THE EXPERT WITNESS: TrumpCare 101 - Read the bill

By John F. Sase, Ph.D.
Gerard J. Senick, senior editor
Julie Gale Sase, copyeditor

“Take your time. Read a contract before you sign it.”
—Advice from an ancient sage

Last month, we focused on the matter of the North American Free-Trade Agreement (NAFTA), an issue that remains close to many of us in Southeast Michigan, both within our cultural hearts and our wallets. This month, we will delve into the repeal and replacement of the Affordable Care Act through the bill that was introduced into Congress last week. We feel that this bill and its repercussions have great relevance both to attorneys and to their loved ones.

Colleagues, students, and friends have asked me (Dr. Sase) as an economist to comment on the bill and other public documents related to the repeal/replacement of our current health-care laws that have come before Congress. My first question to these individuals has become “Have you read these documents in their entirety?” Usually, the answer is a meek “no.” In all fairness, we must note that some of these Federal working papers are challenging to decipher, even for a Ph.D. or a J.D. In this month’s column, we will look at the recent bill proposed to Congress, offering a short summary of it as well as brief opinions and guidance to help the average educated reader wade through this set of multiple documents by him/herself. In this exercise, we will explore Budget Reconciliation Legislative Recommendations Relating to Repeal and Replace of the Patient Protection and Affordable Care Act, a proposal by the Health Care Solutions Group, chaired by Senator Roy Blunt (R-MO). The Grand Old Party has posted this work at www.readthebill.gop.

The GOP repeal-and-replace recommendation for our health care laws is au courant. Many politicians and media talking-heads have waxed poetic, for and against this proposed plan, with varying degrees of knowledge. However, after downloading the official text at https://housegop.leadpages.co/healthcare/, printing a hard copy, and studying the bill in its entirety, I must question how many of them have actually read it, let alone analyzed it.
The formal document is 123 pages in length. The first part of 66 pages contains Subtitle A that addresses Patient Access to Public Health Programs.

This is followed by four one-page proposals (unlettered subtitles). It concludes with a 53-page (unlettered subtitle) document that addresses the Repeal and Replace of Health-Related Tax Policy. With standard 1-and-7/8-inch gutters siding 123 pages of double-spaced text in 14-point font, it does make for a faster read than the original Patient Protection and Affordable Care Act (PPACA), which contains 961 single-spaced pages of text in 10-point font.

The length of the GOP bill works for the proposed legislative changes because much of it constitutes nothing more than detailed line-editing instructions to be applied to the 2010 PPACA (and updates). These instructions also include some additions and subtractions to the current PPACA. It is important to note that the GOP document is not an original work-of-merit. For the most part, this bill  represents a list of changes to be made to the 961-page PPACA as well as to related documents that include the Social Security Act (42 U.S.C.) and sections of the Internal Revenue Code.

Readers are well-advised to have copies of these other cited documents on their desks or computers in order to understand the context and possible effects of the proposed alterations.

In order to illustrate this point, we offer the following example from the first page of the bill:  Changes to be made to section 4002 of the PPACA (42 U.S.C. 300u-11), as amended by section 5009 of the 21st Century Cures Act, reads that section 4002 “is amended—(1) in paragraph (2), by adding “and” at the end; (2) in paragraph (3)—(A) by striking ‘each of fiscal years 2018 and 2019’and inserting ‘fiscal year 2018’; and (B) by striking the semicolon at the end and inserting a period; and (3) by striking paragraphs (4) through (8).” This approach employed on Page One is repeated throughout the document.

Some pages do include significant changes to the existing PPACA. For example, SEC. 103. FEDERAL PAYMENTS TO STATES on Pages Two through Four elaborates in general that no direct spending of Federal Funds may be made available to a State for payments to a prohibited entity. Within this section, “prohibited entity” is defined as a tax-exempt organization that engages primarily in family-planning services and reproductive health and that provides for abortions (with the exception of cases of rape, incest, or certified physical disorder, injury, or illness of the mother, who would be in danger of death without an abortion).

Throughout Pages Five through Nineteen, under Subtitle B—Medicaid Program Enhancement, a discussion of administrative matters ensues with proposed line-item changes to the Social Security Act. This is considered in respect to the repeal of Medicaid Expansion, the elimination of Medicaid Disproportionate-Share Hospital Payments, and the reduction of State Medicaid costs by dis-enrolling high-dollar lottery winners (detailed on Pages Ten through Nineteen). Perhaps we need to explore the possible pandemic of lottery-ticket sales to and winnings by Medicaid recipients. Along with relevant line-editing of the Social Security Act, the text on Pages Twenty-One through Twenty-Five focuses on additional Medicaid provisions. These provisions include Safety Net Funding, an increase to the Federal Medicaid Assistance Percentage, cash incentives to State agencies for increasing the frequency of eligibility redetermination from annual to semi-annual or more frequently, and other policing issues. Little mention is given as to how these goals might be accomplished through practical means or to the cost of doing them.

Per Capita Allotment for Medical Assistance to States is the subject of Subtitle C. Proposals in this section focus upon amendments to Title XIX of the Social Security Act, section 1903 (42 U,S,C, 1396b). The text throughout Pages Twenty-Five to Forty-Five contains the details of the series of relevant procedures, reporting, and administrative duties to which respective State agencies must comply.

Next, Subtitle D addresses Patient Relief and Health Insurance Market Stability in six lines. This part of the document serves to repeal section 1402 of the PPACA. Subtitle D concerns reduced cost-sharing for individuals enrolling in qualified health plans. Following this action, the proposal seeks to amend the Social Security Act by adding a new title:  Title XXII—Patient and State Stability Fund. Throughout the remaining 25 pages of this first part of the bill, the discussion includes the establishment of the program, the use of funds by States, State management and promotion of individual and small-group insurance markets in States, and the provision of payments to health-care providers and the provision of assistance to reduce out-of-pocket costs of enrolled individuals. In general terms, the remainder of this first half of the GOP bill focuses on the transfer of the management and responsibility of affordable health care to the State level.

Next, four one-page Subtitles are included. The first three address issues in respect to the Internal Revenue Code of 1986. These include the repeal of remuneration from certain insurers, the tanning tax (for tanning salons), and the repeal of net-investment income tax. The fourth one-pager focuses on the repeal of certain consumer taxes in respect to sections 9008 (the Prescription-Medicine Tax) and 9010 (the Health-Insurance Tax) of the PPACA.

The final 53-page segment of this opus concerns the Repeal and Replace of Health-Related Tax Policy. The first ten pages address this matter in general terms with specific amendments, mostly to section 36B of the Internal Revenue Code with cited reference to section 1301(a) of the PPACA in the Code. The focus of this subtitle includes the recapture of excess advance payments of premium tax credits along with modification to the credits, the individual health-insurance market, the option to purchase abortion coverage through a separate plan (for which no Federal funds or tax credit is given), and the exclusion of off-exchange coverage in respect to advance payments. On Page Ten, the Internal Revenue Code is amended to reflect the repeal of the advance payment of and the eligibility determination for the Premium Tax Credit.

Commencing on Page Eleven is the disallowance of health-insurance-expense credit for any plan that covers abortions with wording that references the exclusion of health plans that include coverage for abortions. The abortion mandate continues in the small-employer reference through Page Fourteen. Following this section, the discussion of the repeal of the taxes on health insurance, over-the-counter medications, health flexible-spending, and health-reimbursement arrangements as well as other related items begins on Page Fifteen. The item-by-item litany of eight repeals continues through Page Nineteen. After this section, the focus of the remainder of the document turns to matters of definition, eligibility, and compliance in respect to Health Insurance Coverage. The references throughout this section note the amendments to the Internal Revenue Code, as these pages include the tax credits applicable to the model of the Health-Savings Account.

There are occasional references to the PPACA in the remainder of the document. On Page Thirty-Seven, the authors cite adherence to sections 1411 and 1412 of the PPACA in respect to continuance of the established methods and procedures to administer the Advance-Payment Program. The remainder of the document focuses on compliance to the Internal Revenue Code by employers and individuals. The attention to detail is given to small employers.

In conclusion, this proposal being rushed through Congress lacks any mention of the impact and costs involved in moving our Affordable Health Care forward. This new bill appears to be little more than a shack built upon the extensive, balanced, and well-detailed PPACA. In the rush to find a replacement for a plan that took many years to develop, this bill seems to concentrate on a handful of pet issues embraced by a singular constituency rather than one that addresses the needs of the larger population of the country. The PPACA is used extensively as the foundation for a patchwork treatment and other modifications. This document appears to border on plagiarism, as when a student puts his/her name on a paper without properly acknowledging the sources and the work contributed by others. This practice becomes even more apparent when a person or persons cobbles together an extensive appendage that does not fit well on the underlying structure. The tone of the public promotion of this bill, which is touted as “New and Improved,” exacerbates the internal issues of originality and authenticity.

As with many of us, I agree that the PPACA as it stands contains a plethora of problems, such as the failed expectation of universal inclusivity and rising premiums due to the low enrollment of healthy Millennials. Even long and careful development is no promise of perfection. Without the powers to see into the future, we must depend upon experience over time to bring us to corrective changes. Rather than rushing toward oblivion through bluster and braggadocio, measured and patient progress presents a better way by which to solve these problems and to move forward in a unified manner.

One week of investigation is far from sufficient to analyze and report adequately on the probable economic costs and benefits of the bill and its impact upon individuals and families. The Brookings Institution already has estimated that a straight repeal of the PPACA would leave more than 20 million people without health coverage (https://www.brookings.edu/blog/unpacked/2017/03/08/repealing-the-affordable-care-act/). On 7 March 2017, the Institution posted a short YouTube video of their recent findings (https://www.youtube.com/watch?v=4wpHccHawbg). In this video, Senior Fellow Stuart M. Butler explains what a successful replacement for the Affordable Care Act would need to accomplish. First, he states that people who were uninsurable prior to the PPACA must continue to receive affordable coverage. In fact, this coverage must be available to all individuals, regardless of case histories and levels of income. Butler also suggests that a system of subsidies must be instituted and that a stable market of insurers is needed. He warns that any replacement will be difficult to implement because the States need time to experiment and evolve in order to provide adequate returns for every American. A successful system, therefore, must embrace a capability and willingness to evolve and must accept constant change and adaptation.

As this month’s takeaway, we hope that you, our reader, will take the time to read this new bill that has been presented to Congress and to study it carefully. Once you have spent time with it and have come to understand it on your own, you will have formed your own opinion. Based upon your own views, we hope that you will make your preferences known to our Congressional Representatives and Senators. As the American songwriter and performer Patti Smith sings in her song of the same name, “People have the power.”

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Dr. John F. Sase has taught Economics for thirty-six years and has practiced Forensic and Investigative Economics since the early 1990s. He earned a combined Masters in Economics and an MBA at the University of Detroit, and a Ph.D. in Economics at Wayne State University. He is a graduate of the University of Detroit Jesuit High School (www.saseassociates.com).

Gerard J. Senick is a freelance writer, editor, and musician. He earned his degree in English at the University of Detroit and was a Supervisory Editor at Gale Research Company (now Cengage) for over twenty years. Currently, he edits books for publication (www.senick-editing.com).

Julie G. Sase is a copyeditor and parent coach. She earned her degree in English at Marygrove College and her graduate certificate in Parent Coaching from Seattle Pacific University. Ms. Sase coaches clients, writes articles, and copyedits (royaloakparentcoaching.com).