Just a quick refresher on the ACA animosity in the Republican Party

Our friend Scottie asked me why the Republican Party detests the Affordable Care Act (ACA) so much and wants to kill it. I have written many posts about this, but here is quick refresher.

The Republican party has spent about ten years nay-saying the ACA. This is in addition to actual efforts to sabotage it by Senator Marco Rubio and President Donald Trump and the fourteen states who still have not expanded Medicaid. Rubio and Trump’s actions caused premiums to increase. Blue Cross and Blue Shield of North Carolina (BCBS of NC) said it was geared to have a 0% increase in 2018, but after Trump de-funded reimbursing insurers for co-pays/ deductibles for people making less than 2 1/2 times the poverty rate, BCBS of NC said it would have a 6.6% increase. Not only did Rubio’s action cause premiums to go up, it drove some insurers out of the exchanges lessening competition which also hurt consumers. *

So, to me the Republicans are so far down the path of killing something that is working pretty good (it still needs improvements), they cannot stop. And, it is apparent that Trump has an Obama obsession that he must kill everything that Obama did regardless of its level of efficacy. As a retired benefits consultant and former actuary, what the GOP came up with in 2017 to replace the ACA was god-awful. It was throw-against-the-wall planning. The fact the Republicans did not follow due process was a key reason Senator John McCain voted it down. Mind you, I fault Obama for the terrible roll out of the exchanges in 2013, but he at least involved Republicans in the planning process in very public sessions (although they were told not to vote for it).

And, here is the rub. The reason the GOP does not have a plan is the ACA is largely based on a Republican idea set in motion by Mitt Romney for Massachusetts, when he was governor. It worked so well, that Senator Jim DeMint, the leader of the Tea Party, advocated its national use in writing to President George W. Bush. And, DeMint politicked with Romney on stage in 2008, Romney’s first run for president. I recognize the ACA is not exactly the same as Romneycare, but there are a number of similar constructs.

Everything I mention above, including the DeMint piece can be found by Googling. But, here is the major concern I have. Employers have been going to more part-time and contract work forces even before the pandemic. Why? – to avoid providing subsidized health care benefits. So, to survive in this gig and part-time employment world, the ACA is essential.

Plus, the ACA imposes requirements on employer based plans as well that may go away if SCOTUS rules unwisely with the court case. Those include pre-existing condition protection, guaranteed renewability, no deductibles on wellness visits, and limitations on insurer margins in pricing, e.g. So, a bad SCOTUS ruling could impact over 200 million Americans not just those in the exchanges and Medicaid.

* Note: The reason for the premium increases are complex, so I will mention them here. Rubio led a Republican move to defund 89% of the payments to insurers for adverse selection (pent up demand for new policy holders) for the first few years, a process used when Medicare Part D was rolled out. Insurers were forced to increase premiums and some left the market with the US owing them money that was promised. The Trump change is more complex. By stopping the reimbursement to insurers for this extra benefit for low paid policyholders, the insurers still honored their commitment to the policyholders. This drove up premiums. Trump said this would only impact insurer profits, but that was not true. The CBO said it increased the annual deficit by $10 billion because the premium subsidies went up as well. The people who ultimately got screwed were those who did not get a full subsidy.

My former party does not know much about healthcare

The Graham-Cassidy Bill seems to be on its last legs, but these bills are like Jason – just when you think you kill the serial killer, he remains alive. This latest effort may be the worst bill by my former party, which I left in 2006. It is apparent to me that Republican leaders don’t know much about healthcare and don’t care to know or take the time to know. That includes the man in the White House who just wants to sign something that negates something Obama did. “Who knew healthcare could be so complicated?” he asked earlier in the year. The answer “Everyone, but you.”

Every bill either put forth by the Senate this year or passed by the House has been scored poorly by the Congressional Budget Office (CBO), has been not appreciated in polls and has been denigrated by medical and hospital associations. Not involving women, Democrats, experts and due process in the planning revealed a haphazard approach to legislation.The Graham-Cassidy Bill is the worst of the bunch as it places the burden, and eventually all of the financing, on the states. In a nutshell, the bill says we cannot figure this out, so we are punting it to you.

In addition to the tens of millions of Americans negatively affected by these bills, if passed, the authors make a concerted effort to kick people in poverty and near-poverty in the teeth. Since we have a poverty problem in America, these bills are especially cold-hearted. And, Graham-Cassidy gives states the right to do away with pre-existing conditions, which was incorrectly refuted by Cassidy after being called on the carpet by Jimmy Kimmel. Seeing protestors in wheel chairs at the Senate was telling.

Further, I have shared with Senators, Congressional Representatives and the White House, these bills would be dilutive to the economy. Standard & Poor said yesterday in their global report the Graham-Cassidy would harm the American economy by $240 Billion through 2027 and cause 580,000 job losses. In a nutshell, when people in need no longer have insurance, the trade-off becomes between food/ rent and medicine. So, less is spent in the market place which dilutes the economy.

Yet, let me emphasize one thing that has been raised by more than a few state Medicaid Directors and Governors. Building a new healthcare delivery system will take longer than the time given. In my view, it will take longer than even these folks are thinking about. In business and government, leaders tend to vastly underestimate the complexity to set-up administration of things. As President Obama found out, setting up healthcare exchanges was hard and initially failed to deliver.

This is an important observation about the Affordable Care Act. It is in place. It is not in a death spiral and it is not broken. From the lens of fewer uninsured, it has been successful. Yet, it needs improvements, but first it needs to be stabilized. Part of the reason for the latter is the GOP’s efforts to hamstring its success by defunding subsidies for adverse selection to insurers. Coupled with slow funding of other subsidies, nineteen states who did not expand Medicaid and general naysaying, the law has not been given full opportunity to be successful.

So, this retired benefits actuary, consultant and manager recommends the ACA be stabilized under some version of the bipartisan Alexander/ Murray Bill. Then all members of Congress can spend more detailed and thoughtful time in deciding how healthcare can be delivered going forward. My recommendation is they improve the ACA.