000 and credits increase with age. For example, Americans age 40-49 would get a $3,000 credit; 50 to 59, a $3,500 credit; and $4,000 for those 60 and older. The credits are phased out “for individuals making more than $75,000 and joint filers making over $150,000” and “for each $1,000 in additional income above the limits, a person would be entitled to $100 less in credit.” There’s a cap of maximum credits of $14,000 per family. The credits can be used for “any health plan allowed in a state, including ones providing only catastrophic coverage.” The credits cannot be used for any health plans that cover abortion.
Republican Viewpoint: “The best way to improve quality of care while reducing the cost of medical care and health insurance is to empower the individual consumer with the freedom and knowledge necessary to best spend his or her own healthcare funds,” says the Conservative Review website.
Many Republicans believe such things as tax credits and subsidies will lead America toward a more consumer-centered health care system.
How This Affects Medical Students, Current & Future Doctors: The GOP legislation encourages health insurance plans to not cover abortion. Whether one agrees with abortion or not, young women could be extremely limited in options for health coverage as a result.
- Charges for Older Customers: Presently insurance companies can charge “up to three times” what younger patients are charged, but the GOP legislation means insurers can charge older Americans “up to five times” over what young patients pay.
- Pre-Tax Health Savings Accounts: Individuals would be able to contribute up to $6,550, while families could contribute up to $13,100 to pre-tax health savings accounts. Under Obamacare, individuals are only allowed to contribute up to $3,400 and families up to $6,750 to pre-tax health savings accounts.
- Cost-Sharing Subsidies & High-Risk Pools: Subsidization of current Obamacare patients for help with co-payments and deductibles would end in 2020. Instead states would “receive over $10 billion over 10 years through a new Patient and State Stability Fund” for “high-risk pools for consumers with expensive medical conditions.”
Republican Viewpoint: Obamacare has created rising costs for the few insurance companies that still offer it, especially since more older Americans (with more expensive health issues) are on the plans than healthy younger folks. While charging older Americans more seems unfair, it’s really no different than other types of insurance with premiums based on age (such as life insurance). Costs must be covered. Pre-tax health savings accounts would allow many to save up for anticipated medical expenses each year, with convenient payroll deductions that are not taxed.
How This Affects Medical Students, Current & Future Doctors: Because insurance premiums would skyrocket for older Americans, some might avoid going to the doctor as often as necessary. The pre-tax health savings accounts would give patients more freedom regarding doctor choice and this might benefit doctors, but pre-tax health savings accounts primarily benefit people working full time who can afford to have payroll deductions made into these accounts. Part-time employees and students would not be able to take advantage of these accounts, and might deter some younger folks from seeking health care. In addition, low- and middle-income families may not be able to afford to put much into a pre-tax health savings account. Many live paycheck to paycheck.
While creating a special fund for high-risk pools sounds great in theory, wouldn’t it create more red tape for people with serious medical conditions?
- Medicaid Expansion: The GOP legislation would have a big effect on Medicaid. The Washington Post said 31 states expanded their Medicaid plans for impoverished Americans under Obamacare. The GOP bill would continue covering beneficiaries until 2020. “After that, the government would keep paying 90 percent of beneficiaries already on the rolls as long as they remain eligible,” the Post said. “Starting in 2020, new beneficiaries would be funded at a lower level.” In addition, coverage of substance abuse and mental health services “would no longer be required for this population.”
Republican Viewpoint: Some Republicans believe Medicaid burdens “state budgets and provides people with substandard health coverage,” according to Bloomberg.com. The website also talks about a National Bureau of Economic Research Paper that claims Medicaid leads to “significant and lasting reductions in employment among childless adults.” The argument is that taking away public health insurance leads to “stimulated job search activities.”
How This Affects Medical Students, Current & Future Doctors: Taking away health care from the poorest Americans would be chaotic. Not paying for treatment of substance abuse and mental health services for the poor is outrageous considering many of the homeless (in New York City, for example) desperately need both types of treatment.
- Key Elements of Obamacare Would Remain: Four things will stay. Health plans won’t be allowed to deny anyone coverage of preexisting conditions. Children can stay on their parents’ plans until age 26. A ban on annual or lifetime coverage caps would remain. Finally, “Insurers would still have to cover certain categories of specified benefits first covered by the ACA.”
- Planned Parenthood: The national nonprofit for women’s health services will no longer be eligible for “reimbursements or federal family planning grants.” The nonprofit would have a one-year funding freeze.
How This Affects Medical Students, Current & Future Doctors: Keeping the key elements of Obamacare (like not denying coverage for preexisting conditions) is a relief to doctors across the nation.
The one-year funding freeze for Planned Parenthood is puzzling. The nonprofit provides many health services to women, such as mammograms, vaccines and cancer screening. Under Obamacare, no federal funds are paid for any abortions provided by Planned Parenthood, so is it necessary to cut off women from badly needed health care for an entire year?
Is it possible for Republicans and Democrats to work together on this issue to create the best health care plan for all Americans? Of course. The UMHS Endeavour will be closely monitoring the American Health Care Act in the coming months.
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