Gov. Paul LePage Tuesday raised important concerns about a Republican plan to replace the Affordable Care Act. “We don’t know what the cost is,” the governor said during a radio interview. “I don’t think it’s an improvement,” he added.
Essentially, Republican lawmakers, led by House Speaker Paul Ryan, have cobbled together a plan that keeps the parts of the ACA that Americans like and jettisons — or renames — the unpopular parts. The result, the American Health Care Act, is a watered-down, less functional version of the ACA that will cover fewer people, raise health insurance costs for the sick, old and rural and cut taxes for the wealthy.
Rather than rush it through Congress, which Republican leaders plan to do, those intent on repealing the ACA should go back to the drawing board — or better, acknowledge they can’t come up with a better plan.
The Republican plan, which has been panned by some of Congress’ most conservative members as well as the nation’s hospitals and patient advocate groups, continues to prevent insurance companies from excluding people with pre-existing health conditions or charging them more, and it allows young people to stay on their parents’ plans until they are 26.
But that is where the positives end. The so-called individual mandate, which required Americans to be covered by health insurance or face a tax penalty, was much maligned. It is dropped from the Republican plan. But under their proposal, if someone lets her insurance coverage lapse for more than two months and then wants to purchase a new plan, that person must pay 30 percent more for one year.
Whatever it’s called, this looks like a penalty, and worse, the money goes to insurance companies rather than the U.S. treasury.
The only time someone is likely to purchase insurance after a long lapse in coverage is when he or she is sick and needs medical care. That makes this 30 percent surcharge, in essence, a tax on the sick. This provision also does nothing to bring young, healthy people into the market, which is needed to spread out costs and risk across the insurance pool. Since it, in effect, allows people to delay buying insurance until they are sick, this exacerbates the problem addressed by the individual mandate.
The Republican plan replaces tax credits based on income with tax credits based on age. As a result, according to an analysis by the Kaiser Family Foundation, Americans who are older and low income would fare worse under the Republican plan. A 27-year-old from Aroostook County earning earning $20,000 per year would see his or her health care tax credit drop by $3,430 under the GOP plan. A 40-year-old living anywhere in Maine and earning $75,000 per year would gain $3,000 in tax benefits.
In addition to gutting the ACA, the Republican plan would fundamentally change Medicaid, undermining an expansion that allowed low-income Americans to gain coverage. The federal program now reimburses providers for the medical care they provide to those covered by Medicaid. The Republican plan would send the states a set amount of money based on the number of Medicaid patients who live there.
The Republican plan also proposes reductions in spending for public health, such as vaccines and disease prevention. It would bar Medicaid recipients from using their insurance at Planned Parenthood or other providers who perform abortions — even though federal Medicaid funds can’t cover abortions already — and it would offer incentives for private insurers that drop abortion coverage.
The rating agency Standard & Poor’s predicts the Republican plan would cause between 6 million and 10 million Americans to lose their health insurance coverage. Insurance companies would see increased profits, the agency noted.
One early projection, from the Joint Committee on Taxation, says the Republican plan will cost nearly $600 billion over 10 years just in repealed ACA taxes — even as millions of people lose insurance coverage. The reason? The GOP plan’s tax breaks for the wealthiest Americans. The plan would eliminate the net investment income tax, which imposes a surcharge on some investment earnings and on high wages. These taxes raised $27 billion in 2015.
The Republican authors of this plan don’t seem to care much about its costs or consequences. Committee hearings are scheduled to begin this week, and a House vote is slated for March 20.
That’s a pretty fast timetable for such a consequential piece of legislation — a rush that might succeed in hiding the health care plan’s many failings.
