Insurance Would Be Just An Accessory

The Republican Bill on the repeal will just have to wait for something for friendly.

Since its passage through the House of Representatives, under the control of Democrats in 2009, the Obamacare repeal plan has been the basis for Republicans’ campaign trails and their election victory. Now that they are in position to implement the repeal fully and permanently, Republicans have no excuses, but to meet their promise. The Republicans’ proposal to replace Obamacare passed in a close vote last month. Ted Cruz’s repeal plan, at this juncture, comes as a confusing, distasteful outcome. It would stifle the markets and create imbalances between the insured and uninsured, and the high premium payers, and the low premium payers.

The Obamacare was beneficial as it increased the insurance cover through the expansion of the Medicaid program to cover low-income individuals, prior to which the health law was limited to certain low-income Americans, like the disabled and pregnant women. In the 31 states that preferred to participate, Obamacare opened up a medical program to people living below 138% (~$15,000 per individual) of the poverty line.

However, the Republicans want to freeze the Medicaid enrolment expansion by disallowing States from enrolling new people from January 1, 2020. The new bill aims at converting Medicaid program into a “per capita” system in which the States would receive a lump sum from federal government enrolees. This would create a block grant opportunity for the states – getting huge sums of money from the participants, but still being unattached to them.

Regardless of how high they go, the federal government, under the current Medicaid funding, is committed to paying all enrolee’s bills. The per capita cap may amount to about $880 billion cut into Medicaid. Further, the block grant would extend, weakening the coverage protections for parents and children.

An amendment proposed by Rep. Tom MacArthur in April 2017 revised the Republican Bill to allow States to waive out Obamacare’s community rating provisions. This would imply that sicker people could be charged higher premiums again. Accordingly, only individuals with health coverage break-in would be insured under the waivers. The insurers would charge premiums on the basis of the patients’ pre-existing history. This would be a significant deviation from the Obamacare plan, which prohibits this approach.

The Republican plan would let States waive out of the Obamacare’s essential health benefits requirement contained within the Affordable Health Care Act (AHCA). This implies that the plan in the respective markets would not cover maternity care as it were the case with 88 percent of the plans prior to the AHCA.  It would probably lead millions to losing health insurance coverage, with the essentials uninsured, all over again.

The Congressional Budget Office (CBO) score for the new Bill established that about 24 million individuals would be uninsured by the year 2026. Subsequently, the Bill would work to the benefit of a few and to the disadvantage of many. For instance, some of Obamacare’s essential features such as tax on people who don’t purchase healthcare – individual mandate – would be phased off, although protections like provision for young adults to stay on the parent’s plan until 26 years of age would last. Second, the States would be allowed access to two waivers from Obamacare’s essential healthcare benefit requirements – insurers to (a) cover only essential health benefits and, (b) charge same price on individuals irrespective of their pre-existing healthcare history. Under the AHCA, on the other hand, the Medicaid coverage expansion would survive until the end of 2019, after which no enrolees, even if eligible, would be enrolled to the program. The Medicaid coverage would thus shrink, since people are used to opting in and out of the program subject to employment situation and income dynamics.

The Republican plan would alter how the federal government would reimburse the States for the Medicaid program, especially. The block grant option rather than per-person payment would cut into the program. Despite easing limitations on the States’ mandate to kick people off the program, block grant could add a workload for non-disabled adults, limiting access to the program further. Obamacare’s tax hikes helped to hit the wealthy Americans so as to pay for its expansion mechanism, while the Republican bill would rid the tax cuts that benefit the wealthy. But, Obamacare helped to redistribute wealth across the poor and the rich, a phenomenon that would turn on its head upon passing the incoming AHCA plan. This does not seem possible with the Republican Bill. Consumer-focused universal health care is nowhere near. The low-income and sicker individuals would be further penalised.

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