In the United States, it is rare to find hospitals, insurers, and consumers rallying against the same legislation. However, the House of Representatives managed to unite these disparate groups when it passed legislation to repeal and replace the Affordable Care Act, the law that many Americans only recently realized is one-and-the-same as “Obamacare.”
The bill, titled the “American Health Care Act of 2017,” was introduced on March 20, 2017 and was narrowly approved by House Republicans by a vote of 217 to 213. One of the key provisions of the bill removes the ACA provision requiring individuals to buy health insurance. Instead, it implements a requirement that insurance companies may not cut off or increase premiums for individuals with enumerated preexisting conditions, so long as the individual’s insurance coverage does not lapse for more than 63 days at a time. If coverage does lapse, the AHCA permits insurance companies to charge 30% more for the individual’s monthly premium for one year.
Unsurprisingly, the “winners” under the AHCA are healthy, upper-and-middle class, and young, while the “losers” are poor, sick, and elderly.
To help the wealthy, the bill eliminates the ACA’s 0.9% increase in the Medicare payroll tax and 3.8% investment income tax for individuals earning more than $200,000 and couples earning more than $250,000 a year. It also provides subsidies to help with insurance costs for individuals earning up to $150,000 per year, a dramatic increase from the $48,000 per person permitted under the ACA.
It also hurts those who are sick. The bill permits states to apply for waivers from many of the regulations and consumer protections contained in the ACA. Under these waivers, states can allow insurance companies: (1) to eliminate required coverage for essential health benefits, including maternity care, mental health, and prescription drugs, (2) to charge individuals more, or deny coverage to individuals, who have pre-existing conditions, and (3) to put those with preexisting conditions in special high-risk pools. An AARP study predicted that if states implemented these measures, people with pre-existing conditions could pay premiums as high as $25,700 annually.
The poor and elderly will also be among the losers. The AHCA would reduce the Medicaid expansion currently available to childless adults between the ages of 19 and 64 in 31 states, and would substantially reduce the subsidies available for the “working poor,” Americans living just above the federal poverty line. This would force low-income individuals to spend much more of their limited incomes on insurance coverage, and ultimately result in lapses in coverage for those hovering around the federal poverty line. The bill also allows insurance companies to charge older people five times more than younger people, an increase from the three times permitted under the ACA.
The AHCA would also change the funding method for Medicaid from one in which the federal government pays a share of all costs to one in which it pays a set block grant or fixed amount for each enrollee. In March, the CBO estimated that this change would cut Medicaid spending by $880 billion over 10 years with the likely loss of health insurance coverage for millions of Americans.
Women would also be big losers under the AHCA. It prohibits the use of federal tax credits to purchase insurance plans that cover abortions. And any visit to a Planned Parenthood clinic, or any service offered by Planned Parenthood, including annual checkups, breast exams, cervical cancer screenings, mammograms, and menopause care, cannot be covered by federally subsidized insurance for one year. Although none of the $500 million the organization receives each year from Medicaid may currently be used for abortion services, the bill takes away Medicaid reimbursements for all of Planned Parenthood’s services. This coverage represents 40% of the organization’s overall budget, and 75% of its federal funding.
Representatives of hospitals, insurance companies, and consumers, have spoken out strongly against the AHCA. Marilyn Tavenner, president and CEO of America’s Health Insurance Plans (AHIP), lamented that the [AHCA] “needs important improvements to better protect low-and-moderate-income families who rely on Medicaid or buy their own coverage.” The Federation of American Hospitals stated that the House’s passage of the AHCA was “disappointing, but not surprising,” emphasizing that, “the AHCA fails to protect health coverage and access to care for so many Americans.”
This bill would do tremendous harm to those who are most needy and help those who need it the least. It deserved to be quickly rejected by the Senate.
Mara Smith is a third-year student concentrating in health law at the Thomas R. Kline School of Law at Drexel University.