The World At Home
2017-07-04 14:33:04 -
Opinion
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As Americans prepare to celebrate the 241st anniversary of the Declaration of Independence on 4 July 1776, they are also facing the prospect of three-and-a-half more years of Congressional deadlock on a multitude of domestic public policy reforms. With the Republican Party finally back in control of both houses of Congress and the White House for the first time in a decade, this wasn’t supposed to happen. And while Republicans like Texas Senator John Cornyn blame Democrats for not working with Republicans on healthcare and tax reforms, the real culprits are his fellow Republicans.

Exhibit A is the American Health Care Act (AHCA), the bill for which the US House of Representatives passed on 7 May by the narrowest of margins. Even though Republicans held 239 seats and a healthy 46 vote advantage over their Democratic counterparts, the final tally on their Obamacare replacement legislation was just 217 to 213, so a swing of just two Republican votes would have spelled defeat for this proposal. Subsequently, Senate Republicans refused to consider the “mean” AHCA alternative to Obamacare and instead chose to develop their own Trumpcare bill that they called the Better Care Reconciliation Act (BCRA).

While the Senate Republicans’ BCRA legislation appears to be “more gracious” than the AHCA proposal, it is actually tougher on poor Americans over the long haul. It only looks kinder because the Senate chose to wait until 2021 to begin reducing the number of low-income families who would qualify for government-subsidised Medicaid programme that currently provides health services to 75 million children and adults. Unfortunately for lower-income Americans who are poor, or elderly, or children, 15 million of them would lose all their coverage by 2026.

A side-by-side comparison of Obamacare, or the Affordable Care Act (ACA), with the House AHCA and Senate BCRA proposals as conducted by the Congressional Budget Office (CBO) is most revealing. By making deep cuts in Medicaid and insurance subsidies, the House bill would reduce the federal deficit by $119bn, and the Senate proposal by $331bn. But while the ACA reduced the number of Americans who are uninsured from 57 million to 28 million, the AHCA and BRCA would reverse this and push the number of uninsured up to 41 million by next year and to 50 million by 2026.

Because many of the low-income Midwestern voters in states like Michigan, Wisconsin and Ohio are dependent on these programmes, on the campaign trail President Donald Trump repeatedly promised to “save Medicare, Medicaid and Social Security without cuts”. When he first launched his campaign in June 2015, he also told his supporters that in order to save those programmes without cuts: “[We] have to do it. Get rid of the fraud. Get rid of the waste and abuse, but save it.”

Senate Majority leader Mitch McConnell and his fellow Republican Senators also touted two other so-called benefits of their healthcare law. For the past five years, Republicans have repeatedly claimed that one of the main reasons why they needed to repeal Obamacare was to slow the rising premiums for healthcare. Under the Senate plan, premiums would rise initially but decrease by as much as 20 per cent thanks to a combination of reduced benefits and higher deductibles and co-pays.

The other main factor cited by Senator McConnell and others who wanted to repeal Obamacare was their desire to reduce taxes on middle-class Americans. While the Senate bill does eliminate the tax penalties for not having insurance, it also reduces the tax credit subsidies that make health insurance more affordable for middle-class Americans like me. While the healthcare premiums paid by younger Americans would eventually go down, many older middle-income taxpayers who don’t qualify for subsidies would end up paying a much higher share of their income for premiums.

The reality of both the House and Senate versions of Trumpcare is that they both represent a repudiation of President Trump’s campaign promises to the lower- and middle-income supporters in states that were crucial to his election. According to the non-partisan CBO, a 64-year-old man with an annual income of $26,500 would pay an extra $4,800 per year for an insurance plan that would cost him just $1,700 a year under Obamacare, while a similar man with $56,800 in annual income could expect to pay a whopping $20,500 instead of $6,800.

A few younger middle-class American taxpayers might eventually see a reduction in their taxes and health insurance premiums, but most of that decrease is also accompanied by a reduction in certain types of healthcare coverage, and or an increase in deductibles. The real beneficiaries of the House and Senate Trumpcare bills are Americans who earn over $250,000 a year. Under Obamacare, those taxpayers must pay a 0.9 per cent income tax surcharge as well as a 3.8 per cent tax on their yearly investment income. But with Trumpcare, families that make over $3.9m a year will get a $200,000 tax cut.

While the Senate plan does maintain the Obamacare programme’s provision that prohibits denying coverage to people with pre-existing conditions and charging sicker Americans higher premiums, it also allows states to seek waivers that would allow insurers to offer cheaper plans that would eliminate some of Obamacare’s essential health benefits, such as treatment for mental health and drug addiction issues.

Obamacare has its flaws and shortcomings, but it was still a programme designed to provide healthcare to working-class Americans who needed it but could not otherwise afford it. Instead of trying to fix Obamacare, however, Republicans seem determined to throw the baby out with the bath water.

Charles Laffiteau is a US Republican from Dallas, Texas pursuing a career in public service. He previously lectured on Contemporary US Business & Society at DCU from 2009-2011 and pursued a PhD in Public Policy and Political Economy.
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