(AP Photo/Evan Vucci)
BY DANTE DALLAVELLE | MARCH 24, 2017
“I’ve been dreaming of this since I’ve been...drinking out of kegs.” This statement was brought to you by House Speaker Paul Ryan at a National Review conference. The reverie Mr. Ryan has been musing since his youthful fraternity days at Miami University has been to dismantle healthcare for millions of those who rely on programs such as Medicaid, Medicare, and now it’s recent expansion under the Affordable Care Act.
But it seems that Mr. Ryan isn’t the only dreamer. Under the new Trump regime the GOP may well come closer to realizing this morbid dream.
A particularly scary campaign promise from Mr. Trump was to completely repeal the ACA. Funny coming from a man who said, “I believe in universal healthcare,” on Larry King Live in 1999. So what would a complete repeal of the ACA look like? And what would its replacement imply?
Let’s start local. A report by Raymond Castro of New Jersey Policy Perspective has found that 1.1 million NJ residents would lose benefits from the ACA’s repeal. An estimated $4.2 billion in federal funding would be lost each year, with seniors and the poorest among us feeling the loss most severely.
In Essex County alone, 16,100 seniors and disabled persons would lose drug coverage from a $20 million cut to Medicare. The Urban Institute found that ACA repeal in NJ would increase the number of people without insurance by 124%, with 799,000 people losing coverage. Josh Bivens of the Economic Policy Institute has expanded on the effects of this loss. Greater access to healthcare has subsidized working and poor families, providing a boon to the real economy by increasing the amount of money available for consumption of goods and services, and hence increased investment, employment, and production in a circular flow. Discontinuing this program potentially eliminates an estimated 1.2 million jobs- NJ experiencing about 61,544 of that total.
But, don’t fret, there’s good news! The only caveat is you have to be rich.
The Center for Budget and Policy Priorities reveals that the top 400 highest-income taxpayers, or those with average incomes more than $300 million, would receive annual tax cuts averaging $7 million according to analyzed IRS data. This is possible through the elimination of two Medicare taxes: the Hospital Insurance tax and the tax on unearned income. This cut comes out to $2.8 billion a year for these extremely successful families- roughly the equivalent of the amount of premium tax credits lost by 813,000 people in the 20 smallest states and Washington D.C. In NJ, 250 millionaires would see federal taxes reduced by an average of $57,000 a year- $14 million total.
It’s important to remember that these cuts are independent of the wider GOP tax “reform” to be considered this year. I’m positive we’ll see some more “fiscal responsibility” down the pike.
One of the recurrent arguments Republicans used to deride the ACA was the individual mandate that fined those who did not sign up for coverage, 2.5% of household income to be exact. Yet, hypocrisy again emerges: under Trumpcare insurers can charge 30% higher premiums for a year to those with a lapse of coverage over 63 days. This will effectively deter many from seeking coverage, making access to the market impossible.
The proposed bill also freezes funding to states for payments to so-called “prohibited-entities,” an indirect term for facilities that provide abortions. Most disastrously, this will affect federal dollars to Planned Parenthood, where abortions, unless prompted by rape, incest, or life-threatening circumstances to the mother, are not covered by federal funds. Planned Parenthood provides an essential function and wide-array of services of which abortion accounts for only 3%.
Probably one of the most disgusting features of the GOP’s bill is the now unlimited tax deduction for insurance companies. This provision repeals the $500,000 limit on deductions an insurance provider could claim for “compensation attributable to services performed by an applicable individual.” Decoded, this means insurance companies can now claim ALL of their executives’ pay as part of their business expenses. For Aetna, our fourth-largest insurer, that means $17.3 million is now eligible for deduction, since CEO Mark Bertolini took home that same amount last year. Cigna’s chief exec, David Cordani, took in a mere $13 million, but after a few more tax cuts and hiking insurance premiums, I’m sure he’ll be able to rival Mr. Bertolini soon.
So what should we make of Paul Ryan’s dream? Well, some say dreams are a reflection of reality. The reality is Mr. Ryan took in massive amounts of money from Pfizer, the pharmaceutical giant that stands to make a windfall from higher drug prices under this new administration’s plans. The truth is harsh: Ryan’s dream is actually a nightmare.