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OOPS: Paul Ryan Accidentally Exposed The Ugly Truth About GOP’s Obamacare “Replacement” Plan

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Paul Ryan just handed Democrats a perfect talking point after he told Bloomberg TV that if Republicans repeal the Affordable Care Act, they won’t reimplement Obamacare’s popular requirement that children can stay on their parents’ health insurance plans until they’re 26.

House Budget Chairman Paul Ryan (R-WI) admitted on Friday that Republicans would not be able to preserve the most popular elements of Obamacare if they repeal the law as a whole. Ryan’s comments come as House Republicans plan to unveil a replacement bill that would supposedly allow young adults to remain on their parents’ health care plans and provide some level of protection for individuals with pre-existing conditions.

But Ryan’s statement earlier today reveals that Republicans have no intentions of keeping these provisions in place.

“If you look at these kinds of reforms, where they’ve been tried before — say the state of Kentucky, for example — you basically make it impossible to underwrite insurance,” Ryan told Bloomberg’s Al Hunt when asked if Republicans would maintain the pre-existing conditions regulations, dependent coverage extension, and other rate requirements. “You dramatically crank up the cost. And you make it hard for people to get affordable health care,” Ryan insisted.

People who follow health care reform closely will correctly note that there’s nothing new here. But for those who don’t, Ryan’s focus on underwriting, not an allusion to so-called “young invincibles” is the key tell. Because underwriting is the main mechanism insurers used to practice price and coverage discrimination against people with pre-existing conditions.

Before the ACA, most states didn’t guarantee coverage to the ill, or prohibit price discrimination against them. Ryan’s correct that guaranteeing coverage and prohibiting price discrimination is a recipe for much higher premiums, but only because he omits the individual mandate, which ensures that state risk pools will be actuarially balanced. Leave out the mandate, and the insurance industry will likely end up existing to sell very costly health plans to sick people.

But Obamacare doesn’t leave out the mandate. And thus, the law can guarantee insurance to everyone without requiring anyone to disclose private details of their health histories to an insurance company, and hold premiums down simultaneously. Anyone who’s signed up for pre-ACA insurance and for ACA insurance can attest to the fact that the elimination of intrusive underwriting forms is a great advancement. All you have to disclose now is your age and tobacco usage.

But Paul Ryan wants to bring back underwriting. Because Republicans really don’t agree that insurers should be prohibited from discriminating against the ill. He and other Republicans will vaguely claim to support setting up state-based high-risk pools for people with pre-existing conditions. Coverage ghettos of a sort for the ill. That would be better than nothing if they were genuinely committed to financing them. But financing them would cost hundreds of billions of dollars a decade, and the one time House Republican leaders tried to come up with a tiny fraction of that cost for Obamacare’s transitional high-risk pools, conservatives rebelled and the legislation failed.

In 2009, Ryan offered a joint alternative with Sen. Tom Coburn (R-OK), which would have taxed the full value of employer health benefits and provided refundable tax credits to help families and individuals purchase employer or nongroup coverage. Economists had predicted that equalizing the tax treatment of health care benefits could discourage businesses from offering insurance and lead at least 20 million Americans to lose their employer coverage .

Earlier this week, Paul Ryan unveiled his plan to slash $5 trillion in projected spending over the next decade, with nearly $3 trillion coming from repealing the Affordable Care Act and dismantling (or in his words, “revamping”) the Medicaid program. Ryan’s “budget forecast” also includes over $700 billion in cuts to Medicare. His plan calls for privatizing Medicare by changing it from an entitlement program into a voucher-style program, which most economists and health policy experts agree would be disastrous. Medicare premiums would become so expensive that millions of seniors would likely be forced to switch into private plans, which are far too costly for most seniors to afford. According to an earlier Congressional Budget Office (CBO) analysis of Medicare premium support systems, plans such as Ryan’s would increase traditional Medicare premiums by a staggering 50 percent.

Low-income seniors would be particularly hurt by the Ryan approach to Medicare since it would also raise the Medicare eligibility threshold. Since Ryan’s plan also dismantles Obamacare, including the health law’s Medicaid expansion, this would be a major blow to the poor and elderly who are just on the cusp of Medicaid eligibility. These people would be unlikely to qualify for Medicaid absent the ACA’s expansion and many of them would be forced to continue working simply for the sake of retaining their employer-sponsored coverage, a phenomenon known as “job lock.” Seniors who aren’t “lucky” enough to receive employer coverage would have to try their luck in an individual market absent Obamacare’s consumer protections and industry reforms, meaning they may be charged exorbitant rates for having poor health or denied health insurance altogether.

Ryan’s attack on Medicare contradict his previous claims about supporting the program and also breaks a pledge House Republicans made last year promising that current 55-year-olds would be able to stay on traditional Medicare.

As we learned today, Republicans are prepared to break many more promises if they get the opportunity — so let’s make sure they don’t. (This is your reminder to VOTE in this year’s elections!)

 

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