American Health Care Act Leaves Many Uninsured

Repealing and replacing the Affordable Care Act healthcare insur

It is sad to say but, if you wanted to draft a bill that caused as many Americans as possible to lose their health care coverage, you would be hard pressed to find a better candidate than the American Health Care Act, a bill recently passed out of two U.S. House of Representatives committees.  Thankfully it has not been enacted yet.  A bipartisan Congressional Budget Committee report is due and is expected to indicate the impact.

Regardless of complaints both from the right and from the left, House Speaker Ryan indicates that this bill is the best chance to rescind the Affordable Care Act and he therefore discourages attempts at voting the bill down or proposing amendments.  One suspects that, after seven years of opponents’calls to eliminate Obamacare, the feeling is that something, anything should be passed to show that it can be done.  On the other hand this is a heavy price to pay to make a point. Medical experts also suggest to fight off diabetes the natural way.

If the justification for the AHC (now sometimes dubbed “Trumpcare” or “DonaldCare”)  is that the Affordable Care Act is in a “death spiral,” an expression used by Mr. Ryan to indicate that it is on its way to collapse, then the proposed legislation should be expected to safeguard against this.  Right?  Actually, the reasoned answer is “no.”  The bill would insure fewer people at higher cost, still be expensive for the government and leave the most vulnerable uninsured.

Here are a few reasons why.

  1. With the mandate to purchase health insurance gone, fewer healthy people can be expected to buy health insurance coverage and the fund for payments from insurers will be reduced. The elimination of the mandate to purchase health insurance was regarded as one of the main reasons for repeal, even if the insurance covered smas facelift.  The reasoning here is that this is a free country and who is the government to tell people to go out and buy insurance even where it is private insurance.  In fact, in another of Speaker Ryan’s presentations, he explained that the problem with the ACA is that people who are healthy would be required to buy insurance that benefits people who are sick.  Actually, this is the idea behind insurance itself.  People who own houses that have not been damaged by fire buy homeowner’s insurance that benefits others whose homes have been destroyed.  This is with the expectation that someday the individuals who did not suffer the casualty loss might suffer a loss and they would also be compensated. Insurance provides a pool of money that can be accessed to pay when there is a loss. The greatest cost would be to suffer the loss and have no insurance to pay for it.
  2. Tax credits would replace subsidies under the health care exchanges. Ironically, opposition to tax credits in the bill by many conservatives was finally a recognition that previously unrecognized tax benefits and payments under government programs do the same thing.  They can increase the national debt.  The tax credit provision is in the bill to make it more palatable for people who would suddenly lose their subsidies for health insurance under the    However, for people who pay little taxes because their income is low, the provision does not help to encourage them to take out individual health insurance.  In fact, the bill penalizes those who try to reestablish health insurance..
  3. The bill would penalize those who try to reestablish health insurance coverage. Under the proposed bill, you would be fined 30% of the premium additionally if you lost insurance coverage and tried to reestablish coverage.  In fairness this is the kind of penalty that already applies to reestablishing coverage under Medicare B and D but has not been applied to regular non-Medicare insurance.  So, if you lose your job and your COBRA from your old employer runs out or you could not afford the premiums or you find a new job with an employer who does not provide insurance, it would cost you 30% more to get health insurance later, a clear disincentive.  Employers, unless obligated by a state law, would not under the new law be required to provide insurance regardless of the employer’s size.

This review does not begin to cover loss of insurance from Medicaid expansion or age rating that would substantially increase the cost of insurance for older adults before age 65.  Stay tuned for more.

About the Author Janet Colliton

Esquire, Colliton Law Associates, P.C. Janet Colliton has practiced law for over 38 years, 37 of them in Chester County, Pennsylvania, a suburb of Philadelphia. Her practice, Colliton Law Associates, PC, is limited to elder law, Medicaid, including advice, applications and appeals, and other benefits planning including Veterans benefits, life care and special needs planning, guardianships, retirement, and estate planning and administration.

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