House Repeal & Replace Bill Contains Important Conservative Reforms

Texas Insider Report: WASHINGTON D.C.  The American Health Care Act is taking fire from all sides not the least from the circular firing squad conservatives have formed threatening passage of the only piece of repeal and replace legislation that House leaders say will be presented to members for a vote this year. President Trump has made it clear to Congress that he is determined to fulfill his campaign commitment on Obamacare and he fully supports the bill that now has cleared three committees in the House. The American Health Care Act (AHCA) in fact could be the most transformative entitlement reform in decades. It would:

• Begin to turn Medicaid into a program that would require states to be partners in managing spending to make sure the dollars cover as many services as possible and that those with the greatest need are getting the most helpthe complete opposite of the current Medicaid incentives. Under Obamacare states have a strong incentive to sign up able-bodied single adults for Medicaid while people who are much needier and with much lower incomes linger on waiting lists.
• Repeal $1 trillion in taxes that were primarily hitting middle-income Americans in the form of higher health coststaxes on health insurance medical devices prescription drugs etc.
• Zero out the fines for the individual mandate and employers mandate.
• Provide increased flexibility for people to open and use Health Savings Accounts to help pay routine bills and save for future healthcare needs.
• Provide $100 billion over 10 years for the states to begin to innovate in providing extra help for those at the lower-end of the income scale people with pre-existing conditions and help to stabilize the individual health insurance markets that are near collapse.
• And perhaps most importantly provide a safety net for people currently on Obamacare both those with private plans through exchanges and those on Medicaid through 2020 while the new marketplace for more affordable insurance develops.

The Congressional Budget Office lobbed a bombshell into the debate recently with its estimates of cost and coverage with the House AHCA bill. It said the bill would reduce federal deficits by $337 billion over the next 10 years including a $1.2 trillion tax cut to the American economy. But the problem was in the coverage estimates: CBO estimates that

in 2018 14 million more people would be uninsured under the legislation than under current law. Most of that increase would stem from repealing the penalties associated with the individual mandate."

The CBO has consistently overestimated the impact of the individual mandate and has done so again. By 2026 CBO says 24 million more people would be uninsured largely as a result of changes to the Medicaid program. But the CBOs estimate is a static analysis that is unable to reflect the dynamics of changes in the marketplace and human behavior. More people will be offered more choices of plans at more affordable prices under the AHCA but the CBO says if the coverage is not as comprehensive as the Ferrari-level coverage in Obamacare it doesnt count. That is not the way millions of Americans see it. Health & Human Services Secretary Tom Price released the following statement after the CBO report came out:

The CBO reports coverage numbers defy logic. They project that zeroing out the individual mandate allowing Americans to choose whether to have insurance will result in 14 million Americans opting out of coverage in one year. For there to be the reductions in coverage they project in just the first year they assume five million Americans on Medicaid will drop off of health insurance for which they pay very little and another nine million will stop participating in the individual and employer markets. These types of assumptions do not translate to the real world and they do not accurately estimate the effects of this bill.

The White House and Congress are huddling now to see whether changes need to be made to the House bill before it goes to the floor for a vote likely next week. Whatever bill is presented to them to repeal and replace Obamacare Republican critics are caught in a dilemma: Vote yes on passage and face constituents who are angry that repeal" doesnt go far enough and that replace" goes too far. Vote no and face voters angry that they didnt fulfill their promise to repeal the law. And many experts are concerned that leaving in place the bills regulatory provisions will lead to further distortions in the health sector as The American Conservatives managing editor Robert VerBruggen wrote soon after the House repeal and replace legislation was unveiled. More than 15 months of work has gone into shaping this health reform package in the House and Ryan believes this is the best answer to appease the warring factions in his caucus while still trying to thread the needle of the process through which the bill must pass the Senate. Because Republicans control only 52 seats in the Senate Democrats can filibuster any bill that comes before the body in normal order. Instead the bill is moving through the budget reconciliation process that allows passage with only 51 votes as long as its provisions directly impact the federal budget taxes and spending. That is why the regulations in the Affordable Care Act cant be repealed wholesale things like guaranteed issue" the requirement that health insurers must sell insurance to anyone who wants to buy a policy even if they wait until they are sick to sign up. Even though this and other regulatory provisions like dictating what must be covered in a policy do increase costs they are not expected to pass parliamentary muster in the Senate because regulations are not a direct budgetary issue. As President Trump said Nobody knew that health care could be so complicated!" And the House bill is only about 100 pages long a fraction the size of the 2000-plus page ACA. House leaders have worked closely with governors and state legislators in crafting the plan. Governors believe they can deliver on expanded coverage despite the static projections of the CBO. There may be a chance to amend the bill when it hits the Senate floor likely the third week in March but that will mean a round-trip to the House to approve the amended bill a risky endeavor. Speaker Ryan is assuring angry conservatives that many other targeted bills such as allowing cross-state purchase of health insurance and medical liability reform will move separately. Plus Health Secretary Tom Price says he will use his regulatory authority to write rules that will be friendly to consumer choice competition and innovation. President Trump is all-in to help get the House bill over the finish line over to the Senate and onto his desk to deliver on what he considers his top campaign promise. Any replace strategy is risky. But voting against repeal" could be the death knell for Republicans in 2018. Grace-Marie Turner is president of the Galen Institute a non-profit research organization focusing on patient-centered health reform and publisher of ObamaCareWatch.org