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Obamacare replacement bill's burden on poor brings out critics on all sides

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The effects of the long-promised measure to roll back Barack Obama's signature 2010 legislation would fall mainly on the poor, a fact that has set off opposition from both left and the right.

[WASHINGTON] Avik Roy says the Republican Obamacare replacement bill would make health insurance unaffordable for the poor. Robert Laszewski calls it a "mind-boggling" approach that could collapse the individual market. Seth Chandler warns it could put care out of reach for older Americans.

And that's just wonks on the right.

The effects of the long-promised measure to roll back Barack Obama's signature 2010 legislation would fall mainly on the poor, a fact that has set off opposition from both left and the right.

The bill would cut taxes to the tune of about US$575 billion over a decade, mainly on the wealthy and health-insurance companies. It would limit money channeled to low-income people, raise costs for older Americans and wind down the expansion of Medicaid.

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"There's no question the goal is to substantially reduce the federal commitment to providing subsidised care for the low-income population," said Len Nichols, a health policy professor at George Mason University.

"The very population that voted for Trump, the working class out there who are in the positions of not having good employer-sponsored coverage anymore or ever, they're going to end up worse off."

Obamacare provided insurance to about 20 million people, bringing the US uninsured rate to a record low. The law provided subsidies to help low- and middle-income people afford health insurance, and also pushed states to expand their Medicaid programs to more low-income people.

The bill will be debated Wednesday in two House of Representatives committees, before making its way to the floor. Republicans then would have to navigate the Senate, where they hold a 52-48 majority.

Most proposed changes in the bill, backed by House Speaker Paul Ryan, wouldn't go into effect until the start of 2020. About 2 million to 4 million people would lose coverage in the individual market starting that year, while another 4 million to 6 million would lose their Medicaid coverage, S&P Global Ratings estimated Tuesday.

There could be higher premiums or weaker coverage for many, particularly the elderly and those with lower incomes. At the same time, there would be less incentive for healthy people to buy insurance.

"It appears the real objective is a tax cut for the wealthiest Americans, and they're trying to do this on the backs of the most vulnerable," said Jim Carnes, policy director at Alabama Arise, advocates for low-income people in the state.

The drafters of the bill wrote provisions directly aimed at certain forms of income.

Executive Pay Raise

On one hand, the measure makes it easier for health insurers to pay executives more. The proposal would lift the guaranteed deduction on compensation to US$1 million from US$500,000 and also lets insurers deduct any pay linked to performance.

On the other, it would ensure that winners of lotteries, disproportionately played by the poor, wouldn't get a free ride based on a change in Medicaid formulas to cut them off.

"This is a classic example of Robin Hood in reverse," said Ron Pollack, founding executive director of Families USA, an advocate for affordable health care.

"It hurts the low income, children, seniors and people with disabilities who depend on the safety net Medicaid programme for their lifeline. It also hurts those people who need additional subsidies in order to afford their premium costs."

Cancer patients could also lose access to care or would be "left to buy coverage that doesn't meet their needs," Chris Hansen, president of the American Cancer Society's Cancer Action Network, said in a statement.

Mr Laszewski, a health-industry consultant, said the plan doesn't "meet either consumer or market needs."

 "If they pass this, it's hard to see how they keep the Congress," he said.

Runaway Revenue

The proposal would repeal two taxes on the rich, costing US$274.9 billion over 10 years, according to the nonpartisan Joint Committee on Taxation.

Taxes that Obamacare charged the pharmaceutical, health insurance and medical device industries would also be repealed at a cost of US$189.1 billion over a decade.

"If they had not done all this stuff to cut taxes, then I think the bill is much more defensible - you can say the nation can't afford the degree of subsidies created by the ACA," said Chandler, a visiting scholar at George Mason University's Mercatus Center, which researches market-oriented policy.

"Once we say that we're not actually saving the federal government money as a result of this bill, it's just hard to defend picking on older people."

Medicaid Cuts

The Congressional Budget Office hasn't yet released an analysis of how much the tax credits in the Republicans proposal might cost or how many people it would cover. Those CBO estimates won't be available until Monday, according to the office of House Democratic leader Nancy Pelosi.

The left-leaning Center on Budget and Policy Priorities estimates that the new plan would cut federal Medicaid spending by US$370 billion over the next decade as its expansion is removed.

"Phasing out Medicaid coverage without a viable alternative is counterproductive and unnecessarily puts at risk our ability to treat the drug addicted, mentally ill, and working poor," Ohio Governor John Kasich, a Republican, tweeted Tuesday.

J Mario Molina, chief executive officer of Molina Healthcare Inc, estimated that after 2020, some 20 million people would ultimately lose their insurance. In the short-term, insurers will jack up their premiums as they face an uncertain market without an individual mandate.

"This doesn't sound like what Donald Trump was talking about when he said he wants people to keep their coverage," said Mr Molina, whose Long Beach, California, company specialises in insuring the poor.

"A lot of the people who gained coverage under the ACA are going to lose it."

Mr Roy, who's advised Republican presidential campaigns on health policy, criticised the plan for putting health insurance out of reach for the poor in a Forbes article Tuesday.

"Expanding subsidies for high earners, and cutting health coverage off from the working poor: it sounds like a left-wing caricature of mustache-twirling, top-hatted Republican fat cats," Mr Roy wrote.

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