Republicans unveil a nonsensical healthcare reform bill to replace Obamacare

 
Rachel Cunliffe
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23m Americans could end up uninsured (Source: Getty)

Nobody knew that healthcare could be so complicated,” Donald Trump declared, 38 days into his presidency.

His party has been having similar difficulties.

After seven years of vocally opposing Obama’s Affordable Care Act (ACA), Republicans found at the start of this Congress that designing a replacement that slashes taxes while keeping the current system’s most popular features (such as ensuring affordable coverage for people with pre-existing conditions) is harder than it looks.

Read more: Donald Trump suffers major defeat as healthcare

The first effort to get a repeal and replace bill through the House in March failed spectacularly, panned by Republican hardliners and moderates alike. The second attempt scraped through in May, and since then the challenge has been to design something Senate Republicans – with a majority of just four – will endorse.

This healthcare bill, unveiled yesterday, has been written under the cover of secrecy. It was hidden even from the Republican Senators who are expected to vote for it. And it has yet to be evaluated by the non-partisan Congressional Budget Office, which will determine how much it will cost and how many Americans it will leave uninsured.

Balancing act

Republicans have an impossible balancing act on their hands. By deciding to try to ram the law through with a simple majority, they are committing to designing a bill that costs less than the one it replaces. But the whole point of the repeal is to reduce the taxes on wealthy Americans that paid for ACA subsidies (by around $1 trillion), which means the only solution is to dramatically reduce the amount of spending on healthcare.

This might be appealing to economic liberals, but the majority of Americans are not impressed by the government slashing healthcare spending – especially when the congressmen making the call have their own generous medical plans, paid for by taxpayers. The latest polls have not been favourable.

The version of the Senate bill that has finally been revealed is a mess. It mirrors the House bill in cutting the budget for Medicaid expansion and reducing subsidies for low income Americans buying insurance, effectively pricing them out of the market. Crucially, it also scraps the mandate both for individuals and employers, meaning individuals are no longer fined for not having insurance, and large employers are not penalised for failing to offer it.

Increasing the number of uninsured

Together, these provisions will dramatically reduce the number of insured Americans. While the secrecy has meant that no figures have been published yet, the House version of the bill on which this one is based was estimated to leave an additional 23m people uninsured. That’s more than gained insurance under the ACA, meaning the healthcare landscape would be worse than it was pre-2010.

The type of people who feel they can forego health insurance are relatively young and healthy. Older, unwell people are less likely to take that chance, so this reduced pool of insured Americans will be by definition high risk, and therefore more expensive to treat.

The ACA was able to ensure that insurance companies covered individuals with pre-existing conditions by injecting healthy, low risk people into the market to compensate. It is difficult to see how the Republicans’ alternative can do away with the mandates that made that possible and still keep the provisions protecting people with health conditions.

Secrecy and speed

Of course, that’s a simplified analysis, and there are those who make the case that freeing the healthcare industry from the regulations of the ACA will bring costs down for everyone. One Republican representative has argued that people should have the “liberty” not to be insured if they don’t want to be. But it’s an exceedingly complex issue, and one that requires some serious number crunching.

Unfortunately, Senate majority leader Mitch McConnell has pledged to get the bill passed before Congress goes into recess on 4 July. That leaves just a week to examine, debate, amend and vote on the bill, with no time at all for town hall meetings or consultations with constituents.

If the Senate does stick to McConnell’s timetable, they’ll be voting blind on an issue that affects every single American, with a hastily cobbled-together bill that defies economic sense. Healthcare may be complicated, but the politics of this move is dead simple.

Read more: Donald Trump proposes $3.6 trillion of health spending cuts in US budget bill fails

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