Nel's New Day

February 4, 2014

‘Obamacare’ Headed for Another Repeal

Filed under: Uncategorized — trp2011 @ 10:15 PM

The conservatives are dancing around the funeral pyre of the Affordable Care Act (ACA) after the Congressional Budget Office (CBO) announced that the healthcare law can cause a $1 trillion increase in deficits because of 2.3 billion jobs lost by 2021. The CBO reported that the reduction would be through people leaving the work force because of lower wages and increased insurance coverage, reported conservative The Hill.

The article did announce that the deficit for this year should be $514 billion. It didn’t mention that this is down greatly from last year and almost one full trillion dollars below the annual deficit that George W. Bush left the country. At 3 percent of the GDP, the deficit matches the average for the past four decades. Also the unemployment at the end of 2014 is predicted at 6.7, lower than earlier projections.

The GOP thinks the report proves that the ACA is a “jobs killer,” but they missed the point. People aren’t being fired or having their hours shortened. The CBO said these are people who choose not to work. These are the people who worked only because they needed health care–older people and parents who want to retire or stay home.

“The estimated reduction stems almost entirely from a net decline in the amount of labor that workers choose to supply, rather than from a net drop in businesses’ demand for labor, so it will appear almost entirely as a reduction in labor force participation and in hours worked relative to what would have occurred otherwise rather than as an increase in unemployment (that is, more workers seeking but not finding jobs) or underemployment (such as part-time workers who would prefer to work more hours per week).”

As Matt Yglesias put it, “Obamacare will kill jobs in the same way that Social Security kills jobs.”

The CBO report probably provided impetus for the House Ways and Means Committee, which met this morning to ready two more repeal bills. Save American Workers (SAW) Act, H.R. 2575 would repeal the healthcare law’s definition of “full-time employee,” defined as anyone working 30 or more hours per week. H.R. 3979 would eliminate a requirement that municipalities treat volunteer firefighters as employees who must be offered health insurance. This covers only municipalities that have 50 or more volunteers working more than 30 hours a week. The IRS has already stated that these volunteers will not be considered workers.

Another GOP attempt to repeal the ACA is the Patient Choice, Affordability, Responsibility and Empowerment Act (Patient CARE Act), unveiled last week by three GOP senators—Tom Coburn (OK), Orrin Hatch (UT), and Richard Burr (NC). 

“Patient CARE” repeals ACA; therefore three million people who enrolled in new plans through the marketplaces and millions more who just became eligible for Medicaid in states that expanded the program would lose their health coverage. The bill would also have a “per capita cap” on Medicaid funding, permitting only a highly selective group of people, primarily pregnant women, women with children, and the disabled to obtain Medicaid. Everyone else would have to buy more expensive private insurance.

“Patient CARE” would not require insurance companies to provide health protection such as free checkups, screenings for HIV, mammograms, and no-cost birth control. ACA requires “essential health benefits” such as maternity care, mental health care, and prescription drug coverage. “Patient CARE” doesn’t.

“Patient CARE” would allow younger people to pay lower premiums and require women to return to the old days of paying $1 billion more than men. ACA requires equal payment from all–young and old, male and female.

“Patient CARE” would allow insurance companies to deny people based on pre-existing conditions, something as simple as a person needing three prescriptions for estrogen replacement, high blood pressure, and thyroid adjustment. Under ACA, insurance companies cannot refuse to cover people because of pre-existing conditions.

“Patient CARE” also sets annual caps on care. After people hit that cap, they pay the full amount for the health care until the end of the year. It does have a vague reference (a strong point for GOP legislators) to federal funding for “high-risk pools,” which have historically suffered from long waiting periods, inefficiencies, and high costs for both consumers and the government.

“Patient CARE” would require people to pay higher income taxes. The 150 million people who are insured through their employment would have to pay taxes on at least 35 percent of the employer coverage for insurance because the bill also sets a cap on the federal tax exclusion for employees’ health care. The ACA taxes only the top plan, called the Cadillac.

“Patient CARE” provides a flat subsidy that increases with age and is available only to those up to three times the poverty level, instead of the ACA’s sliding scale up to four times the poverty level. Under “Patient CARE,” families with below $11,000 or almost $50,000 get the same amount.

In the four months since ACA rolled out to a rocky website start, people have discovered that it benefits them. Instead of an open repeal, the GOP wants a bait-and-switch to ensure that they will be re-elected this coming fall. Keep in mind that as bad as the alternatives are, the GOP wants to first repeal the current healthcare law. Then we can hope that they will pass something else.

With the new GOP plan, there are no exchanges, no benefits that insurance plans are required to cover. It offers tax credits, very modest, tax credits instead of subsidies, guaranteeing skimpy health coverage. With no exchanges, people would have to do their own price-comparison, relying on brokers and private-sector websites. Once again, they would be enticed into purchasing bare-bones catastrophic coverage with excessively high deductibles and co-payments that would prove to be inadequate.

An editorial in the New York Times gave the best summary:

“The plan would repeal the Affordable Care Act and substitute an alternative that would likely cover fewer uninsured people, raise premiums for many older adults, shrink Medicaid, cut back on subsidies for middle class Americans, scale back protections for people with pre-existing conditions, and allow private insurers to escape many of the consumer-friendly requirements now imposed on them.

“It is a blueprint for what the Republicans hope to do if they capture the White House in 2016. They say they are relying on market competition to keep costs down; empowering consumers to choose plans they want, not plans whose benefits are set by the federal government; emphasizing private insurance, not government programs; and giving states the primary role in managing the reform effort.

“All of these ideas have been debated for decades, and the most important have been incorporated into the existing reforms, which also rely on market competition and give consumers tools to choose among private insurance plans. In fact, the Republican plan keeps some parts of Obamacare that the public has embraced — like guaranteed coverage for pre-existing conditions in some circumstances, allowing children to remain on their parents’ policies until age 26, and barring insurers from imposing lifetime benefit caps. But simply grafting those popular elements onto a package that reduces coverage will not mask the defects in the Republican plan.”

Steven Benen writes:

“What we’re left with is a genuine mess. The Burr/Coburn/Hatch bill covers fewer people and leaves more consumers with worse insurance. It would send cancelation notices to millions. It would force tens of millions to pay more for the coverage they already have. It would strip families of consumer protections that now exist, including a return to insurers charging women more than men. It would impose new risks on those with pre-existing conditions.”

“Patient CARE” proposes help for everyone except people in the United States who need health insurance. No one has signed on to it yet. The GOP may have a funeral pyre without a body.


1 Comment »

  1. Thanks for the analysis–nice job!


    Comment by jcothron — February 4, 2014 @ 11:09 PM | Reply

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