Six Ways Trumpcare Makes Healthcare Worse (and One Way to Make It Better)

The Affordable Care Act never really solved the healthcare crisis. It treated healthcare as a commodity allocated through market forces rather than as a public good and failed to address the profiteering at the core of our healthcare system, forcing it to use a series of confusing and convoluted mechanisms to expand heath insurance coverage and regulate health insurance providers.

The most unpopular of these provisions was the "individual mandate"--the requirement that everyone who wasn't covered by a qualified employment-based plan or eligible for a public healthcare program had to purchase private health insurance coverage. This was the tradeoff to the insurance industry in exchange for the prohibition of insurance denials based on preexisting conditions. When people saw what was on offer, many of the healthy ones chose to pay the penalty rather than sign up for an expensive plan with high deductibles and narrow networks.

"Americans want to fight for something more than the preservation of the individual mandate and the right to buy lousy insurance. A single payer Medicare for All plan would cover everyone at a price we can afford with no financial barriers to care and is supported by a majority of all Americans."

The Republicans took advantage of the confusion and ambivalent public support to wage an all out assault on "Obamacare." During last year's campaign, Donald Trump declared that the ACA was a "horrible failure" and promised to immediately repeal it and replace it with a "fantastic new plan" with "health insurance for everybody."

On March 6, the Republicans finally released their "fantastic new plan." Instead of providing "health insurance for everybody," it takes all of the weaknesses of the the ACA and magnifies them while undermining essential public insurance programs and providing huge tax breaks to the rich and the healthcare industrial complex. Here are six of the very worst features of the Republican healthcare proposal*:

1. Death panels for the poor. Effective in 2020, the plan would eliminate expanded Medicaid for the working poor who earn up to 133% of the federal poverty level. The federal government would no longer set minimum standards for coverage, leaving it up to each state to determine how much coverage each recipient gets. Worse, it would turn Medicaid into a block grant program, seriously underfunding this essential safety net program by freezing funding levels, not taking into account medical inflation or the rise in demand for Medicaid during economic downturns. In addition, it eliminates income-based subsidies to purchase private health insurance and replaces them with a flat rate tax credit based on age, radically reducing premium assistance for older and poorer Americans. Many of the 20 million people who gained some form of coverage under the ACA would lose it under Trumpcare.

2. Death spiral for employment-based insurance. The requirement that most employers provide a minimal level of health insurance to their workers or pay a penalty would be eliminated as would the small business tax credit which provided some assistance to small businesses that provided health insurance for their employees. The proposed flat rate tax credit, available only to those without employment-based insurance, will provide an additional incentive for employers to eliminate all health coverage. This will put union employers at a huge competitive disadvantage. The Cadillac Tax would be deferred until 2025 and will mainly affect decent union-negotiated health benefits.

3. Medicare under the gun. The proposal to eliminate the .9% additional Medicare contribution paid by high income taxpayers will drain the Medicare Trust Fund and serve as rationale to turn it into a voucher program. Older Americans who depend on Medicaid for long term care and other important services will be among the most adversely affected by Medicaid cuts and those who purchase private insurance will face major increases as the current 3 to 1 ratio limiting insurance premiums paid by older Americans as compared to younger ones would increase to 5 to 1.

4. Women's and LGBT healthcare targeted. The proposal would defund Planned Parenthood, the largest provider of women's healthcare in the country and prohibits the use of the flat rate tax credit to purchase insurance plans that include abortion coverage. The elimination of minimum coverage standards would adversely affect healthcare services like birth and delivery as well as services utilized by the LGBT community.

5. Private insurance will get even junkier. The plan would repeal the minimal actuarial standards under the ACA, further reducing the quality of coverage and increasing deductibles and co-pays. It replaces the individual mandate with a 30% monthly surcharge on health insurance bills for 12 months if an individual misses two or more payments but does nothing to prohibit insurers from changing coverage or networks. This will trap people in inferior healthcare plans and the reduced subsidies under the flat tax credit system will compel them to purchase junk insurance.

6. The rich get a big tax cut. The .9% Medicare tax and 3.8% investment tax for high income taxpayers would be repealed. Taxes on big pharma, health insurers and medical device manufacturers would be eliminated. Health insurers would be allowed tax deductions on executive compensation in excess of $500,000 per year. New rules for health savings accounts will provide tax shelters for the rich and allow them to spend it on boutique care. The flat rate tax credits will benefit younger and richer American. But great care has been taken to ensure that lottery winners will never receive any subsidies or assistance. Because that's the biggest cause of high healthcare costs, right?

What happens next? This plan faces significant opposition not only from the tens of millions of Americans whose benefits are in jeopardy, but also from conservative Republicans who feel it doesn't do enough to destroy publicly supported healthcare and from influential groups of healthcare providers and hospital administrators. In addition, an impartial Congressional Budget Office analysis will likely show that it would generate massive budget deficits. Nonetheless, if the Congressional leadership and Trump administration remain united, it could quickly pass both Houses and be signed by the president. Because they can use a parliamentary procedure know as "budget reconciliation" the Democrats will be unable to filibuster it in the Senate. By mid-April, we could be living in the new world of Trumpcare.

"Congress needs to be held accountable for conspiring behind closed doors to deprive millions of Americans of access to healthcare and undermining decent working class health plans while providing massive tax cuts to the rich."

Fight for what we want. These attacks will provoke massive resistance from the American people. Congress needs to be held accountable for conspiring behind closed doors to deprive millions of Americans of access to healthcare and undermining decent working class health plans while providing massive tax cuts to the rich.

But Americans want to fight for something more than the preservation of the individual mandate and the right to buy lousy insurance. A single payer Medicare for All plan would cover everyone at a price we can afford with no financial barriers to care and is supported by a majority of all Americans.

After the passage of the ACA, the Labor Campaign's position was that the best way to move forward was by "acknowledging the weaknesses in the ACA while defending its gains and moving to establish a single payer Medicare for All system that would make healthcare a right for everyone in America."

That is why we helped to launch the Campaign for Guaranteed Healthcare after the last election. Our mission is to promote a vision of healthcare justice based on what Americans really want--Medicare for All--while standing in solidarity with everyone everywhere who is denied access to healthcare. We will call on Congress to withdraw this wretched proposal and promote an escalating series of national actions to mobilize the American people to fight for the healthcare they deserve.

We need your help. Write your Congress member today. And prepare for the fight of your life.

*Summaries of the Republican proposal are available here.