Article originally published in the American City Business Journals on May 9, 2017
On May 4, Republicans in the House of Representatives were able to muster enough votes to pass the American Health Care Act (AHCA) by a slim margin of 217-213.
Its passage fulfilled the first step in President Donald Trump’s campaign promise to repeal and replace former President Barack Obama’s Affordable Care Act (ACA).
Major issues with ACA
The ACA certainly needed change after its failure to operate as intended. Earlier this year, a publication of the Heritage Foundation expressed much of the conservative feeling about the law when it said that “one of the stated aims of … ACA was to increase competition among health insurance companies. That goal has not been realized, and by several different measures the ACA’s exchanges offer less competition and choice in 2017 than ever before.”
Under the ACA, many insurance companies abandoned the insurance exchange market because they were operating at a loss. The health insurance premiums they charged their customers were not covering the costs of providing them health care benefits.
But simply raising health insurance premiums will drive younger, healthier people to instead pay the individual mandate penalty, which is much less expensive than the premium for health insurance. These individuals only buy health insurance when they become sick and face significant health care costs, which isn’t the way insurance is supposed to work.
The AHCA replaces the individual mandate with a 30 percent insurance premium surcharge if an individual’s health insurance lapses for a year. It is unknown whether this will be sufficient to attract younger, healthier people to purchase health insurance and provide balance to the insurance risk pool.
AHCA doesn’t deliver what Americans want for their health insurance coverage
Whether the ACA needs to be repealed and replaced or just fixed depends on one’s point of view. What matters is whether Americans have access to reliable, affordable health care insurance within a competitive marketplace that is stable and sustainable.
In a last-minute effort to win sufficient Republican votes from conservative Freedom Caucus House members to pass the AHCA, a provision was added to the bill that enables the states to make many health care policy decisions that were the purview of the ACA.
As the New York Times explained, the AHCA “would set up a waiver program that would allow states to apply to eliminate three major insurance regulations established by Obamacare. States could get a waiver if they attested that the changes would achieve one of five broad policy goals, such as increasing the choice of health plans.”
The waiver would also permit insurance companies to charge people with pre-existing conditions and seniors higher insurance premiums, as much as five times higher than younger, healthier people.
Twenty Republicans voted against the AHCA because the bill potentially allows the states to gut health insurance coverage and place Americans in harm’s way.
Just prior to the passage of the ACA in 2010, Democratic minority leader Nancy Pelosi infamously commented, “We have to pass the bill so that you can find out what is in it.” A similar thing occurred with the passage of the AHCA. The House passed the bill before the non-partisan Congressional Budget Office (CBO) could score the impact of the changes that were added at the last minute to win over Freedom Caucus House Republicans to garner the needed votes for passage.
The ACA prohibited the capping of health care benefits provided by companies to their employees. The ACHA permits companies to reinstate this cap. Did those House Republicans that voted to pass the legislation read it? How would they like it if they as members of Congress faced the same cap on benefits?
The drive for a “win” by the Republicans last week was so strong that getting the legislation passed was more important than getting it right. The callous disregard for how the AHCA could be a matter of life and death for many people and how it impacts an industry that comprises one-sixth of the economy is astounding.
Now it’s up to the Senate
If the Senate passes a version of the AHCA and the differences with the House version are reconciled, “Trumpcare” will be the law of the land. Let’s hope the Senate’s wisdom and concern for Americans far exceeds that of the House.
It was encouraging to hear Republican Senator Lamar Alexander, chairman of the Senate’s Health, Education, Labor and Pensions Committee state, “The Senate will carefully review the House bill, and now we will go to work on a Senate bill. … we want to get it right.” We shall see if Alexander’s Republican colleagues in the Senate feel the same way about getting it right.
Why place people at risk of losing their health care insurance?
Based on earlier versions of the AHCA, the CBO estimated that 24 million people could lose their health insurance coverage by 2026. That number may be higher after the CBO scores the AHCA that was passed by the House.
What is personally troubling to me is that House Republicans who voted for the AHCA were willing to put Americans at risk of losing their health insurance. Comments by some Republican House members showed a complete lack of sensitivity, care and concern for the most vulnerable Americans. Does this reflect our nation’s values? I know it doesn’t.
Hopefully the Senate will make changes to the AHCA that, while likely not acceptable to the conservative members of the House Freedom Caucus, will be acceptable to enough House and Senate Republicans and Democrats to provide reliable, affordable health care insurance within a competitive marketplace that is also stable and sustainable.
Stan Silverman is founder and CEO of Silverman Leadership. He is a speaker, advisor and nationally syndicated writer on leadership, entrepreneurship and corporate governance. Silverman earned a Bachelor of Science degree in chemical engineering and an MBA degree from Drexel University. He is also an alumnus of the Advanced Management Program at the Harvard Business School. He can be reached at Stan@SilvermanLeadership.com.