Friday, February 17, 2017

Obamacare rewrite plan: Good for the rich, not so much for the poor — or Arkansas

Posted By on Fri, Feb 17, 2017 at 7:37 AM

Republican congressional leaders and staff have prepared on outline for repeal and replacement of the Affordable Care Act, or Obamacare, and a New York Times analysis suggests its approval would be bad news for poor people and Arkansas. Rich people? Better news.

It would expand the number of people who could potentially benefit from federal help, but the changes would come in who would benefit most, the article says.

Obamacare, as the A.C.A. is known, extended health coverage to 20 million Americans through two main mechanisms. It expanded Medicaid coverage to Americans below or just above the poverty line in states that participated, and it offered income-based tax credits for middle-income people to buy their own insurance. Obamacare was a redistributive law, transferring money from rich to poor.

The Republican plan would alter both of those programs, changing the winners and losers. It would substantially cut funding for states in providing free insurance to low-income adults through Medicaid. And it would change how tax credits are distributed by giving all Americans not covered through work a flat credit by age, regardless of income.

That means that the biggest financial benefits would go to older Americans, like, say, Secretary of State Rex Tillerson. If he didn’t have a job in the Trump cabinet and access to government coverage, a 64-year-old multimillionaire like him would get the same amount of financial assistance as someone his age, living in poverty, and he would get substantially more money than a poor, young person.
I supplied emphasis to one sentence because it holds peril for Arkansas, where the Obamacare/Private Option/Arkansas Works Medicaid expansion has — while adding 300,000 people to ranks of insured — swollen the state treasury with money that has allowed $100 million in tax cuts on top of state budget balancing.

The article acknowledges some benefits in streamlining how benefits are provided and in matching tax credits to age. But ....

... the current system is set up to ensure that low and middle-income Americans can afford the cost of their premiums. The Republican plan would not do that, and would result in many more low-income people losing out on coverage if they couldn’t find the money to pay the gap between their fixed tax credit and the cost of a health plan
.None of this will come quickly or easily. So there's that.

Nobody is talking single-payer universal health coverage, which would cut through all the crud and make the U.S. not exceptional but at least on a par with other developed countries.

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