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Why Trumpcare Will Only Make the Rich Richer

  • Jefferson23 (6989 posts)
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    Why Trumpcare Will Only Make the Rich Richer

    By Adam Gaffney, M.D.
    Fortune, March 9, 2017

    House Republicans this week unveiled their long-awaited bill replacing the Affordable Care Act, also known as Obamacare. Blandly titled the American Health Care Act—or as many have already taken to calling it, Trumpcare—the House GOP bill is effectively a concession that the right lacks a workable health care vision of its own: The program they offer would retain the fundamental structure of Obamacare, albeit with an ugly and regressive twist. While it would dramatically fail to achieve President Donald Trump’s stated goal of “insurance for everybody,” it would be strikingly successful in redistributing wealth to make the rich even richer.

    Among Obamacare’s numerous provisions, the most well-known (and beneficial) were those that expanded coverage. Between the Medicaid expansion and subsidization of the private insurance industry (together with various insurance regulations and mandates), the law effectively reduced the number of uninsured by an estimated 20 million (albeit still leaving some 29 million uninsured as of 2015).

    Trumpcare would take us in precisely in the opposite direction. For the private insurance market, the GOP plan follows Obamacare in subsidizing the purchase of health insurance plans for those who are otherwise uninsured. However, while Obamacare provides income-based premium subsidies that are tied to the price of the plan (such that those with lower income receive bigger subsidies), Trumpcare would provide flat subsidies—which it calls refundable tax credits—to all but high-income earners. Older recipients would receive twice the subsidies of younger recipients, but the subsidy otherwise wouldn’t be tied to the actual price of the plan, making insurance unaffordable for many.

    Moreover, the GOP plan would also eliminate Obamacare’s cost-sharing subsidies that lower out-of-pocket medical costs for millions, leaving even more people with insurance that they can’t afford to use and worsening the epidemic of underinsurance. And whereas under Obamacare, the government penalizes you for being uninsured, under Trumpcare the penalty would instead be inflicted by insurers: Those who fail to maintain continuous coverage would have their premiums jacked up by 30%.

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