The AHCA: Bad policy writ large

If you had to craft a bill that would be worse for more poor, vulnerable people you would be hard pressed to come up with something to “compete” with the GOP’s American Health Care Act (or Trumpcare or whatever you want to call it).

The Kaiser Foundation explains that “the tax credits under the ACA are higher for people with lower incomes than for people with higher incomes, and no credit is provided for individuals with incomes over 400% of poverty. The current replacement proposal, in contrast, is flat for incomes up to $75,000 for an individual and $150,000 for a married couple, and so would provide relatively more assistance to people with upper-middle incomes.” Before even getting to Medicaid cuts the law would transfer benefits from the working poor to urban elites (Hillary Clinton voters!). That’s because “the ACA tax credits are relatively higher in areas with higher premiums (like many rural areas), while the replacement proposal credits do not vary by location. If premiums grow more rapidly than inflation over time (which they generally have), the replacement proposal tax credits will grow more slowly than those provided under the ACA.” In other words, poorer, older, rural residents who voted for Trump get kicked in the teeth. (“Generally, the ACA has higher tax credit amounts than the replacement plan for lower-income people - especially for those who are older and live in higher-cost areas - and lower credits for those with higher incomes.”)

In real terms the hit to many ACA recipients is huge. “Under the ACA in 2020, we project that a typical 40-year-old making $20,000 per year would be eligible for $4,143 in premium tax credits (not including the additional cost-sharing subsidies to lower his or her deductibles and copayments), while under the American Health Care Act, this person would be eligible $3,000 . . . . A $3,000 tax credit for this same individual under the American Health Care Act would represent 59% of the average 40-year-old benchmark silver premium under the ACA.” The bottom line: “The average estimated tax credit received by ACA marketplace enrollees in 2017 is $3,617 on an annual basis, and that this amount will rise to $4,615 by 2020 based on projected growth rates from the Congressional Budget Office. This includes the 81% who receive premium subsidies as well as the 19% who do not.

“We estimate - based on the age distribution of marketplace enrollees - that current enrollees would receive an average tax credit under the American Health Care Act of $2,957 in 2020, or 36% less than under the ACA . . . . While many people would receive lower tax credits under the Affordable Health Care Act, some would receive more assistance, notably the 19% of current marketplace enrollees who do not qualify for ACA subsidies.”

When Republicans say this isn’t about coverage but about access to affordable healthcare they are wrong in two ways. First, unless you walk into an emergency room, access almost always requires insurance. Second, while the premiums may be smaller for about 20 percent, that leaves the vast majority paying more. That does not amount to lowering costs for people, although the less generous benefits make it cheaper for government.

This is bad politics — more people will be mad, and more Republican voters will be mad — but at bottom it is just bad policy. We should be spending money, when we spend it, on the weakest, the poorest and the most vulnerable. The GOP determination to do the opposite and then to lard on big tax cuts for the rich makes for terrible policy and fundamentally cannot be justified in moral terms.