Recently Donald Trump and the House Republicans released their new plan for healthcare in America which involves repealing and replacing the Affordable Care Act. When the bill, “The American Healthcare Act,” was originally announced many people, including Republicans, said that it would not have a chance of passing. After it was announced the American Medical Association, the American Hospital Association and the AARP all came out against it. Though it gained a lot of criticism on both sides, there is the chance that it does pass. Because of this I will go through it and explain some of the implications of the bill.
One of the major changes, which was also expected is that it gets rid of Obamacare’s insurance tax credits which are based on many factors such as income and replaces it with a flat tax based on age. The annual tax credit would be that someone under 30 years old would get $2,000 and someone over the age of 60 would get $4,000. At first glance that makes sense considering the older you get the more likely you are to require medical attention. But when compared to Obamacare, you can see the major change being made. For example, if you were a 60 year-old living in Oklahoma who makes $50,000 a year ,under the Affordable Care Act you would be given $13,350 in tax credits. Under the American Healthcare Act you would only receive $4,000. This is over two thirds less than the Affordable Care Act. Flat rates like this overwhelmingly hurt low income families.
Another major aspect of this bill is the damage that it does to Medicaid which is in place to help people who otherwise would not be insured, get coverage. The American Healthcare Act would cut around 370 billion dollars in federal funding of Medicaid over the next 10 years. The plan pushes those bills onto state governments when states like Pennsylvania already have trouble balancing their budget. This would cause millions of low-income Americans to effectively lose their healthcare coverage. When you take both the tax credit and Medicaid cuts into account, it is estimated that between 6-15 million Americans will lose coverage.
This is obviously very troubling for many Americans. Worth noting is that one of the voter bases that will be effected the most is Trump’s own supporters. Those that would receive $5000+ less in tax credits under the new plan voted for President Trump by a margin of 59 to 36 percent. Of the 39 states that use the federal Affordable Care Act marketplace, the 10 states whose residents would lose the most financial aid happened to also give all their electoral votes to Trump. This is very troubling and you would think would cause many to change their minds about how they should have supported but many people have no clue what is occurring and a recent poll found that only 3% of Trump voters regret their vote. I would be interested to see how much this changes if the new proposal were to be implemented.
With all the negative consequences of this bill I think it is worth noting who exactly would benefit. Those within the top 1% in regards to income level will see a tax cut of around $33,000 and those within the top 0.1% would see a tax cut of around $197,000.
Just let that sink in.
This bill would overwhelmingly hurt older Americans as well as millions of low-income Americans. It has not passed yet due to the holding out of about 3 dozen conservatives who comprise the House Freedom Caucus. The freedom caucus is holding out but not because of the millions Americans that would be harmed by this but instead because they don’t believe that it goes far enough. They believe that the new plan does not cut premiums enough. The House Freedom Caucus would like to see what the Affordable Care Act referred to as “essential health benefits” cut. These benefits are required by law for insurance companies to have within their plans. These benefits include emergency-room visits, hospital stays, mental health, maternity, preventive care and prescription drugs. The House Freedom Caucus believes that these benefits are attributing to the high premium costs and is calling for their removal because not every person may utilize these benefits. It is a concern that these essential benefits might be taken out of the American Healthcare Act in an attempt to whip enough votes to pass the legislation.
This bill will hurt millions of Americans and is not in the best interests of this country but still has the potential to be a reality and leave millions uncovered.