The Republican Plan to Replace Obamacare

This week I had my first glimpse of the long awaited Republican plan to replace Obamacare.  They've been talking about it for a long time and everyone's been waiting for it.  This week someone leaked an early draft and the news media picked it up right away.  All the information I used to write this post was from an NBC story on their web site.  You can read it for yourself by following this link:  

GOP Obamacare Replacement

Before I get too far into this I want you to understand my perspective.  It might help explain why I say the things I'm about to say.  And if you really don't give a crap about my perspective, then you can either move on or continue reading.  There.  You've been warned.

I want to say that I don't think Obamacare is perfect.  In fact, I think there are a lot of problems with it.  But, on the other hand, it's better than what we had before.  The intent of Obamacare is to make sure everyone has better access to health insurance.  It doesn't intend to provide some kind of perfect utopian solution to our healthcare dilemma.  It just tries to offer something better than what we had before.  And that's all.

Realistically, if you want health insurance then it's going to cost you.  You're going to pay for it one way or another.  You're either going to pay for it voluntarily each month or you're going to be forced into it.  America is not a welfare state.  The government doesn't provide everything for us.  There is no provision in the Constitution that guarantees us free healthcare like you see in other countries.  It would be nice if it did, but the reality is that it just doesn't.

One of the provisions of the Affordable Care Act (Obamacare) says that everyone is required to have insurance or face a fine.  The fine comes when you file your income tax return every year.  If you don't have insurance, your tax refund will be reduced.  That's the incentive for us to make sure we're insured.  If you happen to owe some taxes and you didn't have insurance the previous year, then you'll owe even more.  If the IRS owes you money, then your refund will reduced by the amount of the fine.  That's the way it works.

There are benefits to making sure everyone has insurance.  Most hospitals are required by law to provide healthcare to anyone who walks in the door.  This might mean sending them to a different hospital, but in America if you are sick then you will be able to get some kind of treatment for your problem somewhere.  If you can't pay for it, then they have to write it off and it hits them right in the bottom line.  When a hospital writes off an unpaid medical bill it doesn't relieve them from paying for all the supplies and labor that was required to treat you.  They have to make that up somewhere.  That "somewhere" is in the cost your health  insurance company pays for your healthcare.  Uninsured people who need healthcare are one of the things that makes healthcare so expensive today.  It's not the only thing, but it's one of them.

I'll mention Medicaid at this point because it's also discussed in the NBC story I referenced earlier.  Medicaid is intended to provide assistance with healthcare costs for low income Americans.  Being a low income American isn't automatically a bad thing.  It's just a fact of life.  The reality is that some people just don't make as much money as other people.  It doesn't mean they're bad people.  It just means they don't make as much money as some other people.  

Medicaid is supposed to help provide healthcare for low income Americans.  we all pay for it and it's worth it, both from a moral and also from a financial perspective.  From a moral perspective, it's the right thing for a civilized society to do.  No one would argue that an American should die of cancer or diabetes just because his/her passion was cooking in a restaurant or working on cars.  From a financial perspective, someone will have to pay for their healthcare, so it's better for us to pay a little out of each paycheck to fund Medicaid than to pay a lot more for our own healthcare.  Classic social theory stuff. 

All that being said, let's get back to the Republican plan to replace Obamacare.  The Republican plan will favor tax breaks, health savings accounts, eliminates funding for Planned Parenthood, and practically eliminates the requirement for employers with over 50 full time employees to provide access to health insurance.  It doesn't mandate that insurance companies have to accept people with pre-existing conditions.  I'm not sure where to start.

Health insurance premiums are already tax free.  The Republican plan does nothing for us here.  Nothing at all.

Health savings accounts can be a good thing, but not for everyone.  They basically say that any money you earn and deposit in a health savings account is tax free.  When you need healthcare, you pay for it out of that account without having to pay any income tax on it.  That sounds good, but in the end you're still paying for everything yourself.  You have to save money yourself to pay for your healthcare.  If you haven't saved enough money in your HSA, you have to pay the rest out of pocket.  I wrote about this in detail in another blog post and you can read that for yourself if you like, but for me that means that my $25,000 hospital visit two years ago would have taken me 16 years to save for.  If I had been contributing for 16 years I could have paid for it out of my HSA.  And then my balance would have been zero and if I needed another visit it would have taken me another 16 years to save enough money in my HSA to pay for it.  I don't know about you, but I don't schedule emergency room visits ahead of time.  This wouldn't work for me.

Planned Parenthood is another story entirely.  Planned parenthood provides health services to women that they wouldn't be able to afford otherwise.  Republicans keep replaying some video of a Planned Parenthood employee sitting in a restaurant and discussing selling aborted fetuses.  Seriously, how can you think this is an approved Planned Parenthood policy?  Access to basic women's healthcare is an issue that we need to address and the answer isn't to defund the agency that provides healthcare to women who can't afford it on their own. The right answer is to figure out exactly what women need and find the best way to make sure they have it.  Today that way is Planned Parenthood.  This is not a question to be answered by a bunch of men sitting in a legislative chamber in Washington.  This question has to be answered by women and their doctors.  And we can't let our opposition to the idea of abortion supersede everything else.  That would be like cutting off your whole arm if you had a paper cut on your finger.

So far the issue of pre-existing conditions hasn't been addressed by the Republican plan.  Today if you enroll in Obamacare and you have a medical condition like diabetes or multiple sclerosis or even cancer, they have to accept you into the plan.  You are covered.  This is an important benefit that Obamacare provides.  If you have an illness that you've had for a long time, the insurance company has to accept you and they have to cover you.  Without that provision, they could reject you and you would have to pay for it yourself.  Imagine if you had lung cancer and had to change insurance companies and the insurance company rejected you.  You might be liable for hundreds of thousands of dollars for your treatment.  Or worse, you might be denied the treatment you need to survive because you simply don't have enough money to pay for it.

So there you have it.  It will be interesting to see what the Republicans have to offer and whether it favors the average American or the insurance companies.  Hopefully it will be some reasonable compromise that we can all live with.

The one thing I would ask of you is that, if you disagree with the plan for replacing Obamacare, then please call your congressman and tell them so.  And if you agree with it and think it's a good deal for America, please call them and tell them so.  Your participation in the process is what guarantees your representation.  If you don't participate, then you lose your voice in our future.