The AHCA

What’s the issue? Last week the House of Representatives passed a revised version of the American Health Care Act (AHCA). If it passes in the Senate, it will replace the Affordable Care Act and become law of the land.

Why do I care? This is a terrible bill. An older version of the AHCA failed to come to a vote in the house a few weeks ago because Republicans did not have the votes to pass the bill. According to the Congressional Budget Office (CBO), that bill would result in 24 million Americans losing their health insurance. Additionally, health insurance premiums would likely rise for everyone (at least in the short term) and in the long term most of the benefits of lower premiums would be reserved for the young and the healthy. The legislation would also disproportionately hurt the poor and benefit the rich, as can be seen in this chart.

We don’t know what the impact of the revised AHCA would be exactly because Republican legislators quickly pushed the bill through the House without waiting for the nonpartisan impact analysis. However, the changes in the revised AHCA are mostly to appease the ultra-right Freedom Caucus and unlikely to improve the impacts noted above. Here are the basic changes:

• The revised AHCA allows states to opt out of three of the Affordable Care Act’s (ACA) core provisions:
  •  The essential health benefits provision. This provision requires that every insurance plan cover a core package of health benefits, which include doctor’s visits, emergency services, hospitalization, maternity and newborn care, mental health and substance abuse disorder services, prescription drugs, rehabilitative and habilitative services and devices, laboratory services, preventive and wellness services, chronic disease management, and pediatric services, including oral and vision care. Opponents of the provision think that people should not have to pay for services they will never use. However, if you remove all of the people who will definitely not use a service from a particular insurance pool, it becomes much more expensive for those who need the service. Insurance is profitable for insurance companies because they can charge more in premiums than they spend on health services. So, if you have 10 people who buy maternity coverage and only 3 people use it, the insurance company can charge a relatively low premium for everyone to receive that coverage. However, if only people who expect to use the maternity coverage are buying that insurance, then you might have 10 people who buy maternity coverage and 9 who use it. In this case the insurance companies have to charge much higher premiums to make a profit. In essence this means that those who are sick (or women) (and need chronic disease management, or mental health care, for example) will pay much more for insurance than those who are healthy (or men). An additional problem with this approach is if a person buys a plan without mental health coverage, say, and then is diagnosed with a mental health condition, he will find that his insurance does not cover his treatment.
  • The community rating. The community rating says that insurers must charge the same amount for people of the same age. This means that insurers cannot charge sick people (or people with pre-existing conditions) more than healthy people. Opting out of the community rating technically is not getting rid of guaranteed coverage for people with pre-existing conditions. Insurers would still be required to sell someone with diabetes, for example, an insurance plan. However, the insurance companies could charge as much as they want for that plan, which means that health insurance for those with pre-existing conditions would be much more expensive, and possibly prohibitively so.
  • The age rating rule. The ACA lowered the price of insurance for older customers and charged younger ones more. Without the age rating rule, older people (and especially those who are poor) will see their price for insurance rise so dramatically that many will forego insurance. The CBO estimates that an average 64-year-old earning $26,500 would need to pay after the government subsidy would increase from $1,700 under the ACA to $14,600 under the ACHA (which is over half of that person’s income). As older people (who tend to use more health services) drop out of the insurance market, premiums would indeed decrease for younger, healthier customers.
• The revised AHCA also requires states that opt out of the provisions above to create high-risk pools and allows them to draw on an $8 billion fund to help lower premiums. The idea here is that by putting high-risk people (those with pre-existing conditions) into a pool apart from healthy people, insurance premiums will be lower for healthy people. However, as discussed above, the premiums for those in the high risk pools would be very high, and likely unaffordable for many. That’s where the $8 billion fund comes in- states that waived the ACA provisions and set-up high-risk pools would be able to access a pool of $8 billion in federal money (total for five years) to help decrease the cost of the high-risk pool. The problem is that economists say that’s not nearly enough money. The low-end estimates for a well-run high-risk pool system is about $150 billion each year, the high-end estimates run much higher. Even if you take into account other government subsidies available to states through the AHCA, the total comes to $138 billion for five years, and no mechanism for renewal after that. Thirty-five states had high-risk pools before the ACA was implemented, so we know that these pools have not worked very well in the past. They were plagued with problems including high premiums, waiting-lists for coverage, and lifetime caps on health care expenditures.

The question, of course, is how many states would waive the ACA provisions and draw on the $8 billion fund for high-risk pools. We don’t know that for sure, but the consequences are so dire (especially for those who are poor and/or in need of extensive health care) that I vote we don’t wait around to find out. This bill has already passed in the House, so it’s imperative we make our voices heard before it comes to a vote in the Senate.

What can you do if you care to?

1. Attend town hall meetings. The House is in recess this week, and so the members are in their home communities. Attend their town halls to express your opinions on this bill, and ask them to hold town halls if they aren’t already. Here is a list of how each member of the House voted on this bill. You can see if your representative is holding a town hall meeting here, and here are some nice pointers on what to do once you’re there.
2. Call your senators. Call them right now and again tomorrow and again the next day until they vote on this bill, and make it clear that the AHCA is unacceptable.
3. Donate to get those who voted for the AHCA out of office. The ActBlue Fund has identified the 24 members of the House who are from districts were Trump got less than 50% of the vote, meaning that they are more susceptible to being voted out. The fund is collecting money now, and will donate the money to the members’ democratic challengers in 2018. This has the double effect of punishing these representatives now and also incentivizing democrats to run against them.
4. Attend the Indivisible Guide’s facebook live event tonight (May 8th) to hear their suggestions for what to do during the House recess and beyond to oppose the AHCA.

Cover image by Jeff Eaton from Flickr.