Obamacare Repeal/Replace: Good Changes, or Just ACA ‘Light’?

The process of repealing and replacing the Affordable Care Act, better known as Obamacare, has begun in earnest.

House Republican leaders unveiled their plans on Monday night with the eerily similar, yet more patriotically named, American Health Care Act.

The plan is designed to roll back much of Obamacare over the next three years. But how much, and in what way, is the subject of a lot of debate at this stage.

The process is just getting going, too. There will no doubt be a lot of changes/compromises to the bill before it is ready — and before it’s capable of getting enough Republican votes — to pass with a majority in the Senate.

A majority here is all that’s needed, as the Senate will almost certainly go into a process called reconciliation to pass the bill. This just means that, instead of the 60 votes needed to pass legislation, the Senate will only require a majority vote to get the bill passed.

So, what’s the deal with the new plan, and what are its major alterations from Obamacare?

The way I read it, here are the biggest changes proposed by the American Health Care Act:

  The bill would immediately end the Obamacare mandate that individuals have insurance coverage. The plan also ends the mandate that requires businesses of a certain size to offer healthcare coverage to their employees. However, the new plan allows insurance companies to impose a 30% price increase on people who go uninsured for more than two months, and then buy coverage.

  The new law proposes a refundable tax credit to help individuals buy insurance. The tax credits phase out as income levels increase. People under 30 would be eligible for a credit of $2,000 per year. That sum increases to $4,000 for those over 60. These credits replace the existing subsidy system.

  The size of a tax credit would grow with the size of a family, but the credits get capped at $14,000. Higher earners get less as their household income grows. For individuals, the credits begin to go down after $75,000 annually. For families, the decline begins at households making more than $150,000.

  The plan increases the limits on healthcare savings accounts that can be coupled with high-deductible insurance plans. The new limits are $6,550 for an individual, and $13,100 for a family.

  The bill tamps down the Obamacare expansion of Medicaid. The proposed new law changes the current system to a “per-capita system,” where states are given a set amount of money for the number of people in various categories (disabled, elderly, childless adults, pregnant mothers).

  The proposal allows parents to keep their children on their health plans until age 26.

  The plan gives states a $100 billion fund over a decade to help lower-income people afford insurance, and to help stabilize state insurance markets.

Although there are many other changes to the plan, these are the biggest, as I see it.

***

As for the cost associated with the American Health Care Act, well, that’s not certain yet. The Congressional Budget Office has yet to score the bill.

That means there is no non-partisan estimate yet on the cost front. Nor on how many people will gain or lose insurance coverage due to the new plan.

Of course, keep in mind that this is the first step in the process. There are likely to be significant changes to the bill before it gets voted on.

Still, the main objection from some circles, and from my viewpoint as well, is that this plan is a sort of “Obamacare Light.”

That’s actually the phrase used by Senator Rand Paul (R-Ky.), who offered up the following comments on the plan in an interview with Fox News:

“This is Obamacare light. It will not pass. Conservatives are not going to take it.”

Paul also said that the new law would “do nothing” to bring healthcare costs down, or to restrict the steady rise of premiums.

Healthcare stocks, as represented by the Health Care Select Sector SPDR (XLV), fell 0.7% today.

Taking a page out of President Trump’s playbook, Sen. Paul also took to Twitter (TWTR) to say that:

“We should be stopping mandates, taxes and entitlements, not keeping them.”

In the short time since the initial House plan has been released, there’s been a lot of comments from conservative Republicans and liberal Democrats in Congress about what’s wrong with this bill.

Yet one thing that’s right is its full contents are out there to see, both here and here.

Unlike its predecessor, where we had to pass the bill so that we could find out what was in it, the House didn’t make that mistake this time.

***

What do you think about the American Health Care Act? Is it a step in the right direction, or is it just more big government, “Obamacare light”? I want to know what you think, so let me know by leaving me a comment on our website or by sending me an e-mail.

***

The markets declined for a second day in a row. Energy (XLE, -0.9%) and healthcare (XLV, -0.7%) led the markets lower, and the Dow finished the day just below the 21,000 mark (down 30 points, or -0.1%).

• Gold fell to a four-week low ($1,216, -0.8%) as markets continued to contemplate the growing odds of a Fed rate hike next week. (Those odds are now over 80%.)

• WikiLeaks allegedly hacked the CIA. It says it has access to the Central Intelligence Agency’s own hacking tools, and that it has proof that the government body can spy on people through their TVs, smartphones and cars. (We warned you years ago that your smart devices may be spying on you.)

• More people set to watch YouTube than TV: Worldwide, users are now watching more than 1 billion hours of online video each day (vs. 1.2 billion for TV- and DVR-watchers). Parent company Alphabet (GOOGL) credits artificial intelligence that recommends videos to viewers. And with YouTube TV set to debut soon, look for that number to tip further into YouTube’s favor.

Good luck and happy investing,

Brad Hoppmann
Publisher
Uncommon Wisdom Daily

Your thoughts on “Obamacare Repeal/Replace: Good Changes, or Just ACA ‘Light’?”

  1. I keep hearing about “socialized” healthcare, but the more I talk to people who have actually lived in the UK and used their health care system, the more I like it.
    They say that just about everything we’ve heard on the news about their system is wrong. There is no ‘rationing’ and people don’t have to wait any longer than we do. If a practice is poorly run, it goes out of business. It covers everyone with basic healthcare, and if you pay more into it, you get more out of it. That doesn’t seem so “socialized” to me. The government subsidizes gas, highways, schools, police, and fire stations already. I don’t see what’s so scary about using tax dollars to subsidize healthcare too. We might have to cut back on our foreign adventures, though.

  2. Trump promised “Repeal and Replace”, now is supporting Obamacare-lite. I feel BETRAYED! Is he afraid of Rand Paul? Or just too proud to let Rand’s plan be adopted rather than his own?
    Rand has the BEST plan!

  3. The quickest way to settle the healthcare issue would be for Trump to issue an Executive Order for all Congress and all Federal Employees to come under the same provisions as the rest of the citizenry, then see how quickly things would get done.

  4. How will the new proposal deal with folks with “pre-existing conditions?” That’s VERY crucial!

    I’m skeptical that there is any solution that will be accepted by a majority of Americans and their elected officials. And the art of compromise doesn’t seem to exist in D.C. these days.

  5. A couple of things you all should know:
    The Health Insurance industry is the ONLY industry that is exempt from anti-trust regulation by virtue of the McCarron Ferguson Act passed by congress in the 1960s. This means they can collude on premium prices, deductibles, benefits, which companies get exclusive market in which states and threaten any doctors groups that dare challenge them. There is a bill before congress NOW to repeal this act and relegate the Health Insurance corporations to a level playing field with all other players in the market. Benevolence was once an expected tenet of medical practice……remember Baptist, Methodist, Sacred Heart hospitals? They were organized with benevolence in mind. They are all operated by public corporations today. BUT how about St. Jude’s Childrens Hospital? I used to work there and it is still operated privately on DONATIONS. Sure the donations come largely from corporations or corporate directed fund raising but also private sources as well….I also used to volunteer for Danny Thomas Golf Tourney. In my opinion, it is a direct conflict of interest for a publicly traded corporation (Health Insurance companies) to control healthcare delivery. Given the choice of paying their beneficiaries or their shareholders, who do you think they will defer to? MUCH MORE but know this…..if the government (ME) is tapped with paying for your healthcare, the government (I) deserve to have some say-so over how YOU take care of YOURSELF…..your lifestyle. If you play with your health (risky lifestyle), you must pay for your health. Insurance should be insurance and nothing more (not a savings plan). You can’t expect to wait until after you discover your house is infested with termites to purchase termite insurance. This venture is complicated for sure. The bottom line…….if an EMPOWERED consumer of healthcare who has the initial skin in the game CONTROLS healthcare expenditures, you can bet the costs will come down.

  6. This new bill is still terrible. The government needs to get out of the insurance business since they don’t seem to have a clue about what affordable health care is.
    Premiums and deductibles are too high.
    Take away all government employee’s health care as it is now and give them all the equivalent of one of these bronze plans and have them pay for upgrades and copayment like private businesses do.

  7. If you are going to publish what purports to be a newsworthy story, at lease give fair representation to those who have a different point of view. For example, “This bill would weaken Medicare’s fiscal sustainability, dramatically increase health care costs for Americans aged 50-64 and put at risk the health care of millions of children and adults with disabilities, and poor seniors who depend on the Medicaid program for long-term services and supports and other benefits,” said the letter, signed by Joyce A. Rogers, a senior vice president at AARP.

  8. Why is Trump taking/receiving credit for keeping kids on parents health plan until age 26? This is not new, Obama put this in place.

  9. We need to empower police death squads to shoot anyone over age 50 who is in the hospital with a deadly disease. This will cut costs definitively. I suggest we hire Philippine President Duterte to run such a program.

  10. Yes, this makes sense, tax credits for health insurance premiums. A few questions remain.
    What about unemployed people, will the government pay insurance premiums?
    What if their benefits run out and they need to take “Labor Ready” jobs, will they still get health support from the government?
    What about dental plans? Will there be major dental expense coverage like for crowns and root canals? Patients would pay out of pocket for routine dental and vision exams and a filling or two and for corrective lenses, unless they are unemployed or below poverty.
    Make sure all details are worked out before the new plan is implemented.

  11. Just how accurate was the CBO scoring of Obamacare? Just another govt department that is useless.

  12. Screw ideology and go Single Payer like the rest of the world’s developed countries. It covers everyone, costs less and has helthier outcomes in every way. What’s actually wrong with this evidence-based idea?

  13. Problem is that it is STILL with baked-in high margins for the Insurance companies!!
    Should emulate Canada, etc.

  14. BTW – I’m with Broomy. Doesn’t anyone remember how terrible it was before ACA? The best idea is a very basic socialized medicine plan that includes birth control, mental health and encourages people to stay healthy through education and incentives. Keeps very tight reigns on big pharma and hospitals so they can’t over charge. Then, If you have the money, you can super size your plan with additional insurance and have your own specialists. Partially pay for it buy cutting down on our useless military budget that is filled with waste and abuse.

  15. You forgot to mention that is screws poor people and gives huge tax cuts to the wealthy and to big medicine and pharma companies.

  16. Repeal and replace with the free market? Really? Do you forget all the stories of people being denied coverage, or having their rates raised to astronomical levels when they get ill? Or what about hospitals, who were not allowed to deny coverage in emergency situations, being forced to raise costs for everyone else, which were then paid by insurers, who then had to raise rates for healthy people to stay solvent? Rates have been rising more slowly since Obamacare came in. You may say “don’t treat them” (i.e. let them die), but we as a society have enough compassion for others that we are not willing to do that.

    To lower health care costs we need to reign in prescription drug manufacturers, who sell their products cheaper to people outside the US because those governments use the leverage they have. Our representatives are just bought and paid for by the Pharma industry. And physician fees would decline if we allowed more students to earn medical degrees, and didn’t limit the number of trained doctors we allow to emigrate to the US. Oh, right. That would impinge on the rights of doctors and Big Pharma to earn those big fees and profits.

  17. As far as I can see with this nonsense is they are keeping everything that adds to cost, keeping adults on parents insurance, doing away with exclusion of preexisting conditions and extending medicaid at least until they get through the next election cycle. Then, they are taking away everything that is in place to pay for the program. Taking away individual mandates, taxes on medical equipment manufacturers and taking away the employer mandate to cover their employees. The mess is just getting bigger.

    By the way, I’m one who will be impacted by the removal of the preexisting conditions clause but that condition is what life has dealt me and I don’t see a reason to make my neighbors or future generations pay for it. Repeal the government run health care and go with a free market system which will be a truly remarkable solution in today’s environment.

  18. I know people will always game the system to take advantage of public entitlements, but I can’t in good conscience see why our government should not support universal health care – deny health care to people because they are poor . . . . ??? Not saying the current law shouldn’t be reformed, but the evidence is there that it has literally saved lives because of its reach.

  19. What about the law that requires insurance companies to pay out 80% of the premiums they take in for health benefits. If not, the premiums will continue to rise faster then inflation. I’m wondering if ACA is starting to be effective. My premium didn’t go up this year.

  20. Speaking of entitlements (for life), I think we should get the plan that members of Congress get!

  21. Rand Paul seems to be the only person in government who has a grasp on how democracy should work. I totally agree with his idea of auditing the Federal Reserve and repealing Obamacare. I just wish other members of congress would seek his advice.

  22. Rand Paul’s bill was passed by the legislature and Obama veto it. It can work but the Republican management have side tracked it. We are being sold out. Get rid of Paul Ryann.

  23. Obamacare needs to be 100% eradicated with no replacement. Replacement is a Jedi mind trick of the Left.

  24. I think this a good step in the right direction.
    I have always wondered why Obama called it “Affordable Health Care” Who was he kidding.
    Our premium almost tripled. So to keep it “affordable at $1,400.00 a month for two people” we got a $7,500.00 deductible.
    Out daughter could get Obama care at $400,00 a month. She got privately insured for $180.00
    with a $1,500.00 deductible. She is fitness instructor.

  25. I believe Sen. Paul is right.
    Trump won by being bold. He needs to be bold on this as well

  26. I hope Congress keeps the current Affordable Care Act as it currently exists and not revamp it. Concern is people will start to depend on Emergency Care again if they lose their health plans and dump the costs on the public. More expensive to go the Emergency Room route, rather than preventative care via a MD.

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