Mar 21, 2017

Freedom Partners Opposes AHCA in its Current Form

Post by Geoff Holtzman

Arlington, VA — The U.S. House of Representatives is expected to vote Thursday on the American Health Care Act (AHCA). Unfortunately, as it is currently written, the bill fails to repeal Obamacare and instead keeps the law’s flawed foundation largely intact. Without significant policy changes that will actually reduce costs and provide the relief that Americans were promised, Freedom Partners cannot support it.

Freedom Partners Vice President of Policy Nathan Nascimento issued the following statement:

“The AHCA in its current form fails to fully repeal Obamacare and would lead to even higher costs and fewer choices for Americans. We want to work with Congress and the White House on finding solutions that reduce costs and increase access to quality care for all Americans, but that can’t happen without first repealing Obamacare – and this bill does not do that. Absent major changes, the AHCA will fail to deliver relief for Americans, and we’ll stand with principled lawmakers who recognize this and vote against it.”

Earlier this year, Freedom Partners released a strategy memo entitled, “Health Care: A Targeted Approach.” The memo put forth a series of targeted health care solutions that lawmakers can begin working on today that will lower costs, increase choice, and improve access to care for millions of people seeking relief. Click here to learn more.

BACKGROUND: Freedom Partners’ Primary Policy Objections to the AHCA

The AHCA Creates a New Entitlement with Refundable Tax Credits: The GOP proposal includes “refundable” tax credits. These tax credits are largely indistinguishable from Obamacare’s tax credits, because both are really taxpayer-funded subsidies. The legislation simply swaps one federal entitlement program for another – and like other entitlement programs, there’s no limit on how much can be spent on it. Taxpayers will pay for as many people who sign up.

The AHCA Preserves Obamacare’s Costly Insurance Regulations and Mandates: One reason insurance premiums have increased so much under Obamacare is because one-size-fits-all regulations mean insurance companies offer plans with benefits that special interests and Washington bureaucrats want, instead of what consumers want. These mandates require insurance policies to carry expensive coverages that people may not need or want. Obamacare required all plans sold to contain these features in order to be compliant with the law. The costly mandates prohibited low-cost plans. The GOP proposal repeals some regulations after a transition period, but others are never addressed. Failure to repeal these mandates will keep health insurance premiums high and will not fulfill the promise of lower health care costs for Americans.

The AHCA Delays Medicaid Expansion Repeal: The GOP proposal would end the Medicaid expansion and replace the entire Medicaid program with a per capita/block grant program – but not until 2020. This rewards governors and state legislators who sought the short-term gain of accepting Medicaid expansion only to saddle future taxpayers with a growing and potentially unsustainable burden. At the same time, this delay punishes the courageous governors and state legislators who took principled stands and did not subject their states to the trap of “free” federal money in the first years of the legislation, only to be left on the hook for substantial added costs in later years when the federal funds end. Further, repealing Medicaid expansion will refocus the program on those who need it most. Medicaid expansion made access to health care more burdensome for those truly in need. The manager’s amendment would remove incentives for states that haven’t yet expanded Medicaid to do so, but that improvement is marginal.

The AHCA Continues Obamacare’s Cadillac Tax: The Republican plan fails to abolish the Cadillac tax, a 40 percent excise tax on select employer-sponsored health care plans. The tax is unpopular and has been postponed by Congress in the past. Instead of abolishing the tax, the GOP plan postpones its implementation until 2026, breaking a Republican promise to repeal all of Obamacare’s harmful taxes.