Are You Confused About the New Health Care Bill?

3/16/17

Let me help you understand what is going on!

I have been very confused, myself, about the health care bill, which Republicans are trying to pass through Congress and the Senate. But…after a lot of study, I think I have a pretty good handle on it; and I would like to share the understanding I have gleaned.

First, many of the features conservatives in Congress want in the bill cannot be included, because Senate rules prohibit inclusion of anything not directly related to money costs. Those changes are the ones that conservative Republicans want the most. One example is the present requirement of the Obamacare law, which requires old people to buy obstetrical services, a service they can never use. Another example is the absence in Obamacare of any mention of tort reform (Tort reform would prevent lawyers from charging exorbitant fees for handling malpractice suits.) Republicans propose to include those changes in upcoming bills to be presented in phase three of their proposed health care law changes.

The main features of the proposed law have to do with how health insurance will be financed. Republicans propose to help people pay for their insurance coverage by means of “tax credits,” paid to the purchaser based on his/her age and income status. The term, “tax credits” is an unfortunate term, because it has absolutely nothing to do with taxes. “Tax credits” are really subsidies paid to purchasers based on their age and income; they work just like welfare payment subsidies. The reason legislators like to call these payments “tax credits” is that the term is more acceptable to tax payers than “welfare subsidies.”  These subsidies are an acceptable way to lower the cost of health insurance.

One huge objection that Republicans have with the Obamacare law is that it allows people to wait until they are sick to buy insurance coverage. That feature has escalated the cost of health care insurance to an extreme degree. Insurance, by its very definition, must allow only people without a present illness to purchase coverage.

People buy insurance because they might get sick, not because they are sick. If sick people are allowed to buy “insurance,” the situation would be analogous to allowing auto drivers to buy car insurance after the accident occurs. This makes no sense; and it escalates the cost of insurance.

So, one may ask, what is to become of sick people without previous health care insurance who need medical care urgently? The answer is, States would receive $100 billion over 10 years through a new Patient and State Stability Fund for safety-net needs and possible “high-risk pools” for consumers with preexisting expensive medical conditions. These safety net funds will be administered by the states rather than the Federal Government. Supposedly, that feature of the new legislation will answer the question of how to finance these difficult cases.

The new Republican bill will eliminate the present penalty arrangement included in the Obamacare law that forces many people to buy insurance. Democrats and the Congressional Budget Office claim that many people will refuse to buy insurance if the penalty is eliminated; and that objection is entirely valid. Under this new law, many people will drop their health insurance coverage. Nevertheless, Republicans believe that people should have the option of what they want to buy. For instance, a young person in his/her 20’s who has very little likelihood of needing health insurance should be allowed to buy it if he/she wants it; and if it is not wanted, it should not be required. Of course, this change will eliminate a lot of money paid into health insurance companies that Democrats want to be shifted into the care of the elderly who have much more chronic disease needing medical treatment. The lack of insurance policies for the young will probably increase premiums for older people and even middle class people with families. This is a valid objection to the new law.

The Republican answer to the above objection is that the new law will eliminate the Obamacare mandates that people must buy insurance they don’t need. People will be allowed to buy only insurance they want and need; that will bring premiums down. As I mentioned above, Obamacare mandates that people who buy insurance under that law must pay for coverage they don’t need. Examples of those unnecessary coverages are for dental care for children when there are no children in the family, obstetrical care when the family is too old to need it, psychiatric care and drug abuse treatment that may not be necessary, and several other types of unnecessary coverage. 

Of course, the Democrats recognize that there are problems with Obamacare. But…their solution to those problems is to exercise more government control over personal choices for health insurance. Also, they will push for coerced insurance for all, and, as always, throw more money at the problems.

If the American Health Care Act fails, it will do so at the hands of conservative Republicans in the Freedom Caucus and others. I think that Republicans should quit looking for a perfect fix to the Obamacare law and accept the best that can be obtained in the present political environment. Continuing to push for perfection will never work!