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Wednesday, March 15, 2017

Trumpcare (Obamacare 0.5?) vs. Obamacare

     Remember Colin Powell's saying that "If you break it, you own it."   Somehow it wouldn't surprise me that any alternative to Obamacare will only spell trouble for Republican elected officials.  Anyone who thinks that the Republican replacement for Obamacare will actually be a rational alternative health care proposal would be disappointed.  The fact that this is the political reality is that many of the proposed changes will only happen after the 2018 and 2020 elections.  What is being proposed is simply a way to insure that health care will be less available and at a possibly greater cost than what we presently have with Obamacare.  What may seem like an alternative health care bill is really only another Republican attempt to limit government and do a tax cut for the wealthy.  Health care reform is only a smoke screen.
     Where to start to explain the differences between Obamacare and Trumpcare?  The starting point should be a look at 3 factors that drive the healthcare discussion.  Those 3 factors are 1) how many people get healthcare coverage, 2) how does it impact the rising cost of health insurance and 3) what is the cost to the government to subsidy the cost of healthcare insurance.   Here is how each plan addresses those 3 areas of healthcare.
       Obamacare has given approximately 20 million more people health insurance coverage than before the program.  The percentage of people uninsured before Obamacare was 15% and after it has fallen to 9.7%.  The number would have been substantially higher if the Supreme Court had not ruled that states don't have to take federal funds to increase the number of persons eligible for Medicaid.  An additional 5 million people could gain coverage if those states expanded Medicaid coverage. While it is hard to do an unbiased look at the costs of Obamacare but there is substantial healthcare  tax revenue generated to provide money to subsidize the cost for low and moderate income persons to purchase health insurance without substantially increasing the deficit.   The third area of controlling the rise in cost of health insurance.  While the cost of health insurance has increased for those that had low cost catastrophic coverage on average the rise in cost for insurance on average under Obamacare was less than before the legislation.

     So with Obamacare you get additional people covered with health insurance without a big impact on the federal deficit but without substantial measures to control the rising cost of healthcare.
      In examining the House proposed healthcare legislation supported by Trump its impact in the 3 areas is harder to examine as it is proposed but here is a best guess.  In the first area of how many people will have insurance coverage it is estimated by the Congressional Budget Office that  24 million people will lose their health insurance under the Trumpcare plan.   Expanding coverage will never be a realistic goal of any plan coming out from Republicans.   In the second area of impact on the federal deficit the Congressional Budget Office estimates that the federal will decrease by   337 billion under Trumpcare because of reduced Medicaid and federal subsidy funds to make insurance more affordable.  In the third area of controlling the rise in healthcare costs the Washington Post said this:
  "The CBO report predicted that premiums would be 15 percent to 20 percent higher in the first year compared with those under the Affordable Care Act but 10 percent lower on average after 2026. By and large, older Americans would pay 'substantially' more and younger Americans less."
     So where are the most problematic area of Trumpcare?  Start with doing away with the individual mandate that everyone has to have health insurance or pay a tax penalty.  This is the most hated part of the Obamacare program and yet it makes the other parts of the bill, like not penalizing people with pre-conditions and not allowing lifetime maximum limits, work.  I am not sure why this component is considered so bad when it is similar to requiring everyone who drives a car to have car insurance.  Can you imagine how many drivers would go uninsured if they didn't have to have insurance? Insurance only works if the risk is spread over enough people not using the insurance to subsidize the people who need the insurance.  That is the reason for insurance.

     So if you wanted to address the problem areas to reform Obamacare to make it work better here is what you would want to do:
1.Regulate insurers so they can’t refuse or charge high premiums to people with preexisting conditions
2.Impose some substantial penalty on people who don’t buy insurance, to induce healthy people to sign up and provide a workable risk pool.  The penalty should be higher than the cost of buying insurance.
3.Subsidize premiums so that lower-income households can afford insurance.

P.S. 1
    If we as a country wanted to provide health care with the best outcomes in a cost effective manner we wouldn't be developing systems like Obamacare or Trumpcare we would have a single payer like our friends up north and every other advanced country in the world.

P.S. 2

     Looking at my microwave this morning I saw that Kelly Anne Conway may have been right after all!

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