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House GOP Leaders' Health Care Alternative Falls Short on Coverage Numbers Because It Keeps ObamaCare's Architecture in Place

Tuesday, March 14, 2017 9:32
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Philip Klein of the Washington Examiner and Michael Cannon of the Cato Institute have picked up on an important point from the Congressional Budget Office’s score of House Republican leadership’s ObamaCare “alternative,” the American Health Care Act (AHCA). Klein and Cannon note that more people would have health insurance coverage under the 2015-2016 repeal bill, H.R. 3762, than under the AHCA.

The 2015-2016 repeal bill, known as the Restoring Americans’ Healthcare Freedom Reconciliation Act, repealed much of ObamaCare, including most of the 2010 law’s taxes, its tax and cost-sharing subsidies, and costly expansion of Medicaid. The bill also zeroed out the individual and employer mandates, though these two provisions would have continued to exist in statute, as the AHCA also proposes.

According to a June 2015 report by the CBO, the 2015-2016 repeal bill, which, unlike the AHCA, didn’t have any replacement provisions, would have increased the number of uninsured by “[a]bout 24 million.” Separately, in January 2017, the CBO estimated that a full repeal of the ObamaCare, including the essential health benefits and other costly mandates, would increase the uninsured by “about 23 million in 2026.”

The AHCA, which includes replacement provisions such as tax and cost-sharing subsidies, according to the CBO’s estimate, would increase the uninsured by 24 million. The AHCA, the so-called ObamaCare replacement, covers fewer people that an outright, full repeal of ObamaCare.

Now, there are a couple kickers with this. The CBO assumes that fewer people would, by choice, not because they lack the financial means, would opt to purchase health insurance coverage because of the gutting of the individual mandate. “There is ample reason to believe the CBO models overstate the coverage gains achieved by ObamaCare’s individual mandate,” Cannon explains, “and the coverage losses the agency projects would follow its repeal.”

Another reason coverage losses are high under the AHCA is because the proposal leaves many of the cost-drivers in place. “[T]he Republican replacement preserves many of Obamacare’s regulations that drive up the cost of insurance. So, in essence, the GOP alternative would be asking people to purchase expensive Obamacare plans, with less financial assistance,” Klein notes. “In contrast, while full repeal would offer no assistance, because it would get rid of Obamacare’s regulations, it would make insurance cheaper.”

In short, the AHCA may have so important reforms, such as the expansion of health savings accounts, but it keeps too much of ObamaCare’s architecture in place to adequately reduce health insurance premiums. Congress absolutely should repeal ObamaCare, but they need to do it right.


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