The
Republican plan to repeal and replace Obamacare is to provide tax credit on
individual’s tax returns to cover the purchase of health care insurance. It really isn’t a health care plan, it is a
tax plan.
The way the plan would work is you
would get a credit on your tax return if you bought health care insurance during
the year (no one would be required to obtain insurance). The tax credit is based on a person’s age and
income. As time passes the tax credit
increases based on your age but not your income. Health insurance premiums therefore would
increase faster than tax credits so the tax credit would not cover the premiums. In addition, the premiums for older people
are allowed to increase up to 5 times the costs of younger people’s care
thereby increasing health care coverage for the elderly even more.
Based on the analysis performed by
the Congressional Budget Office (CBO), a non-partisan agency that calculates
the financial consequences of government policies, the Republican health care
plan would result in 14 million people losing health care coverage in the first
year. By 2026 the number of people
without health care would reach 52 million, 24 million more than if Obamacare
stayed in place. This reduction in
coverage is caused by three factors.
1) Without
the individual mandate required by Obamacare, many people, especially the
young, would voluntarily drop their coverage.
2) With
fewer people paying for health care and with a higher percentage of older
people on the health care roles, the price of health care insurance would
increase causing even more people to drop coverage.
3) As
years pass and health care premiums become much higher than the tax credits
provided by the government, even more people will be unable to pay for health
care insurance. In addition, expanded
Medicaid program offered by Obamacare will be dropped causing poor people
presently on Medicaid to be turned away, adding even more people to the roles
of the uninsured.
The
CBO analysis goes on to show that by 2026, almost 40% of the people age 30 to
49 with income below $30,300 would not have health care insurance. Were Obamacare still in place, the number is
projected to be only 20% without insurance.
For those between 30 and 49 with income above $30,300, 10% would
not have health care coverage under the Republican plan but under Obamacare
only 5% would be without coverage. The
conclusion of the CBO analysis is that older and poorer Americans would be hurt
the worst by the Republican plan while the young and the wealthy would get a
benefit.
Of course, many Republicans claim
that the CBO analysis is bias or incorrect.
However, both sides of Congress regularly depend on CBO analysis to
predict the outcome of congressional policies.
And the CBO projections are usually fairly accurate. For example, the CBO prediction of the total
number of uninsured resulting from Obamacare was off by only 20%. Considering the magnitude of Obamacare and
the uncertainties of the program, 20% accuracy is reasonable. Also, even if the CBO estimate is 50% off, 50%
of 52 million people is still a lot of people without health care. Before Obamacare, the United States was the
only industrialized nation that didn’t provide health coverage for all of its
citizens. If the Republican plan goes
through, the United States will again claim this notoriety. This is hardly “Making America Great Again”.
Terry AmRhein is the author of the new book, "Democracy on the Edge, A Discussion of Political Issues in America"
