The Republican plan to repeal and replace Obamacare looked like a disaster the moment it was introduced, but now that the Congressional Budget Office has released its study of the bill’s impact and its architects have had more time to attempt to defend it, I think it’s safe to say that passage of the American Health Care Act would have devastating consequences — especially in Appalachia.
The CBO estimates the bill would result in 24 million Americans losing health insurance. That means that not only would the Republican bill undo all the good achieved by the Affordable Care Act, it would actually make things worse than the unacceptable status quo that existed prior to Obamacare’s 2010 passage.
Though the White House has pushed back against the CBO score, its own analysis of the bill found it would do even more harm, kicking 26 million Americans off the insurance rolls by 2026.
The bill’s structure leads to an even more insidious effect: The elderly and poor, who need the most help affording health insurance, will lose the most from Obamacare’s repeal. According to the CBO, a 64-year-old earning $20,000 would see premiums jump from $1,700 a year to $14,600.
It’s hard not to notice something: The demographic of voters most likely to have gone for Donald Trump is the same demographic most hurt by Trumpcare. According to an analysis by the Los Angeles Times, 60-year-olds with annual incomes of $30,000 who live in rural areas where healthcare costs, and Obamacare subsidies, are higher, would lose more than $6,000 a year in federal subsidies.
States like Alaska, Arizona, Nebraska, Tennessee and Oklahoma that went solidly for Trump will be hit hardest by the Republican repeal plan because subsidies have helped make high premiums there affordable.
Guess what? West Virginia and other parts of central Appalachia are heavy on the demographics that will be most harmed by this bill. Simon Haeder, an assistant professor and health care policy expert at West Virginia University, says the Republican plan would be “particularly harmful for West Virginia,” and could cost the state more than $1 billion in federal funds and as many as 15,000 jobs.
Republicans have had seven years to come up with this replacement. How could they have failed so miserably? Judging from Paul Ryan’s defense of the bill, it’s because they simply don’t understand how insurance is supposed to work.
“The idea of Obamacare is … that the people who are healthy pay for the people who are sick,” Ryan said.
But that idea isn’t unique to Obamacare, it is the essential principle of how insurance works — and it’s why employer-provided health care plans tend to work better than the individual marketplace.
An insurance pool only works if it has a good mix of healthy people and sick people. The premiums from healthy people subsidize the cost of care of the sick people. That isn’t a bug; that’s how it’s supposed to work. Typically, the pool for employer-provided insurance has that good mix.
But on the individual market, the market for those not covered by employer plans, the mix can be far less than optimal, especially before Obamacare. Those who have to pay full freight for health coverage tended to need insurance more. They tended to have more chronic conditions. Their care was costlier.
The entire point of Obamacare was to solve that problem. First, it prevented insurance companies from denying coverage to people with pre-existing conditions, and it forced the industry to base premiums on costs by classes defined by age, location and other general factors, not on an individual’s current needs.
Then it mandated that everyone get coverage — and that employers of a particular size provide insurance.
Finally, to ensure that coverage was affordable, Obamacare provides subsidies based on income and location.
Obamacare is far from perfect, and there have been some bumps in the road. But the Affordable Care Act did solve problems with the American health care system, and extended coverage to millions of Americans.
Trumpcare, on the other hand, would make insurance unaffordable for millions of Americans who have been helped by Obamacare. It would slash spending on Medicaid by $880 billion over the next decade, leaving states and lower income Americans to make up the difference. The only beneficiaries would be the extremely wealthy Americans whose taxes were increased to help pay for Obamacare.
Trump says his “Plan B” is to simply let Obamacare fail and blame it on the Democrats. But according to that CBO report, Obamacare isn’t failing, it’s stabilizing.
In fact, it’s becoming clear that Obamacare, even without any fixes for its current problems, is far better policy than the bill Republicans are pushing. Keeping Obamacare as is would do far less damage than repealing and replacing it.
Radmacher is former editorial page editor of The Charleston Gazette and The Roanoke Times. This Land is a weekly column produced by Appalachian Mountain Advocates.