Saddle up, here we go.
Let’s cut right to it – the AHCA (aka “Trumpcare”) legislation that Paul Ryan and House Republicans passed last week, at its core, trades the lives of Americans for tax cuts to the extremely wealthy.
It’s not a “plan”, it’s not “reform”, it’s a $765 billion tax cut for the 1%, with window dressing to deceive. It is the single largest redistribution of wealth from the poor to the rich in United States history. And if it passes the Senate, hundreds of thousands of people will lose their lives in the years ahead.
But don’t take it from me – take it from the best investor and businessman of all time (and all-around good guy), Warren Buffett, who said at his Berkshire Hathaway meeting that the AHCA amounted to:
“A huge tax cut for guys like me. And when there’s a tax cut, either the deficit goes up or they get the taxes from somebody else.”
Buffett – a megabillionaire – said the AHCA would have resulted in a 17% cut to his 2016 taxes. Buffett, and this chart (#MATH) don’t lie:
In fact, in 2022, the top 0.1 % would get an average tax cut of $207,000.
Let’s dig in to those economics further…
The Economics of the AHCA
On the financial impact, this legislation is a huge net negative for most Americans. The Republican-led Congressional Budget Office has not yet scored this version of the bill, but the less harmful prior version was estimated to have had the following impact:
- 24 million Americans would entirely lose insurance (26 million if you trust the White House AHCA projections). That is more people losing insurance than if there was a full repeal.
- 7 million would lose their employer-sponsored insurance.
- Premiums were expected to rise significantly for most (as much as 760% for low income individuals in their late 50’s and 60’s).
- Deductibles were expected to increase 40%, on average.
- 3 million jobs would be lost.
The passed version is very similar to the prior that I wrote about, which had a mere 17% approval rating (side note: when have you ever seen 83% of Americans agree on anything?). But, somehow, they made the new version even worse to win a 1-vote margin of victory. This version allows states to claim a waiver on guaranteed issue for pre-existing coverage. And, unfortunately, the list of pre-existing conditions is long.
With the waiver, states could push individuals into “high-risk pools”. In the past, state high risk pools had quota-limited enrollment because they were dramatically underfunded, with years-long waiting lists and lifetime insurance spending caps. To symbolically “address” the pre-existing condition problem, Republicans added $8 billion in high-risk pool funding over 5 years ($0 thereafter) as window dressing, but it’s estimated that as many as 129 million Americans have pre-existing conditions, so the funding won’t cover more than a tiny fraction of the need.
Even if high-risk individuals paid an average of $10,000 in premiums per year, the pools would be under-funded by over $200 billion in the next few years, meaning premiums would spike to unsustainable levels. This would bankrupt many, and force tens of millions to drop insurance altogether. Premiums could even reach as high as $25,700 per year for people in high-risk pools, according to a report from AARP. “Access” means nothing if you can’t afford to pay for it. You or I may have “access” to buy a Lamborghini – it doesn’t mean we have the means.
The passed version of the AHCA would also remove the ban on lifetime spending caps (including for those with employer plans(!!), if employers choose to use them), meaning that any spending beyond the caps won’t be covered and those with catastrophic costs could go bankrupt and/or die. This creates job lock for retirees and employees to certain employers, which limits entrepreneurship and damages the economy as a whole. All of which had been solved by the ACA.
This plan also takes us further away from single-payer, which has proven to result in better care and dramatically lower costs for citizens, on a per capita basis (i.e. Australia pays ~$4,400 per person per year versus $9,200 in the U.S. – with better results). Shouldn’t better care and lower costs per person be the key performance metrics to judge our health care system?
In a nutshell, that’s the economics of this plan. It’s not a populist plan for the little guy. It’s an elitist tax cut for the 1%. And it goes in the face of everything Trump campaigned on (“No cuts to Medicaid”, “Better care at a lower price”, “Everyone will be covered”). How else can you describe that other than “bait-and-switch”?
The Ethics of the AHCA
Now that we’ve covered the economics, lets focus on the ethics, because that’s where I find the AHCA to be the most reprehensible.
It has been estimated that 24,000-29,000 people each year would die from coverage loss (with the more generous previous version). So let’s think about this for a second…
Hypothetical: what if ISIS, North Korean missiles, or Mexican cartels killed 29,000 Americans per year? or in just 1 year? Or even one-tenth of that in 1 year (i.e. 9/11)? What would the perceived horror, threat, & reaction from Americans be? How much would we spend to go to war to combat that?
Unfortunately, there’s not enough media resources or consumer attention span to document and reflect on 29,000 separate individual deaths per year due to legislation versus one big catastrophic event. But that doesn’t make those lives any less valuable, the ethics any more justifiable, or the horror any less real.
We spend $600 billion per year to defend our citizens from those kinds of hideous combat attacks. But when it comes to health care, somehow it’s justifiably OK to trade 29,000 American lives for a tax cut of a comparatively minuscule $76.5 billion per year to the top 1%?
Not only is it OK to and voluntarily chosen by the Republican Party, but apparently it is even gleefully celebrated with a victory speech, rock anthems, and Bud Light. Sometimes the biggest threat to the public comes from within our borders in the form of ink on paper from elected officials.
Meanwhile, real people who didn’t deserve this are living in fear about how they are going to suffer. Here’s a small sampling of stories I found on Twitter…
Perhaps Congressional Republicans should be required to meet with each of these people and tell them to their faces why they should be targeted to pay tens of thousands more due to their bad luck or evils from others, face medical bankruptcy, and/or die to fund this tax cut to the 1%.
Then again, if they did, maybe they’d just lie to their faces about protecting them, as Congressman John Faso (NY) did to a young woman fighting a brain tumor, before he voted “yes” for the AHCA.
We are the richest country at the richest time in history, yet we have the most expensive and archaic health care system of any developed country. We are the lone developed country without universal/single-payer – and we pay the highest costs. Not a coincidence. Health care reform should be finding ways to cover more people, not tens of millions less. Yet somehow this race to the bottom is rationalized as a good idea because the richest will get richer. It’s atrociously unethical.
But, don’t despair! There’s still time to fight this. The Senate needs to decide how or if they will alter this tax cut legislation. If you feel the same way as I do about it, you can fight by speaking out, volunteering, protesting, donating, and voting. You can reach your Congressional (House and Senate) members by calling (202) 224-3121. You can find your House member here and Senate member here. Reaching out to both is advised, because if the Senate passes a bill, it will go back to the House. We need to demand legislation that expands coverage, while lowering costs (either improving upon the ACA or single-payer).
We are better than this.