Senate health plan will either fine-tune Obamacare or set the clock back to 2008

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Steve’s Take:

Obamacare is a great, albeit imperfect, work-in-progress health program, destined to catch us up with the rest of the world where access to care is a right, not a privilege for those who can afford it.

Steve's Take: Access to #healthcare is a right, not a privilege for those who can afford it Click To Tweet

Yes, great stretches of the planet loathe the US because of our power and global use of it to suit our purposes. But until the enactment of the Affordable Care Act, we were also held in low repute for our healthcare system.

After some 22 million people gained coverage under Obamacare, and after some seven years of Republican attempts to gut it, the House GOP passed its healthcare reform bill earlier this month, and even most Republican senators still considered it too brutal.

Among other things, many are reportedly concerned that the bill’s flat tax credit to help people afford premiums would leave millions of Americans without coverage. So instead of taking up the House bill at all, Republican senators are starting from scratch and reportedly coming together around a refundable tax credit that adjusts up and down in response to household income.

This is precisely what Obamacare already does. If your household is at or below 400% of the federal poverty line, you get a refundable tax credit to help with premiums. And the poorer you are, the bigger the credits are to make sure you spend a smaller portion of your income on health coverage.

There’s a lesson here, says Jeff Spross for The Week.

Republicans like to talk about Obamacare as if it was an ideological exercise that created higher insurance costs just to punish job creators, Spross argues.

“In fact, Obamacare was the result of a long and arduous process of exacting policy design. It was also a genuine attempt at bipartisanship. Obamacare was not the Democrats’ ideal healthcare reform. They thought of it as a compromise,” says Spross.

On the subject of the ACA’s tax credits, House Speaker Paul Ryan’s motivation for the flat tax credit–which adjusts for age, not income–wasn’t entirely foolish. If your tax credit phases out as you make more money, that might discourage you from taking a higher-paying job.

But some people face insurance premium burdens that are much higher than others. So a flat tax credit would have to be big enough to cover the worst cases, and then you’d have to give it to everybody. Spending would be far greater.

Republicans, of course, hate big spending and deficits, and many Democrats agree with them. So Obamacare went with income-adjusting tax credits, because they still give the poorest people the most help, but save money on people who need less help.

By contrast, Ryan and the House GOP resolved this dilemma by making a flat tax credit that’s far too tightfisted. Lots of low-income Americans, as well as older Americans and people in rural areas–who both face higher premiums than usual–would be injured by their plan.

Realizing this, Senate Republicans seem to be gravitating back to the Obamacare model.

“To do healthcare reform and yet people may not have the means to actually purchase health insurance policy doesn’t seem to me to take us anywhere,” said Sen. Bob Corker (R-TN).

Republicans want to allow insurers to offer sparser coverage packages and charge people high out-of-pocket costs like deductibles and copays. But while that lowers premiums and thus the cost of premium subsidies, it also raises out-of-pocket costs and thus the need for out-of-pocket subsidies.

Senate Republicans are also petrified of the House’s massive cuts to Medicaid. Senate negotiators, meeting stiff resistance to the House’s plans to sharply cut the scope and reach of Medicaid, are discussing a compromise that would maintain the program’s expansion under the Affordable Care Act but still subject that larger version of Medicaid to new spending limits, says The New York Times.

With 62 senators, including 20 Republicans, coming from states that have expanded Medicaid under the Affordable Care Act, the House’s American Health Care Act almost certainly cannot pass the Senate.

The House bill to repeal the health law could leave millions of Medicaid beneficiaries without healthcare coverage, but in a House debate focused more on pre-existing medical conditions and tax cuts, the bill’s sweeping Medicaid changes received much less attention.

Those changes would, for the first time, put Medicaid on a budget, limiting federal payments to states for care provided to tens of millions of low-income people–not just those who gained Medicaid coverage as a result of the Affordable Care Act, but also children, people with disabilities and nursing home residents who have been eligible for decades under the law that created Medicaid in 1965.

The House bill would cut expected Medicaid spending by more than $800 billion over 10 years, according to the most recent estimate from the Congressional Budget Office.

States could face tough choices because Medicaid spending per beneficiary is expected to increase faster than the limits in the House bill, according to the Congressional Budget Office and an independent commission that advises Congress on Medicaid policy. State governments could cut services, limit beneficiaries or take on more of the funding responsibility.

“We have a hard time seeing this as anything more than a budget fix for the federal government,” said Leslie M. Clement, director of health policy and analytics at the Oregon Health Authority, which runs the state Medicaid program. “It’s a cost shift to Oregon and other states.”

If you want universal health care for all Americans, but you also want to keep private insurers and private insurance markets around, you’re inevitably thrown back onto some version of Obamacare, Spross contends. The only way to avoid it is to simply abandon the idea of universal coverage altogether–which is effectively what the House GOP did.

But as former George W. Bush speechwriter David Frum pointed out: “The trouble for Republicans is that the principle of universal coverage has now been accepted by a majority of Americans.”

So unless Senate Republicans want to follow their House comrades into political oblivion–or unless they want to do something really radical and propose single-payer–they’re about to learn a very hard lesson: All roads lead back to Obamacare.

Bottom Line:

William Collins for the East Bay Times says that there’s a “happy” difference from the world’s frightened view of our belligerent use of power and our pre-Obamacare stance on the right of all to health care.

“While war has a malevolent impact on nearly every nation, our healthcare system hurts only us,” said Collins.

Back in 2008, some 45 million Americans had no coverage at all; coverage for poor people was shoddy; major employers were unloading costs onto their employees; doctors who treated the poor were poorly treated themselves; many young, healthy people skipped coverage altogether in order to save money; and HMOs definitely didn’t want you if you were sick.

Health costs were sky-high and growing rapidly; programs for poor children often collapsed; Medicaid was hit and miss in many places; and finding reasonable coverage was the equivalent of running a marathon, even for the middle class. Naturally, all this turmoil, confusion and waste mystified Europeans, Canadians, Japanese, and other citizens of the Western World.

Americans were supposed to be smart, Collins recalls: “How could we be so stupid about health care? Hey, if we could be so stupid about war [Iraq, etc.], health care was a piece of cake.”

Then along came Obamacare, and our national IQ was restored.

Fast forward to today. Are we going to turn the clock back to 2008 and prove the rest of the world correct? That we are truly daft? I think not.

And remember that making phone calls to your Senator’s office or attending events is far more effective than merely posting to Facebook, Twitter, LinkedIn and the many other social media sites.