DePauwlitics: Let’s Talk Healthcare Cuts and Credits

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You may have heard that there is a new healthcare proposal to make it’s way through Congress this legislative session. In January of this year, Republicans passed a measure to repeal former President Obama’s Affordable Care Act (ACA), arguably the biggest domestic policy accomplishment of his administration.

Soon after Americans across the country, threatened with the loss of coverage, pressed their representatives as to why there was a repeal without a replacement. But one thing that both parties agree on is the necessity for healthcare reform, a stabilized market, and expanded coverage across America. Thus, the American Health Care Act (AHCA) was born as the Republican replacement. Many of its components come from Congressional Republicans, President Trump’s White House, and even Obama’s Affordable Care Act.

However, this is no simple bill. Many members of Congress are still trying to make sense of it and only this week did the nonpartisan Congressional Budget Office (CBO) release their report on the effects of the proposed bill. While I’m not a healthcare expert, I do think the proposed AHCA will disproportionately affect individuals who need the coverage the most--the elderly and lower income communities. Here’s how:

The nonpartisan CBO projects that by next year, 14 million more people will be uninsured under the new law than under the current law. By 2026, that number jumps to 24 million. Furthermore, by 2026, the number of people covered by Medicaid will decrease by 17 percent, or 14 million people. Medicaid is a social and health care program for people with limited financial resources. It is largely funded by the federal government, but given out by the states. While Obama’s Affordable Care Act expanded funding for the service and broadened the requirements as to who gets Medicaid coverage, the AHCA will drastically cut this funding.

Previously, individuals received a subsidy, or money, from the government to help pay back insurance bills and premiums. This subsidy was based on an individual’s income. Under the American Health Care Act, this money will come in the form of a tax credit determined not by income, but by age. Under the new proposed law, reported by the New York Times, a 21 year old person would actually see a drop in charges to their insurance payments with the new tax credit. Conversely, an 64 year old person with the same income would see an increase in premiums unmatched by the tax credit. While before they were paying the same as the 21 year old, their bill could increase by upwards of 750 percent-- or thousands of dollars.

This is a lot of information. If you’re having trouble understanding the best healthcare options for Americans, you’re not alone; Congress is too. Many people understand the current proposal to not be in final form. Even though Congress is led by the Republican party in both chambers, this will not be as easy to pass. House Republicans have yet to show united support because of factional divisions from within the party. Similarly, some Senate Republicans are concerned what the cuts to Medicaid mean for their individual states. Right now, the bill is being negotiated behind closed doors with Washington’s leaders on both parties.

But here’s what you should understand: the current healthcare bill disproportionately affects lower-income and older individuals that live in your state. The tax credit system benefits a younger class of people and the cuts to Medicaid hurt poor communities, including rural ones. So while it is becoming apparent that President Donald Trump seeks to fulfill many of his campaign promises, no matter the feasibility, he may be proposing health care reform that will hurt the very individuals that delivered his electoral victory.