^ Christopher Mugglebee writes “The Mugglebee Files”
NOTE : This long-read on the now failed AHCA was written the day before the bill was withdrawn. We publish it for its insights and detail and because the issues presented in it, and in the AHCA, remain unresolved and needing resolution somehow, and soon. — the Editors
—- —- —- —-
“Health is the first wealth.
-Ralph Waldo Emerson”
America has always had a complicated relationship with wealth; it aspires to obtain it, and those who have it strive for more, often at the cost of those who have none. Interestingly, the same thing could be said about health.
With the now failed Obamacare repeal and replace plan put forth by Paul Ryan, awkwardly titled “American Health Care Act”, the connection between the two became shockingly clear.
Oddly, the name fits – the American Health Care Act. That’s because it was an act. A bill put forth by a bunch of paid actors, and bad ones at that. Bad because no one bought any of it. Their lines disingenuous, their drama so poorly-acted and the plot so thinly-disguised it had to be laughed out of the theater.. Problem is…it was a heist and a tragedy wrapped into one. Actors delivering lines to an audience that had no idea the stakes are real, that the daggers would have ended up in them, the very people who paid to see the show.
When the ACA originally passed, health care in America was in a bad way; coverage was being denied, people with pre-existing conditions dropped; here were lifetime caps that could essentially bankrupt a person if, say, they got cancer.. The takeaway from that…don’t get cancer.
People unfortunately in that position had to make an impossible choice : take on enormous debt in order to pay for treatments; or foregoing treatment altogether; or bankrupt surviving family. This was common in America.
The GOP, from the start, opposed it because they opposed anything Obama did. It didn’t matter that they privately agreed or understood the need for these changes to the insurance system, they publicly called it “socialism”. I understood the sham of their opposition. I didn’t buy the claim that Obamacare was “a disaster,” and I don’t buy it now. That being said, from the beginning the ACA had problems– primarily due to GOP obstruction — but underlying it was another problem that no one was talking about.
The problems weren’t with the ACA itself. They were with something else entirely.
When politicians use incendiary terms like “horrible and catastrophic”, we know there is an agenda going. One such was that insurance companies were coming between patients and their doctors in a way that seemed completely outrageous. Doctors had to create circumventions of insurance companies just to be able to treat people. Doctors literally couldn’t practice medicine. All I could think was “How in the hell did this happen?”
Many people said it was Obamacare, but the more I looked into things, the more I saw that our health care system was failing — because the insurance companies weren’t following the law. Back when the ACA was being crafted, most people assumed the insurance industry opposed it. Truth was just the opposite : the industry wanted it. After all, millions of new young healthy people signing up for policies they neither needed nor wanted was a giant windfall for the insurance industry. Why look a gift horse in the mouth, right?
Often, politics and big business hedge their bets by playing opposites, so if a change doesn’t work they have an easier time going the other way. In the case of the ACA, the insurance industry was getting rich by a privatized social medicine construct, and millions were signing up. The evidence was clear: the law was working: yet the insurance industry still wasn’t satisfied. Premiums began to rise. And then something curious : insurance companies began pulling out of certain exchanges.
Doctors, too. They resisted signing up for the exchanges. They, after all, had to make a living. They struggled with the insurance companies. Now the GOP, which had wanted to privatize social security (again) took the opportunity to begin scrapping not only the ACA but Medicare and Medicaid, too, even though these programs were widely popular and highly successful as well. Why sc rap them ?
Because there was no other way to give the rich a tax break.
As talk of repealing Obamacare gained momentum because of the Trump candidacy, Speaker Ryan and his team went to work crafting a benefit-the-wealthy plan that looked like a new ACA.
But the question remained : why would the powerful insurance lobby want to repeal something that was successful (in terms of enrolees)? Perhaps because many people, myself included, weren’t really happy with the system; it wasn’t a cinch, and much of what Obama promised was not the case. Premiums increased, benefits absent or obstructed; doctors were not joining the exchanges. And the insurance industry was finding ways to collect the money while reducing coverage.
Even so, the answer wasn’t repeal and replace. That was just a political thing. What they wanted was a full repeal, going back to what they had before, however unacceptable.
I began to piece together why. Why they wanted to scrap it all.
The thing wasn’t failing for the reasons GOP operatives like Ryan said it was. It was failing because the insurance industry was making it fail. And the wealthy were looking for a tax break.
The ACA could have worked, had the insurance industry followed it. Changes like no lifetime caps and no excluding pre-existing conditions were paramount, and most Americans agree these are absolutely needed. Obama made these the central tenets of his healthcare initiative. But, in America, healthcare is a business. And first and foremost a business must make profit for its investors. Who are its investors? The wealthy. There has to be wealth care for there to be health care.
The insurance companies supported the ACA initially because they stood to reap large profits from that untapped demographic : younger, healthier people. Millions and millions of new customers forced to pay into an exchange that paid for all those pre-existing conditions.
But the thing is, America was sicker than it realized.
The Insurance industry soon changed tracks and began to back out, because it realized that.
The name Obamacare was originally used by anti-Obama agendas, but became the accepted name for a frustrated system. The true source of the frustration no one was talking about. Politicians claimed it was failing, but were they calling the insurance companies out? Nope. In order for a progressive move like the ACA to work, the insurance companies had to actually follow the law…and they didn’t.
The insurance companies were the problem, not the act itself. But we weren’t told that. Why? Because helping the people and helping the wealthy are two very different things.
It was always about wealth, not health. Let’s look at how.
According to https://www.google.com/amp/s/www.forbes.com/sites/anthonynitti/2017/03/13/gop-health-care-bill-will-result-in-a-huge-tax-cut-for-the-rich-24-million-without-insurance/amp/:
“While the removal of the individual and employer mandate are likely to benefit many lower and middle-class taxpayers, as noted above, both the net investment income tax and the additional Medicare tax apply only to the richest 2%. Thus, the repeal and replace plan results in a just-under $300 billion tax cut to those high-income taxpayers over the next decade, while simultaneously slashing Medicaid and subsidies for insurance premiums of low-income taxpayers.”
Here we see that The American Health Care Act might not have been about health, actually. More:
“…with the individual mandate no longer in effect, many young, healthy taxpayers will opt to go without insurance, driving up premiums in the short term by as much as 20%. Beyond 2020, however, the CBO predicts that premiums should actually decrease relative to Obamacare estimates, largely owing to a change in the American Health Care Act that allows insurers to offer cheaper plans because they are no longer required to cover at least 60% of certain health care costs.”
The AHCA allowed the insurance industry to raise costs in anticipation of a lowering in 2020, after which there would be a lowering of premiums. That’s good, right? No. When they lower premiums, companies no longer had to cover a minimum of 60 percent. That meant people would get less expensive, shitty coverage. Again. Like they had before the ACA.
And again, it’s always about wealth.
“It should be noted, however, that while the CBO estimates that average premiums will decrease after 2020, the report notes that the premiums for young individuals will be substantially reduced, while the premiums of older people will be substantially increased, as the new bill allows insurers to charge premiums to older applicants that are five times larger than those charged to younger applicants.”
This is truly startling. Here was the opposite of the ACA’s goals. It’s possible to surmise the insurance industry made a startling reversal of policy, no longer targeting the young and healthy but the old and sick. Why? Maybe because it’s more profitable? This was the single most confounding aspect to Ryan’s tax break for the rich.
“Obamacare failed because the penalties for going uncovered are too low when stacked against its skyrocketing premium costs. Next year, the penalty for staying uninsured is $695 per adult, or perhaps 2.5 percent of a family’s taxable household income. That’s far less than many Americans would pay for coverage. Financial incentive: Skip Obamacare.”
This seems to indicate many people decided to pay the IRS instead of the insurance companies. So, what did that mean?
Supply and demand. If it hasn’t tamed costs, does that mean costs are higher than they expected? If so, did the industry panic? Realizing young, healthy people were just paying the penalty, in essence giving the money to the US government instead of the exchanges meant this experiment needed to be scuttled. Remember, they hedged their bet, and now they have a card to play getting them out of this. What else can we discover about this boondoggle?
“Obamacare failed because insurance is based on risk pools — that is, the lucky subsidize the unlucky. The unlucky who have big health problems (and big medical bills) reap much greater benefits than those who remain healthy and out of the doctors’ office. But Obamacare’s rules hamstring insurers. They can’t exclude people for pre-existing conditions, and can’t charge older customers more than three times as much as the young. Those are good goals, but they skew the market in ways Obamacare didn’t figure out how to offset. Result: Young and healthy consumers pay far more in premiums than their claims (probably) would justify in order to subsidize the unexpectedly large influx of older, sicker customers who require expensive care. Too many unlucky people, too few lucky people: That will collapse any insurance scheme.”
Too many unlucky people. Those being the American people.
Any system that weighs people based on luck is not going to work. The previous quote I find the most difficult to accept. I do not believe it was ever about luck. Back to my earlier statement : America is sicker than it thinks, perhaps something that the billion dollar insurance industry found out.
The last ten years have been hard on Americans. The expansive high of the Bush years led to a collapse that Obama inherited. Racism, troublesome law enforcement, and hate unleashed through the rising tide of social media, coupled with media-driven news cycles all generated a partisan divide wider than the Grand Canyon. The erosion of social norms and revisionist history had a devastating effect; it should be no surprise that health is a concern nation-wide. These last years have distorted our collective lives to the degree that facts are now questioned as our current president tweets Obama is a sick (bad) guy. The sick pot is calling the healthy kettle black.
No wonder America is suffering and in need of healthcare. It’s ill, and the insurance industry knows it.
Which is why it is adjusting, perhaps.
“Obamacare failed because too many carriers simply can’t cover expenses, let alone turn a profit, in this rigidly controlled system. Take Blue Cross and Blue Shield of Illinois, the state’s dominant Obamacare insurer. Last year, for every dollar the carrier collected, it spent $1.32 buying care and providing services for customers, according to BCBS President Maurice Smith. No wonder BCBS is proposing rate increases from 23 percent to 45 percent for its individual plans.”
Fortuantely, the American Health Care Act did not happen. Still, the wealth problem remains. Occam’s razor says the simplest explanation tends to be the right one, so let’s apply that.
“Today, the Congressional Budget Office answered those questions, releasing its official scoring of the American Health Care Act, and the results are not pretty. An $883 billion tax cut, $274 billion of it going to the richest 2%. $880 billion stripped from Medicaid. And 24 million Medicaid. And 24 million fewer insured individuals over the next ten years.”
A $274 billion tax break for the wealthiest two percent. That’s all this was. In a list of America’s top 10 most profitable companies, no health care company is listed. The first one, United Health, is 16th. The top ten are Big Oil, Apple/Samsung…and Walmart. While the latter all list profits are down, United Health, the only insurer in the top 50, is actually up by 20%. Apple is the only one up almost 30%, whereas oil is down by as much. This indicates something. The top ten are all big employers, and will take up a large chunk of that $275bil tax cut. Health care providers aren’t really in the top fifty. Had the American Health Care Act passed, they surely would have been.
Health may not be the first wealth in America, because wealth is the first wealth. And the second and the third and on down the line. Health is not. But it’s doing its best to make sure that changes, by making sure it doesn’t have to cover a sick country that is being told to prize wealth over its own health.
— Christopher Mugglebee / The Mugglebee Files at Here and Sphere