New American Health Care Act is snake oil

Reports of the Affordable Care Act’s death are greatly exaggerated. Republicans giddily celebrating the first step in the passage of their replacement plan Thursday didn’t seem to realize this. In their excitement and self-congratulation, they resembled a cocky football team reveling in the locker room — at halftime.

This new version of the American Health Care Act must still pass the Senate. That will be difficult, because Republican senators from both wings of the party have problems with it, and every tweak to satisfy one of those groups will anger the other. But the biggest problem with all the cheering is not that “repeal and replace” is not a done deal. It’s that the GOP plan is not a good deal, and what was being so callously celebrated will cost tens of millions of people their coverage.

With a few changes, this bill is essentially the one that died in the House in March. If the legislation becomes law, it would have terrible impacts. The big winners would be the wealthy. They would get huge tax cuts with the elimination both of a Medicare surcharge — hastening the bankruptcy of Medicare — and of a Medicaid tax on investment income in Obamacare.

The most hurt would be 14 million people who would lose Medicaid over a decade, thanks to an $880 billion cut, and another 10 million who would lose coverage as subsidies change and insurers are allowed to increase rates for older customers and sicker ones.

And all of the spending cuts are intended to pave the way for far larger tax breaks for the wealthy via the tax reform plan that is President Donald Trump’s most urgent priority — and which has to be at least partially funded to quiet deficit hawks in the GOP.

Cutting $880 billion from Medicaid won’t make health care needs magically disappear. As Mount Sinai Health System chief executive Kenneth Davis said in a television interview Thursday, “These 24 million people who lose coverage are still going to get sick. They are still going to come to hospitals. We are still going to be required, legally and morally, to treat them.” And, Davis added, the new plan does not restore payments to hospitals to care for the uninsured; those payments were cut under Obamacare because uninsured people got coverage. Treating those patients without compensation will devastate hospitals on Long Island, where medical care is central to communities and economies. So will a provision in the bill that says New York can no longer collect a share of Medicaid funding from its counties, but does not require counties to cut taxes to return the savings to residents. These provisions mean taxpayers could pay twice while many who need care aren’t treated.

Republicans cheering the plan say insurance will be more affordable as companies design flexible policies and customers have more choice. But policies can only get cheaper if they cover less. And customers who check, say, “pregnancy coverage” will pay a fortune on the quite reasonable assumption they are planning to have a baby.

Republicans are often right when they point out Obamacare’s shortcomings, like too few insurers on the exchanges in some states. That absolutely ought to be addressed. But snatching coverage from 24 million of our nation’s most vulnerable people to give as much as $1 trillion back to its wealthiest ones doesn’t fix that. — The editorial board