The U.S. would have no national health care policy

The sections below explain how millions of Americans (mostly the poorest, oldest, and sickest) would have lost the ability to afford health care if Obamacare's protections are removed.

The Graham-Cassidy amendment went further. It would effectively have eliminated any national health care policy - instead leaving it up to each state to devise its own policy.

The problem is, much less money would have been given to the states than is needed to provide the services and protections currently being provided. If the money is not there, many would be unable to obtain the health care they need. The only other alternative would have been for a state in increase its taxes in order to obtain the needed money.

Obamacare replacement proposals would hurt most Americans

Two observations come to light when analyzing the potential effects of replacing Obamacare with either the House's American Health Care Act (AHCA) or the Senate's Better Care Reconciliation Act (BCRA).

This essentially would transfer several hundred billion dollars over the next 10 years from the poorest Americans to the wealthiest.

The timing of changes could have political ramifications

Some provisions of the American Health Care Act (AHCA) would take effect immediately - such as eliminating the Obamacare mandate. Others would not take effect for another 3 years (2020).

This could play into election cycles. By the 2018 mid-term Congressional elections, people still would be covered with Obamacare's protections. But they would not be required to buy insurance if they chose not to (we've already shown how that would be unsustainable for the long term).

The first serious effects of the changes would not be felt until 2021 - when people's premium assistance does not keep up with increased premium costs and those with the least income would find they cannot be covered by Medicaid. That would be after the 2020 presidential election.

As for the effects this bill might have on the country's economy, that has yet to be studied, because the bill was proposed and scheduled for a vote in the House over a period of just a few weeks. As the CBO analysis states,...

Because of the magnitude of its budgetary effects, this legislation is "major legislation," as defined in the rules of the House of Representatives. Hence, it triggers the requirement that the cost estimate, to the greatest extent practicable, include the budgetary impact of its macroeconomic effects. However, because of the very short time available to prepare this cost estimate, quantifying and incorporating those macroeconomic effects have not been practicable.

Eliminating protections on essential benefits costs consumers

Allowing states to define what essential health benefits they will require coverage for could affect those who receive coverage from their employer - regardless of what state they work in.

Under Obamacare, companies could choose policies that define essential health benefits for any state they choose. That made little practical difference since Obamacare required all states to cover the same minimum benefits.

Under the proposed changes, a state can choose to not require insurance plans to cover maternity care. An employer in any other state would be able to choose that lower standard in deciding what policies to offer. For example, if one state decided to not require that maternity care be covered, no employer anywhere would be required to offer plans that cover maternity care.

As a result, employees on those plans would no longer be protected from lifetime caps and annual caps on how much an insurance company would pay, nor would they be protected by out-of-pocket maximums.

For more, read the Brookings Institution report.

Removing protections is big win for insurance companies

As we previously explained, the AHCA might allow those with pre-existing conditions to pay the same premium as someone who has no current health issues, but their total health care expenses likely would be much higher than they would be under Obamacare.

The MacArthur Amendment allows states to opt out of requiring that protection. To do so, the state would need to establish a high-risk pool. Money in the high-risk pool would be used to pay for the health care of those in the pool.

But where would that money come from?

The AHCA provides $15 billion a year to fund the high-risk pools ($13 billion originally in the bill plus an extra $2 billion added at the last minute to help procure votes from more moderate Republicans).

However, the Center for American Progress (CAP) estimates that high-risk pools would cost $33 billion yearly - leaving them $18 billion short each year.

The shortfall could come from two places. Either individuals in the pool would need to pay much more for their health care (thus effectively losing protections), or the money would need to come from state taxes (so everyone in the state pays).

Who would gain? Healthy individuals would gain some in reduced premiums. But the biggest winners would be insurance companies - who no longer would be required to insure those who would cost them the most.

The Center for American Progress has issued two analyses of how the bill would fall well short of covering the cost of shared risk pools. Click here and here to read them.

To learn more about high-risk pools and why they failed in the past, read this AARP article.