*GOP Kentucky Senator Rand Paul airily dismissed the prevailing notion that the GOP doesn’t have any plan to replace the Affordable Care Act, Obamacare, as simply untrue. There are many plans floating around, he claims, that have been put on the table to replace the law after it is repealed. He’s right. There are a lot of proposals that have been floated to replace after repeal and all of them are equally dreadful.
Here in a nutshell is what the GOP has tossed out as a replacement: scaled down subsidies, tax credits, the expansion of high risk pools, health savings accounts, give insurers the right to peddle insurance in any state they choose, and create Association Health Plans to small businesses and risk pools. The subsidies would scrap the income based measure that Obamacare imposes and substitute instead age as the basis for the subsidy. The subsidy to the poorest and neediest was the linchpin of Obamacare. This made it possible for millions who couldn’t afford insurance at any price to purchase it for the first time. To get the tax credits a low wage worker would still have to come up with the cash to purchase insurance. For many that would be problematic.
The high-risk pools supposedly would plop thousands of medically indigent persons in pools to insure low cost, access to coverage. It would do just the opposite. The bulk of those in the pool would be the sickest and most in need of continuous medical treatment. They would pay more not less for that coverage. To cover the high cost of maintaining these pools, states would have to pony up more tax dollars or impose premium assessments on insurers who in turn would simply hike their prices to cover the assessments. It would be a never-ending cost increase cycle with absolutely no guarantee that the sickest and neediest in the pool would get the coverage they need.
The Health Savings Accounts, as with tax credits, would be a bonanza for the rich and high income persons, but would do nothing for low income persons. They would still have to pay for the high deductibles needed to get insurance at anything that faintly resembles affordable cost. They’d still have to come up with thousands of dollars to salt away in the accounts to pay for the deductibles and to get the tax write offs.
Insurers have long sold insurance wherever they please. However, they had to comply with tough state regulations and consumer protection requirements in some states. Now insurers would simply market their product in states that have the weakest controls and consumer protection standards. There they could charge whatever they want without any pesky interference from state regulators. Even better, they no longer need worry about getting penalized for denying coverage to someone with a pre-existing condition or someone whose treatment would cost tons of money.
This right to pick and choose who an insurer can cover or not is forbidden under Obamacare. However, no Obamacare, no requirement to cover all, means untold thousands are out in the health coverage cold again. The Association Health Plans has a catchy and even impressive ring to it. The gaping flaw, though, in the plans is with no tight consumer protection controls in place, insurers in the plan could pick and choose the healthiest ones to provide affordable coverage to while making coverage so expensive for the sickest that it would be prohibitive for them. This would create a two-tier system of health care with the sickest and neediest again out in the cold.
No Obamacare, also means no mandates requiring everyone to have health coverage. The mandate requirement drove the GOP to fits railing that it was a gross violation of individual freedom, and had to go. However, the mandate, along with the fed subsidies, and the scrap of pre-exiting denials, was the engine that drove Obamacare. This insured that Americans across the board had to have health coverage. The young, old, the healthy and unhealthy made up the broadest pool for health coverage, and this kept overall costs from skyrocketing. Now with the mandate dumped, insurers have free rein to charge what they want, insure who they want, with costs of that coverage continuing to climb.
Three years before Obamacare became law, a staggering 90 million Americans either had no insurance or went without coverage for a period of time during the course of a year or years. Many of them that got coverage also lost that coverage, almost always because they couldn’t pay for it, or the insurer dropped them because of a medical condition that the insurer considered too costly to pay for. The state of American health care was worse than abysmal for millions. This was the point of Obamacare, and why it attained the success it did.
Yet, Paul and the GOP claim that its replacement plan will do much better than that. The dreadful truth is it will do far far worse.
Earl Ofari Hutchinson is an author and political analyst. He is the author of the forthcoming The Obama Legacy (Middle Passage Press) He is an associate editor of New America Media. He is a weekly co-host of the Al Sharpton Show on Radio One. He is the host of the weekly Hutchinson Report on KPFK 90.7 FM Los Angeles and the Pacifica Network.
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