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Fix Health Care - Then Cut Taxes

by David Teitelbaum (Principles: It all begins with Respect. ) - 9 month ago

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Republicans have ideas worth discussing for replacing the Affordable Care Act - but not until they drop their demand that taxes be cut for the wealthiest Americans.

The various Republican plans that have been proposed to “repeal and replace” the Affordable Care Act contain ideas worth discussing and debating. Questions like:

1) Should young people who buy insurance be required to subsidize older people? Under the ACA, premiums for young people can be no less than one-third of what an older person pays despite the fact that the true cost of insurance for young people is much less than that. The Republican plan addresses this imbalance by allowing premiums for young people to go as low as 20% of what an older person pays.

2) What is the best way to encourage healthy people to buy insurance? The ACA charges a tax for each year that a person does not buy insurance. The Republican plans focus on personal responsibility and focus on individuals who drop coverage and want to be covered again. The House plan allows insurance companies to charge 33% more in premiums. The Senate plan has a 6 month waiting period before a person can re-obtain coverage. The ACA tax is called a “mandate” but in reality, the concept for all of these ideas is the same. Healthy people must be given an incentive to get insurance or else they will wait until they are sick.  

3) How much control should the Federal government have over what insurance policies must cover? Policies under the ACA are expensive because they are required to cover a wide range of needs. Republicans want to reduce costs by allowing states to give insurance companies the right to tailor policies to the individual needs of the consumer.

4) Should Medicaid recipients who are capable of working be required to look for work? Republicans believe that current rules frequently encourage Medicaid recipients to either remain unemployed – or work illegally off the books.

These are all serious questions which we, as a country, need to seriously debate. Which brings us to the unavoidable question of why the Republicans in Congress are doing everything in their power to steamroll a health care bill through Congress WITHOUT having a serious debate? First the House passes a bill without even giving the Congressional Budget Office (CBO) a chance to calculate the impact of the bill. Then, Senate Republican leaders meet secretly for weeks, unveil a bill on June 22 and demand that the full Senate vote on the bill by June 30. Further indicating the Republicans lack of seriousness is the fact that this Congress has yet to hold a single hearing on the topic of health care.   

Sadly, the explanation has nothing to do with health care and everything to do with using massive cuts in Medicaid to pay for tax reductions for the wealthiest Americans. The ACA contained several tax increases, all of which the Republicans want to repeal. The CBO estimates the total value of those increases to be $540 billion over 10 years. Some of those increases, such as taxes on medical devices are controversial in that they have the effect of increasing medical costs. However, according to the CBO, approximately $230 billion of these tax cuts apply solely to individuals earning in excess of $200,000 per year. From a political standpoint, Republicans see a value in cutting these taxes because it will make it easier for a future tax reform bill to be "revenue neutral." However from a health care standpoint, the repeal of these taxes makes no sense at all.    

Most of the problems with the Republican bill, in fact, can be traced to the forced reduction in spending necessitated by the tax cuts. Republicans claim that the states can run “high risk pools” to cover expenses for the uninsured, including the 22 million additional people who are projected to be uninsured. Maybe they are right although past experience with high risk pools has generally been negative. However, add $230 billion (or better yer $540 billion) for Medicaid, subsidies and funding of high risk pools, and suddenly, the Republicans have a plan worth discussing.

I look forward to having that discussion.  However, that discussion cannot begin until the Republicans drop the precondition that the $230  billion be removed from a Health Care system that is already overstressed. Let’s fix health care first, then cut taxes.  

Comments and Responses (1)

Reasoning used for ARGUMENTS presented
By  Hickory Jackson - 9 month ago
I disagree with your claim that "Most of the problems" in the Republican bill can be traced to the reduction in tax revenue. Actually, all of the problems in the Republican bill can be traced to the fact that it is not a complete repeal of Obamacare. If you artificially create extra costs in the system , as the ACA did, then, yes, you need to find money to pay for those extra costs. If the ACA were to be repealed IN ITS ENTIRETY, the marketplace would be free to develop the policies that people need and both our health care system and our economy would be back on a better track.
Discussion Leader's Response : This comment is interesting but not directly relevant. (It might be a good topic for a new discussion)
Discussion Leader's Explanation : I guess it all depends upon how you define the word "problems." A complete repeal of the ACA would immediately return us to the situation where 50 million Americans would not have health insurance. I consider that to be a problem. Your "free market" idea sounds nice but in practice, it didn't work before and I don't see any reason why it will work now. Repeal the ACA and the uninsured will simply start turning up again at emergency rooms. The minute we accept the idea that people with pre-existing conditions should have access to health insurance, we create a situation where additional funding is needed. Thus, the Republicans face a choice. Pass a health care bill or pass a tax cut. They can't do both.