Driving ACA progress off cliff
Republicans are rushing to pass their cruel joke of a tax bill — legislation they claim will assist working families but in reality is an early Christmas present for corporations and the super-wealthy. Voting begins Tuesday.
It would be easy to devote an entire column to the vicious provisions of the bill, such as making corporate tax cuts permanent but relief for individuals only temporary, or running up well over a trillion dollars in debt to make the rich richer.
But the part that strikes me as most galling, and which has become almost an afterthought amid all the other damage the bill will do, is its incongruous and completely unnecessary repeal of the Affordable Care Act’s individual mandate.
That’s the aspect of Obamacare that basically makes the rest of the system work — and it does work, regardless of the lies conservative politicians tell to dupe followers into thinking the healthcare reform law is a “disaster” and a “catastrophe.”
A recent report from the Commonwealth Fund found that “the Affordable Care Act has put access to healthcare in reach for millions of Americans.” It said fewer people are putting off doctor visits or struggling with medical bills.
In California alone, the percentage of uninsured working-age adults has plunged to 10% from 24%, according to the report. Nationwide, the uninsured rate fell to a record low 8.8% last year.
After President Trump took office and cast uncertainty over insurance markets, the uninsured rate rose this year to a three-year high. Which means the only disaster for Obamacare has been Trump calling it a
disaster.
And now Republicans are all but ensuring failure of the law by eliminating the requirement that most people have health insurance. They say they’re protecting personal freedom, giving people the choice of whether or not to buy coverage.
All they’re really doing is showing they have no clue how insurance works.
“Premiums will certainly increase without an individual mandate,” said Erin Grinshteyn, an assistant professor of health policy at the University of San Francisco.
Every single healthcare expert I spoke with said the same thing: You need a mandate to get younger, healthier people into the risk pool, thus making coverage affordable for everyone.
“If only sick people enroll, the market falls apart,” said Dana Goldman, director of USC’s Schaeffer Center for Health Policy and Economics. “Imagine what would happen to homeowners’ insurance if only people in the canyons bought policies. The mandate is designed to make sure the market doesn’t fall part.”
This isn’t a question of ideology — it’s economics, pure and simple. Moreover, it’s ludicrous for anyone to say they don’t need health insurance because they don’t plan to use it.
Nobody plans to have a serious illness or accident. Insurance is all about being prepared for the unexpected.
That’s why you insure your car. It’s why you insure your home. It’s why you pay into Social Security.
“You may be healthy now, but later on you could get very sick and require costly treatment,” said Vivian Ho, director of the Center for Health and Biosciences at Rice University’s Baker Institute for Public Policy. “When that happens, it’s not OK to just shrug your shoulders and say, ‘Oh well,’ and expect taxpayers to pay the bill.”
Republican politicians, who have campaigned on repealing Obamacare or, if not that, getting rid of the mandate, seem comfortable displaying their economic ignorance.
“Wouldn’t it be great to repeal the very unfair and unpopular individual mandate in Obamacare and use those savings for further tax cuts,” Trump tweeted last month.
What he was referring to is a notion that without a mandate, millions of people would skip buying insurance, which means the government wouldn’t have to spend so much on Obamacare subsidies. That money, apparently, could be better spent cutting taxes for corporations and the rich.
The Congressional Budget Office estimates that about 13 million fewer people will be insured by 2027 after the mandate goes adios. In some cases, this will be because they don’t want insurance. In others, because they can’t afford it.
Average premiums will rise 10% as the risk pool grows sicker, the CBO says.
On the other hand, the drop in subsidies paid out will mean an extra $338 billion for tax cuts.
Michael French, a health economist at the University of Miami, called this coverage-for-tax-cuts trade-off “shortsighted and selfish.”
“Any serious health economist will tell you that the individual mandate was a good move for health insurance markets,” he said.
“Allowing people to wait until they become sick before they buy insurance just makes the market unsustainable. It means the only people covered are sick people, and that makes insurance too expensive.”
Some Republican lawmakers have proposed creating a “reinsurance” program that would make billions of dollars available to stabilize insurance rates. But such a system would be required on a perpetual basis, and conservatives so far are unwilling to appropriate more than a few years’ worth of funding.
So along with all the other problems with the tax bill, it manages to take genuine progress under the Affordable Care Act and drive it off a cliff.
Trump said last week he was looking forward to providing “a massive tax cut for the everyday, working Americans who are the backbone and heartbeat of our country.”
It’s probably just a coincidence he cited two body parts that, if anything goes wrong, will wipe you out financially.
David Lazarus’ column runs Tuesdays and Fridays. He also can be seen daily on KTLA-TV Channel 5 and followed on Twitter @Davidlaz. Send your tips or feedback to david.lazarus @latimes.com.