Health Care

Yes, the Republican Health Plan Is Still that Bad

Health care
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Big health care cuts and huge tax cuts for the wealthy few are back on the front burner for Congress. President Donald Trump is now saying he expects to have a deal with congressional Republicans for a health plan this week or shortly thereafter.

Just a month ago, Trump said he was moving on to do tax cuts instead of health care after House Speaker Paul Ryan (R-Wis.) failed to get enough votes in the House of Representatives for their bill repealing the Affordable Care Act.

The deal Trump and congressional Republicans are trying to cut now is really just the old plan from March with a few changes in which they are trying to paper over differences among House Republican leaders.

The old plan clearly was bad for working people and retirees.Congress budget experts said it would take health benefits away from 24 million people, by cutting the number of people with Medicaid by 14 million and those with benefits at work by 7 million, and spike out-of-pocket premiums and other costs for millions more people. At the same time, the Republican plan also would be a massive wealth transfer to the wealthy few. It would give the average millionaire household a $50,000 per year tax cut and prescription drug and insurance companies hundreds of billions of dollars in tax breaks.

So, what is in the plan now? Pretty much all of the bad stuff from the old plan—that is, it is still a massive tax cut paid for by cutting health care for working families and retirees—plus more.

Based on news reports, the Republican plan still:

  • Jacks up individual premiums for older people, as well as those with lower incomes and living in areas with high medical costs.
  • Takes away help for people who struggle to pay high insurance deductibles, co-pays and co-insurance.
  • Guts Medicaid by phasing out the ACA’s expansion of Medicaid eligibility to more working-age adults and ending the federal funding guarantee in favor of a fixed-dollar contribution.
  • Cuts Medicare funding to give a huge tax break to the wealthy few and prescription drug companies.
  • Taxes the health benefits of millions of working people with high-cost health coverage.

What are the changes in their revised plan? To meet the demands of some House Republican leaders who want even bigger health care cuts, the new Republican plan also lets states decide whether to get rid of certain protections.

According to a leaked document, states will be given the option to get rid of the so-called essential health benefits rules, which require insurance to cover a minimum set of benefits, such as prescription drugs, emergency care and maternity coverage. The earlier plan would have eliminated this minimum benefit requirement outright. Now, a state will have to ask the federal government for a waiver. In exchange for a waiver, a state will simply have to say—but not prove—that the purpose of these changes is to reduce premiums, increase coverage or advance some other benefit to the state.

Under the new plan, a state also can get rid of the ACA protection against an insurance company charging higher premiums for someone with a pre-existing condition. Where this happens, someone with a pre-existing condition could end up paying a whole lot more just to get basic health insurance. According to a recent estimate by the Center for American Progress, insurance companies likely would charge a 40-year-old with diabetes an extra $5,510 per year and someone with certain cancers as much as $140,510 more.

In exchange for letting insurance companies do this, a state would need to have a so-called high-risk pool. These are arrangements set up by governments to offer coverage to people who cannot get or afford insurance anywhere else because they have costly conditions. These pools existed before the ACA and were notorious for not working very well. Premiums were still high, and the programs were so poorly funded that only a small fraction of the people who needed them could get in.

The new Republican plan also would create an “invisible” reinsurance program. Very little has been revealed about this, but the basic idea is each state would run a program that pays for some of insurance companies’ costs for people with expensive conditions. The federal funding for this would be so low, however, that the big cuts in the rest of the Republican plan swamp any impact from it. The Center for American Progress estimates the average enrollee would have to pay $3,000 more by 2020 under this plan.

What’s the bottom line for the revised Republican plan? The more things change, the worse they get.

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