Republican Obamacare Replacement Does All the Wrong Things

Republicans propose to give higher incomes a break and take help away from those who need it the most.

Republican House speaker Paul Ryan meets with religious leaders in Washington DC, March 2, 2016
Republican House speaker Paul Ryan meets with religious leaders in Washington DC, March 2, 2016 (Bread for the World)

It’s hard to unite health-care commentators from the left and the right, but that’s what House Republicans have done with their plan to replace Obamacare.

The left is appalled that Republicans would make health care cheaper for Americans who are well-off and leave those who currently depend on Obamacare in the cold.

The right is disappointed that the plan only eliminates the individual mandate but keeps other parts of Obamacare in place, including the principle of federal subsidies and its insurance plan requirements.

I share both criticisms.

Shifting the burden

The Affordable Care Act introduced tax credits to pay for insurance and tied them to an American’s income and address. Which makes sense. Insurance is more expensive in some states than others, depending on the size of their insurance market and the extent to which states regulate.

Republicans want to replace this with a fixed credit that are tied to a person’s age. I don’t see how this is fairer.

It gets worse.

Whereas under Obamacare, Americans with incomes up to 400 percent of the poverty line are eligible for credits — $47,520 for an individual — Republicans propose to raise the eligibility ceiling to $75,000 for individuals and $150,000 for families.

At the same time, they would phase out Obamacare’s Medicaid expansion and eliminate the tax increases that were part of the Democratic plan.

The net result would be that relatively wealthy Americans, with incomes in the $50-75,000 range, are better off while those struggling to make ends meets might lose their health insurance altogether.

“Minimum” requirements

Another right-wing complaint about Obamacare, which I share, is that it needlessly makes insurance more expensive by setting “minimum” standards for plans.

For example, every American must now insure against the costs of childbirth and psychiatric treatment. Even if you’re a man. Even if you have no history of mental illness.

Republicans agitated against this for years and now they want to keep it?

Excessive regulation

Finally, the replacement bill does little to control rising health-care costs.

Conservatives have years argued for weakening licensing requirements, which would allow nurses to perform simple medical procedures, and creating a nationwide insurance market. Neither is in the Republican proposal.

To be fair, much of this is due to excessive regulation at the state level. But Republicans control most state governments. They have the power to lead a national effort to harmonize rules and cut costs.

But that would take more than slogans. It would take a serious, years-long commitment to improving health care for all Americans.

It would also mean a willingness to face down interest groups, including those representing doctors, and it seems nobody has the courage to do that.

Illiberal

I would go further. The whole American system of enabling insurance through employers is illiberal. The tax system ought to be changed in order to shift that incentive 180 degrees. You shouldn’t lose your health insurance when you lose your job, nor should you be afraid to quit your job because you can’t afford to lose your health insurance.

A party that really prizes personal responsibility would make this their top priority.

But the best Republicans can come up with is giving higher incomes a break and taking help away from those who need it the most.

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