American Health Care Act v. Affordable Care Act: Contrasting Views of Responsibility for Health.
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The American Health Care Act (AHCA) passed by the House of Representatives on May 4 and the Affordable Care Act (ACA or Obamacare) reflect starkly divergent views of the role of government and the rights and obligations of Americans. These differences make compromise on health policy nearly impossible. As Senators consider what to do with the AHCA, they will be deciding between personal responsibility and social solidarity in health care.
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In contrast, the goals of Obamacare opponents are to limit federal revenues and expenditures, reduce deficit spending, restrict federal regulation of private markets, and return more sovereignty to the states. Their original health policy objective was to repeal Obamacare, period. Faced with demands for some replacement, however, Republicans patched the AHCA together to gain support from members whose constituents depend on Obamacare. The AHCA that passed the House on May 4 favors “actuarial fairness,” in which individuals pay according to their personal health risk profiles, but allows those who cannot afford private insurance to qualify for some government assistance.
The AHCA goes a long way toward achieving Republican goals (different provisions take effect in 2017, 2018, and 2020). First, it reduces federal revenues by eliminating the taxes imposed by the ACA. Second, it decreases the federal deficit somewhat by reducing federal spending on health insurance and Medicaid. Importantly, the deficit reduction paves the way for new tax cuts in the next federal budget. Finally, the AHCA limits federal regulation, freeing states to exercise more regulatory authority, and places greater personal responsibility on individuals for their health and the cost of their care.
The AHCA retains the provisions in the bill that did not come to a vote (explained in an earlier post and Tim Jost’s Health Affairs blog). These include ending the tax penalties on individuals who do not have coverage and employers who do not offer adequate health plans to employees, as well as all the taxes that help fund the subsidies. Federal financing for Medicaid is ratcheted down through block grants or per capita payments, so that sooner or later states will have to cut benefits or beneficiaries. Governor Baker estimates that Massachusetts could lose at least $1 billion. The CBO analysis for the first AHCA estimated that about 24 million people would lose their private or Medicaid coverage by 2026. The CBO is likely to increase the number of uninsured when it analyzes this new AHCA version for Senate consideration.
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The May 4 AHCA looks a lot like the pre-ACA status quo. Public health, medical, and patient organizations, as well as women’s groups and Democrats, strongly opposed the AHCA and now urge the Senate to kill the bill. The AHCA may encourage some premium price relief to young and healthy consumers, but it would take health insurance away from millions of Americans in order to give the richest Americans a huge tax cut.
On the White House lawn after the May 4 vote, Vice President Michael Pence said that the AHCA gives Americans the health care they deserve. We now know what that means.
Wendy K. Mariner is the Edward R. Utley Professor, Health Law, Policy & Management.