Senate Health Care Act Simplified

The health care debacle is the most confusing of the current abundance of political issues. It involves many more factors than can be covered in a blog post, but I will narrow them down to what I consider the three most contentious. If these three aspects of the bill could be resolved, I think it could pass. Health care is a fifth of the economy and greatly impacts us all personally. It behooves us to understand as much as possible about it.

The American Health Care Act, or AHCA, that barely passed the House is being re-drafted in the Senate as the Better Care Reconciliation Act, or BCRA. Here are the simplified summations of three main issues over which Congress is split.

Medicaid. This is the most elusive of the issues. Making health care insurance affordable to almost every American supposedly takes a lot of government subsidy. The BCRA draft would make huge cuts in Medicaid while reducing the number of people eligible for it. These cuts would help offset the costs of health insurance including premium supplements. Democrats and several Republicans complain that the poor and elderly will suffer from the Medicaid reductions and that Medicaid reform should not be part of BCRA. Proponents argue that most poor and elderly should be able to afford the supplemented policies and be freed from Medicaid, and that each state should decide how to best distribute reduced Medicaid.

Insurance Company Supplements. The draft bill takes the position that insurance companies will have to be subsidized substantially by the government in order to provide needed coverage at an affordable price for almost all Americans. This is a left-over concept from Obamacare that even many Republicans believe is necessary. Democrats and some Republicans are adamant that the insurance companies could still make adequate profits supplying needed coverage with reduced or no supplements.

Preexisting Conditions. BCRA ensues coverage for people with health problems already diagnosed. This is the biggest complaint about the plan from insurance companies. Under this concept, people can elect to not carry insurance and plan to purchase it only if they develop a major illness. Insurance companies refer to this as adverse selection, or the “death spiral,” and argue that the way insurance works is for healthier people’s premiums to offset the cost of care for the unhealthy. Otherwise, the companies say, coverage would be too expensive. Insurance not covering preexisting conditions is incentive for the healthier people to be insured and avoid the risk. All Democrats and most Republicans favor coverage of preexisting conditions, higher premiums notwithstanding, but some Republicans want more incentives for the young and healthy to be insured.

These three hot issues have one thing in common: significant government subsidies. The BCRA draft bill would continue to substantially supplement insurance premiums for much of the nation as well as profits of insurance companies. This violates conservative ideologies of less government spending, debt reduction, and government staying out of the free market. But, all Democrats and some Republicans believe considerable supplementation is necessary. That is the crux of the standoff.

Obamacare has failed miserably for many reasons, but the House ACHA and the Senate BCRA sure look a lot like their failed predecessor. Is that what it takes to have affordable health care for almost all Americans? Or, can the Republicans find enough common ground that requires much less government spending and involvement? If they can’t, we are headed for single-payer health care–everyone in America relying on the equivalent of Medicare and Medicaid with the government in control of one-fifth of our economy. Your thoughts?



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