This is out of sequence for reasons beyond my control.  I apologize to both my readers.

Wanting a swift and emphatic break with President Barack Obama’s administration, the Republicans introduced the American Health Care Act.[1]  One much noticed difference between the Affordable Care Act (ACA) and its proposed replacement (AHCA) came in the financial assistance offered by the government.  The ACA offered open-ended subsidies of premiums linked to income.  The AHCA offered tax-credits of $2,000-$4,000 a year linked to age.  The income ceiling for people to receive the tax credits would be $75,000 for an individual and $150,000 for couples.  The AHCA also would substantially reduce Medicaid spending after 2020.  The ACA barred insurance companies from charging older, sicker clients more than three times as much as they charged younger, healthier clients.  The AHCA would have allowed insurance companies to raise deductibles.  The ACA paid for the new entitlement for poor people by heavily taxing people who make more than $250,000 a year.[2]  To the tune of $600 billion.

Are there flaws in the ACA that would have been changed by the AHCA?  Well, premiums began to rise sharply in the last year of the Obama administration, while some major insurance companies fled the markets.  Rising premiums would mean rising subsidies to freight the budget.  Shifting from subsidies to fixed sums could help contain this problem.  Then, the AHCA allowed insurance companies to charge older, sicker clients up to five times as much as they charged younger, healthier clients.  This more closely resembles the real cost to insurance companies.

Is the cure worse than the disease?  The media were full of adverse results.  Millions could be tossed off Medicaid; diluting or removing some of the services deemed “essential” by the ACA could harm a lot of vulnerable people; and the out-of-pocket costs could go through the roof, leaving millions no choice but to do without insurance at all.

You don’t have to take the Mainstream Media’s (MSM) word for it.[3]  The Congressional Budget Office (CBO) projected that by 2026, premiums would fall by 10 percent.  The budget deficit would be reduced by $337 billion over a decade.  Ending the mandate would allow 14 million unwillingly-insured people to escape the clutches of the ACA.  After the limits on Medicaid spending cut in during 2020, another ten million would eventually drift—or be pushed–off the system.  Allowing insurance companies to charge older, sicker clients more would lead to those clients paying “substantially more” for health care.

The AHCA brought Republican factionalism into high relief.  The 20 members of the conservative House “Freedom Caucus” opposed the bill because it didn’t go far enough in liquidating the ACA.  A bunch of moderate Republican Senators opposed the bill because it went too far in liquidating the ACA.  Their differences appeared unlikely to be composed.  Then, Donald Trump won the nomination as spokesman for many discontented lower income voters.  These are just the people projected as the losers from the AHCA.  His support for the bill puzzled.

[1] “Ryancare: Who wins, who loses,” The Week, 24 March 2017, p. 16.

[2] This reality makes a mockery of the Democratic argument that the mandate is necessary because younger, healthier people have to be included in the “insurance market” so that their premiums can off-set the high costs of older, sicker Americans.  That is the same as arguing that low income, little property people have to subsidize higher income, more property people.  The reality looks like a few rich people have to subsidize many low income people.  The “$660 billion tax-cut” for the wealthy which the NYT decried is the flip side of a $600 billion tax increase imposed by the ACA.  That’s fine as social policy, but it should surprise no one that rich people fought back.

[3] “CBO report roils Ryancare debate,” The Week, 24 March 2017, p. 4.