The American Health Care Act: The Republicans’ Repeal and Replacement of Obamacare — Meta-Analysis & Brief Summary by Jack Carney, DSW
Part I – Meta-Analysis: The American Health Care Act (AHCA), the Republicans’ long-awaited repeal and replacement of Obamacare, not only represents the fulfillment of Speaker Ryan’s and his Conservative and Tea Party members’ wish to repeal the Affordable Care Act (ACA), but is an attack on our social safety net and, more importantly, on the power of the Federal Government to mandate compliance by the States with safety net legislation. The principal targets of the attack, Medicaid, the largest safety net program outside of Social Security and Medicare, and the ACA itself contain mandates that the Republicans and the States they govern have resisted from the outset. More on this below. As for Planned Parenthood, the other program singled out, its loss of access to Medicaid reimbursement in the next fiscal year is more a consequence of the animus held against it by religious fundamentalists, who themselves oppose most if not all government regulation.
What can do we do to stop or slow down passage of the AHCA? What is the American Health Care Act’s long-term political significance?
The American Health Care Act (AHCA), the Republicans’ long-awaited repeal and replacement of Obamacare, was announced with great fanfare on March 3 by House Speaker Ryan and Senate Majority Leader McConnell. The corporate media, with its customary lack of introspection, greeted it as a done deal and as if the Republicans had captured permanent control of the Federal Government. Neither could be further from the truth.
The bill, once submitted to the Congress, will be obliged to wend a torturous route, in and out of committees, first in the House then in the Senate, then onto the House and Senate floors for a final vote, and then to a joint reconciliation committee for both Houses to reach final agreement. Assuming it gets that far. Two things to note here:
1st — at least three bills are already in the House Energy & Commerce Committee — HR 1333, 1335 & 1336 — whose objective is to eliminate the managed care fiscal model in use in Medicaid for the past twenty five years and clear the path for the capitated model that will be utilized in the Medicaid block grant provision contained in the AHCA. If things go smoothly, Ryan will have his bill reported out of Committee within two months.
2nd – the Senate is another story. All regulatory measures, i.e., those in the ACA being removed and those in the AHCA being introduced, can and should be filibustered, assuming the Democrats have any fight in them. Since major provisions of the new bill will not go into effect until FY 2020 or sometime after October 1, 2019, time is a crucial variable here and we have to make it work for us. Hence the enormous importance of the mid-term Federal elections of 2018, more on which below.
Accordingly, the question I posed above about the political significance of the AHCA and the struggle to pass or oppose it is really a question about the capacity of the Federal government to govern. It’s a debate, actually the key dialectic, about our democracy – federal or centralized vs. State-centered and de-centralized, Hamilton vs. Jefferson. The political and social momentum is clearly on the Jeffersonian side, but with adverse consequences for ordinary Americans that the Master of Monticello never could have imagined. The Supreme Court decision that most recently set the stage for the challenge to mandates occurred in 2012, when the Court ruled that the ACA was constitutional but its mandates – for expanded Medicaid and State insurance exchanges – were not. Specifically, Justice Roberts, who wrote the majority opinion, ruled that the Federal Government might mandate but the States could choose whether to implement the mandated programs or not. In the case of expanded Medicaid, 19 states, all with Republican governors and legislatures, opted out. Further, and this was the damning blow, the Commerce clause of the Constitution, which governs interstate commerce, could not be used to justify the Federal government’s use of mandates.
In short, the Roberts Court decision curtailed the power of the government to require State adherence to legislation related to the Social Security Act, under whose articles the ACA was drafted, and should be understood as another in a long line of attacks on the constitutionality of the Social Security Act. The implications of this limit on Federal power are also applicable to the government’s regulatory powers in general. But that’s another story, part of Conservatives’ efforts since FDR died in 1945 to extinguish all evidence of the New Deal and to return the Government, with the notable exception of the Department of Defense, to pre-1930’s Depression size.
What to do in the moment? What we have been doing since November 9: protest; inundate elected legislators with post cards, phone calls, reminders to oppose the ACHA. Particular attention should be paid to Democrats in the Senate, urging them to stall via filibuster passage of the ACHA, and to our elected State legislators here in the North Country. What is Albany planning to do faced with budget deficits estimated to fall between $3-6 billion dollars, and the loss by millions of New Yorkers of health care coverage: as many as 2.2 million throughout the State, nearly one-half million in the Adirondacks?
In the near future, prepare for the 2018 Congressional and Senate elections. My suggestion is that, here in the North Country, we convene a political convention, draft a platform, i.e., a declaration of purpose and objectives, screen candidates for North Country elective offices, and endorse and commit to work for those who will commit to our platform. This in lieu of reflexively endorsing Democratic candidates, particularly for Congress, whose allegiance can be anticipated to be to themselves, to a morally bankrupt party and to those who bankroll their campaigns.
As my avatar, Joe Hill, would remind us – “Don’t mourn, organize.”
* * * * *
Part II – Brief Summary: I’ve appended to the end of this section links to two excellent summaries of the American Health Care Act (AHCA), and, courtesy of Fox News, to the complete bill itself. Which is why I’ve decided to forego writing a thorough summary myself.
There follows below a brief summary of the main provisions of the AHCA, with much of the basic information provided by Harvey Rosenthal, Executive Director of the NY Association of Psychosocial Rehabilitation Services, with commentary added by me.
- Tax Credits – Republicans would replace Obamacare subsidies with tax credits ranging from $2,000 to $4,000 to help individuals pay for private insurance coverage. The credits would begin phasing out for individuals who make more than $75,000 and for households with incomes of $150,000. They would disappear completely for individuals who earn more than $215,000, with a cap of $290,000 for joint tax filers.
Comment: How much insurance can anyone buy for $2-4,000 annually?
This change will adversely affect over 10 million Americans who purchased private insurance policies via their state ACA insurance marketplaces.
- Medicaid – The plan unveiled on March 4 would end the Medicaid expansion program in 2020, affecting over more than 10 million Americans. It would also freeze the pre-ACA Medicaid rolls (which now number about 60 million persons) and shift Medicaid from an open-ended federal matching payment utilizing managed care reimbursement to a per-capita payment contained in block grants to the individual states.
Comment: The capitated block grants will give to the States far less Medicaid money than they now receive. States will be faced with the choice of increasing eligibility requirements and cutting people from the rolls or decreasing benefits. This situation will worsen, because the capitated amounts will be reduced annually until Medicaid is reduced to a shell or disappears altogether.
- Hospitals – While the bill would reinstate, in 2020, the extra share payments for ER visits by uninsured individuals that were eliminated by the ACA, the planned cuts to Medicaid in the AHCA will lower hospitals’ revenues and force them to ramp up their charity care or non-reimbursable spending.
Comment – Hospitals will also be faced with Draconian choices, including reduction of services and layoffs.
- Tax Windfall for the One-Percenters – The ACHA repeals ACA-related taxes in 2020, including a 3.8 % tax on the one-percenters used to pay for ACA tax subsidies and a 0.9 % Medicare tax surcharge on wages above $250,000, resulting in a projected Medicare tax loss of $350 billion over the next ten years and a tax rebate, as per Forbes magazine, of $33,000 for each one-percenter in the country.
- Comment: So whose interests do the Republicans have at heart?
- Mandates & Penalties – The individual and employer mandates to purchase insurance remain but the penalties for violating them are repealed in 2020.
Comment – So are they still mandates?
- Cost-sharing – Cost sharing subsidies, which helped people pay for ACA copays and deductibles, are repealed in 2020.
- Coverage for children – The bill allows parents to keep their children on their insurance until they are 26.
- Coverage for abortion – No one can use tax credits to purchase a plan that offers abortion coverage.
- Planned Parenthood – The program, which is not ACA-mandated, will lose all access to Medicaid reimbursement as soon as the ACHA is enacted into law. The White House is rumored to have offered to allow Planned Parenthood to preserve its Federal funding if it stopped providing abortions, a deal that Planned Parenthood rejected.
- Comment – This provision is controversial and will be contested by Democrats and even some moderate Republicans, assuming the latter even exist.
- NYS impact: As already mentioned in Part I – a $3-6 billion hole in the State’s budget; loss of health care coverage for as many as 2 million New Yorkers, including 250-500,000 in the North Country.
For further information:
“The Battle Begins as House Republicans Release ACA Repeal Bill”,
Harris Meyer, Modern Healthcare, March 6, 2017
“GOP Unveils Obamacare Replacement Amid Sharp Party Divide:
House Republicans released a long-awaited plan, but key Senate Republicans are already balking.”
Rachael Bade, Paul Demko and Jennifer Haberkorn , POLITICO, March 7, 2017
In closing, remember Joe Hill – “Don’t mourn, organize.”
* * * * *