When the House passed the American Health Care Act (AHCA) there was lots of criticism from Democrats and even some Republicans. The healthcare economists had mixed reviews; some praised it, some didn’t. One of the critics was Avik Roy of The Manhattan Institute, who writes for Forbes.

Roy’s analysis of the AHCA was covered in an earlier post (How Good is the GOP Healthcare Plan?). His criticism was the flat tax credit in this bill rather than one that is means tested. Here is what he said then:

“That approach (flat tax credits) means that millions of low-income Americans in their fifties and sixties will be priced out of the insurance market, while millions of upper-income Americans who don’t need the help will get a big tax credit.”

“By repealing ObamaCare’s Medicaid expansion and replacing it with a flat tax credit that doesn’t provide enough assistance to the working poor, millions with incomes above the poverty line are going to lose their insurance.”

 

A Change of Tune

Now that the Senate has released its version of the bill, known as The Better Care Reconciliation Act of 2017 (BCRA), Roy is singing a different tune. In a post written for Forbes entitled “The New Senate Republican Bill Will Transform American Health Care”, Roy has this assessment:

“The hotly-anticipated Senate Republican health care bill came out on Thursday morning. The airwaves quickly filled up with predictable talking points from both sides. But once the dust settles, it will emerge that the Senate bill will have far-reaching effects on American health care; for the better.”

 

The difference is means testing of the tax credits. He says this solves the problems he described in his earlier criticism and also makes it easier to reform the Medicaid program. He explains:

“Because the Senate bill’s tax credits are robustly means-tested and available to those below the poverty line, the bill is able to repeal ObamaCare’s Medicaid expansion while offering higher-quality coverage to individuals who signed up for Medicaid under the expansion.”

 

Medicaid Reform

Besides lowering the cost of private insurance premiums, especially for low and moderate-income Americans, it makes significant improvements to Medicaid. Roy says this is accomplished in three ways:

• Repeal of ObamaCare’s Medicaid expansion – replacing it with tax credits that allow low-income patients can buy private coverage at an affordable price.
• State flexibility – allows states to check enrollment eligibility more frequently to remove those ineligible. Also encourages innovation in the states to lower costs and improve quality
• Long term per-capita caps tied to inflation – to control the rising costs and make Medicaid fiscally sustainable for years to come.

 

His only real criticism of the Senate bill is that it doesn’t establish a waiting period for those who don’t sign up for insurance during the open enrollment. Lack of this waiting period encourages people to abuse the system by dropping in and out of coverage when they’re sick or healthy. Apparently this issue conflicted with Senate parliamentary rules and is yet to be worked out.

Despite this high praise for the Senate bill from this highly respected healthcare economist, expect Democrats to keep up their demagoguery to defeat the bill. Also, expect the CBO to say at least 18 million fewer Americans will be insured since this is their “baked-in” claim for any bill that repeals the Individual Mandate.

Some Republicans, too, continue to criticize this less-than perfect bill. As I write there are five Republican Senators holding out for improvements. Roy’s response to these Republicans puts this in perspective:

“But any Republican conservative in the Senate who is thinking of voting “no” on this bill: how many times in your life will you have the opportunity to vote for a bill that fundamentally transforms two entitlement programs? How often will you get to vote for a bill that cuts spending by hundreds of billions of dollars? How often will you get a chance to make a difference for millions of your constituents who are struggling under the weight of rising premiums and exploding deductibles?”

 

The time is now for healthcare reform. It’s time to get it done.