May 31, 2017 by

While the C.B.O. was overly optimistic in 2010 about Obamacare, there’s a strong case that it is being overly pessimistic about the new House bill, the American Health Care Act.

In earlier reports, the C.B.O. expressed its view that around two-thirds of the people who would no longer have insurance under the House bill would voluntarily choose not to buy it, because the bill repeals Obamacare’s individual mandate. Under the A.H.C.A., there would no longer be a fine for staying out of the health insurance market.

Insurers don’t believe that the individual mandate is having anywhere near the effect that the C.B.O. assigns to it. There’s another, more basic point: If Americans have to be forced to buy A.C.A.-based insurance, that means Americans don’t think that the insurance Obamacare is offering them is a good value on its own merits.

But there are real problems with the House G.O.P. bill, problems that Senate Republicans must fix.

Contrary to recent headlines, the biggest problem with the A.H.C.A. — one that the C.B.O. highlighted — is not how the bill deals with the sick. While that part of the bill needs to be fixed, it represents a smaller problem.

Indeed, the biggest problem with the Republican bill — by far — is that it fails people who can’t afford health insurance, regardless of their pre-existing health status.

House Speaker Paul Ryan insisted that the A.H.C.A. contain a federally defined, one-size-fits-all tax credit that provides a nearly uniform level of assistance regardless of need.

Whether you’re ill or in good health, the tax credit remains the same. If you live in a high-cost area or a low-cost area, the tax credit remains the same. If you and your spouse make $150,000 a year, you get the same amount of assistance as people barely reaching the poverty line.

Mr. Ryan’s insistence on uniformity means that the A.H.C.A. doesn’t provide enough financial aid to people who most need the help: the near-elderly and the working poor. That feature of the bill would price millions out of the health insurance market.

The Republican bill is supposed to “repeal and replace.” But for older individuals newly enrolled in Medicaid because of the A.C.A., the House bill’s replacement is virtually useless.

Republicans routinely ask the poor to work harder to lift themselves out of poverty. But under the A.H.C.A., those who work longer hours or earn a raise or take a second job to cross the poverty line will be slapped with a gigantic health insurance tab. For those in their 60s, the cost of crossing the poverty line could exceed $10,000 a year.

This is terrible policy. But the Senate has the ability to fix it. As the president tweeted on Sunday, the solution is to “add more dollars” to the bill to support the working poor, while eliminating subsidies for high earners.

Hidden within the House bill is the kernel of a solution. Section 202 of the A.H.C.A. contains a transitional schedule of tax credits for the years 2018 and 2019 that represents a hybrid between Obamacare and the Paul Ryan approach. It adjusts the government’s level of premium assistance by age, like the Ryan plan, while also capping any individual’s exposure to high premiums, like Obamacare.

If the Senate were simply to remove the House bill’s uniform tax credit and continue the hybrid model past 2019 through 2020 and beyond, the bill would most likely get a better coverage score from the C.B.O. The Senate would be able to direct more financial assistance to those who need it, whether because of old age, ill health or low income. Indeed, the Senate could tweak the exact formulas for age and income adjustment, to maximize the number of people with health insurance in the most cost-effective way.

By doing so, the Senate might actually make the individual health insurance market better, by reopening its doors to the young and the healthy. Over time, we might find that more people, not fewer, have gained coverage under such a reform.

It would be a success that would belong not to the Republicans alone but also to the Democrats who in 2010 forced Republicans to come to the table with their own ideas. And maybe — just maybe — after eight years of partisan wrangling, we’d be able to find common ground on health care once again.

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