That’s Not Funny – That’s Sick

It’s funny, or at least it would be if it weren’t so sad and so dangerous. Lack of transparency in health care is a problem that has often been decried. You buy health insurance, but you don’t really know which providers are in-network. You go to the hospital, but you don’t really know what it will cost you and you can still be subject to surprise out-of-network bills even if you go to an in-network facility. These are problems with the health care system that the American people want to see Congress address. Instead, the Republican congressional leadership and President-elect Trump want to extend this lack of transparency into health care policy-making by pushing a “buy now, pay later” plan to repeal essential components of the Affordable Care Act, while replacing them sometime… later, maybe… with something still to be determined.


Selling a Pig in a Poke

Essentially, Republican leaders are tossing a lit stick of dynamite into the current health care system and asking people to trust that they will figure out a way to contain the blast damage before it explodes. In fact, they are promising that their plan will protect people with pre-existing conditions, provide everyone with access to affordable coverage, offer people better coverage at a better price than they have currently and make sure that no one is worse off than they are now.

But there is great reason for the American people to be skeptical that Republicans can deliver. First, they have been unable to coalesce around an ACA alternative for the past seven years and there are huge disagreements within the party over what (if anything) should replace the law. Second, there is little reason to expect that Democrats would collude in passing a plan that undoes the protections that the ACA provides.

No One Will Be Hurt… Until They Are.

But what about a plan that delivers on all of those promises? Don’t count on it. Speaker Ryan really only meant that people wouldn’t be made worse off during the transition period. But even this promise is one they are unlikely to be able to deliver on. Last week, the American Academy of Actuaries issued a letter warning that the “repeal and delay” strategy could destabilize the individual insurance market long before any replacement plan could be passed, let alone be implemented.


Surveying the Damage

So just how bad would it be? According to an analysis by the Urban Institute, repeal without replace would roughly double the number of people without health insurance. Hospitals would have to absorb more than a trillion dollars in increased uncompensated care costs over the next decade. It’s no wonder then that with a major surge in uncompensated care staring them in the face, hospitals are demanding that if Congress repeals the ACA’s coverage expansion they also repeal the spending cuts the hospitals supported to help finance the coverage expansion. Repeal would undermine much of the progress that has been made toward mental health parity and undermine national efforts to combat opioid addiction.

Follow the Money

While the “repeal without replace” strategy would be a disaster for many, including many voters who provided Trump’s margin of victory in the electoral college, not everyone would be a loser. The healthy and wealthy would be winners while pretty much everyone else would lose. For starters, the “repeal and delay” plan seems to be as much about tax policy as it is about health policy. House Republicans are proposing an immediate tax cut that would mainly benefit people whose household income exceeds $200,000 while at the same time voting to repeal a tax credit that mainly benefits people earning less than 250 percent of the federal poverty line (about $50,000 for a family of three).

Added to that, what we can discern about congressional Republicans’ thinking about a replacement indicates the same bias toward the wealthy. Republican plans seem to rely heavily on expanding the use of Health Savings Accounts (HSAs), but only those who have money to spare can afford to set money aside in HSAs. Therefore, the tax benefits of the accounts flow disproportionately to more affluent households.

Following the money can also tell us something important about whether congressional Republicans are even serious about trying to replace the ACA. The key question is what happens to the money that now pays for expanded Medicaid and tax credits on the marketplaces? Republicans may try to hold onto those funds so they have something to work with as they try to implement a replacement plan. Holding onto the money is no guarantee that “replace” will be any good (for example, funding could flow disproportionately to the wealthy, as appears likely under current replacement proposals) or even that there will be any replacement plan that can get through the House and Senate. But failure to hold onto the funds is pretty much proof of the lack of serious intent with respect to replace and a guarantee that most of the harmful consequences of repeal identified by the Urban Institute and others will come to pass.

Unless congressional Republicans can be persuaded to change course, we may find out sooner rather than later that all of the high-sounding promises of affordable coverage are nothing more than empty rhetoric.