Republicans released their Repeal & Replacement Plan. What’s being attacked and what’s missing that would make it work.

The Republican’s (Repubs) long awaited Repeal & Replacement (R&R) bill, The American Healthcare Act (AHCA, has been released. One did not need to be Carnac-the-Magnificent (for you Johnny Carson fans) to know how the press and the Democrats would respond. Heck, they were already predicting Armageddon and they had not seen anything except the stale talking points we all were tired of hearing. Hey, maybe they have a little Carnac in them, too.

Last week, as I said, I read the bill twice and no I’m not a lunatic. My first read was to look for certain highlights. The second read was with a notepad to write down and track amendments vs repeals and changes that made sense or not. I noted two pages single space worth of changes. My first summary was that the Repubs can’t really continue to include the word Repeal in their description of the bill. The second opinion was that it will be hard to fight for and defend.

Our politicians are so far apart that they often can’t see the good in something for fear it might not benefit themselves and this bill will not encourage too many Repubs to fall on their swords for it. That sounds pessimistic but don’t you know its true. So, let’s identify the talking points that are being used by the opposition press, pundits, and politicians after the release. We all know they have been working on their talking points just as carefully as the Repubs worked on the AHCA.
Then we’ll point out a few things in the bill that concern us and should be addressed.

First, we’ll look at the naysayer talking points:

  • 20 million Americans will lose their coverage.
  • People covered now will have their pre-existing conditions denied.
  • Millions may be forced into bankruptcy.
  • Mothers and babies will not get the care they need.
  • Women will be denied access to reproductive services.
  • Women will not be able to afford their birth control pills.
  • The poor will be left on the streets without care.
  • Insurance companies will gain huge profits as they deny claims.
  • Seniors will see their life’s savings stolen then pushed over a cliff. I don’t know how Seniors got into this discussion but trust me, they will be used.

Wow, that was a pretty easy list to create and took me about 15 seconds. You and I both know that the replacement plan offered by the Republicans will not harm anyone nor will it cause anyone to lose coverage. That does not seem to matter in the amped up political media we see today.

However, the AHCA released last week is missing or at least silent on a few big issues that may be deal breakers. Let’s review a couple:

  • It does not actually Repeal the ACA as stated in the first paragraph which reads clearly “We Amend”.
  • It does not repeal the Employer or Individual Mandates. It simply reduces the penalty to zero. This may be trickery because, unless corrected, that means a future congress, either Dem or Repub, could easily reinstate the penalties for either Individuals or Employers, or both.
  • As noted above, it does not technically repeal the mandate individuals so it needed some tool/teeth to encourage continuous coverage. It will allow insurers to surcharge an applicant’s premium 30% if there has been a gap in coverage greater than 63 days in the preceding 12 months. I assume this was to placate the insurers but it will do little to encourage coverage or reduce premiums.
    • That means our citizens will be able to put off paying for premium until they get a bad diagnosis then enroll. There will be situations in which we’ll see hospitals pay premiums for these late enrollees so that the member’s hospital claims can be paid by a health plan, just acquired.
  • It is silent on most of the “rating restrictions” that have artificially pushed up premiums such as the Minimum Loss Ratio.
  • It does modify the premium ratio for oldest vs. youngest from 3:1 to 5:1 but that is not enough. Remember pre-ACA that ratio was 7 or 8:1 which allowed insurers to rate appropriately. Rates for the young and old were not artificially increased to meet some uninformed bureaucratic limit.
  • The proponents of the AHCA rely too heavily on expanding HSAs. I’m all for HSAs but HSAs won’t work for a large share of our population for good reasons; and the Dems will use this to scare the uninformed and  everyone else.
  • It is silent on selling across state lines. This solution is now being scoffed at by both Repub and Dem which makes  me wonder if it will be in Phase III as Speaker Ryan promised.
  • It leaves the Medicaid expansion in place until January 1st, 2010. It also added a monthly redeemable tax credit which looks like a new entitlement. If promoted well this could be good strategy because we need to allow for the folks currently being subsidized and provide a phase out period as premium come down and coverage improves.
  • The last thing I’ll mention is that it allows for individuals to deduct a good portion, if not all, of their premium on their tax returns. Long over do.

Maybe the most frustrating discussion will center around “how will the Repubs pay for this plan”. It’s amazing that our Politicians struggle with letting the citizens keep at least some of their own hard earned money. That mentality implies that reductions in taxes or fees are impossible because of their attitude that you can’t reduce revenues unless you pay for them. Geez, why do citizens need to pay for retaining a larger portion of their own income?

Personally, I’m not looking forward to the pundits and their talking points. Just as the Republicans annoy us with their wailing call for HSAs so will the Democrats annoy us with horror stories of sickly mothers and starving babies, the likes of which Alfred Hitchcock would not believe.

I often  say that I’m an optimist trapped in a cynic’s body which is not good DNA for the conflict ahead of us. But, the optimist in me predicts that the Republicans are fully aware that they must produce results and that people can’t lose anything that they’ve already been given. So, let’s see how the Republicans respond to the flack headed their way.

Love your feedback so let me know.
And of course you know that we’re all in this together!

Mark Reynolds, RHU
(559) 250-2000

One Response to “Republicans released their Repeal & Replacement Plan. What’s being attacked and what’s missing that would make it work.”

  1. Mark Reynolds, RHU Says:

    Great insight.

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: