American Health Care Act

American Health Care Act

On Monday, the CBO finally released its analysis of the American Health Care Act.  You can read the actual analysis at:  https://www.cbo.gov/sites/default/files/115th-congress-2017-2018/costestimate/americanhealthcareact_0.pdf

According to this analysis approximately 24 million people will lose health insurance under the Act.  This, on its face, looks really bad.  However, according to the analysis, most of these loses are because the individual mandate will be repealed.  People will no longer have to buy health insurance.  One of the biggest complaints with Obamacare will be gone.  Health Insurance will now be something people buy because they want to, not because they have to.  Big Government will be out of our lives, at least as far as health insurance is concerned.

President Trump stated during the campaign his goal is for all Americans to have health care.  He does not believe anyone should be turned away on the street because they have a medical problem.  He has thrown his full support behind the American Health Care Act.  However, this CBO analysis does not accomplish his campaign promise.  In fact, it seems to do just the opposite.

President TrumpSo, is President Trump reneging on his promise to the American people? On that question, we have to say, let’s wait and see.  We don’t know at this point.  Speaker Ryan and the Trump Administration have stated, this is only the first part of a three part plan to get rid of Obamacare once and for all.  According to Speaker Ryan, phase two will gut the regulations created under Obamacare.  Phase three will be more of the GOP plan to replace it.  (Phase one and Phase three cannot be part of the same bill because of budget reconciliation rules in the Senate).  Reconciliation was discussed in this column here.

The CBO’s Surprise

The big surprise in the CBO report is that the American Health Care Act will actually lower the budget deficit.  In fact, the exact figure is reported to be $337 billion dollars by 2026.  This is a complete shock.  All of the reports from the last few weeks were that the deficit would balloon under the act.  That is not the case, however.

Apparently, the savings in Medicaid are monumental.  Of course, Democrats will use this to show President Trump and the GOP don’t care about the poor.  It will be more of the same old, same old from them.  At this point, it is obvious, they don’t have an original argument in their bones.  The GOP loves the rich and hates the poor.  We’ve heard it ad infinitum for the past 50 years.  But, this time, it is simply not true.

Almost all of the savings will be from the increase in Medicaid under Obamacare.  Yes, more people will be off the roles.  That is true.  But, they will be people who weren’t on Medicaid roles before 2009.  If the American Health Care Act, when all three phases are fully implemented, succeeds in making Insurance cheaper, then the people cut from Medicaid will be able to get insurance at lower rates.  They will no longer be uninsured.  And, in the end, Medicaid will be in better financial health.

Thus far, I have not heard the response of the GOP to the CBO analysis.  The ultra-conservative wing will complain it is not enough.  The moderate wing are going to fear it will cost them their jobs.  However, President Trump must now use his famous negotiating skills to bring this all together and make it pass.  This is his big test.  Can he succeed?  Will the American Health Care Act become law and will Obamacare become a thing of the past?

 

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