Democratic Socialists of America’s National Political Committee’s Statement and Fact Sheet on TrumpCare, the House Republican Plan to “Repeal and Replace” the Affordable Care Act
March 15, 2017
For democratic socialists, the most reprehensible aspect of the House Reconciliation Budget Bill to “Repeal and Replace” the Affordable Care Act is that it will gut Medicaid coverage and severely weaken Medicare’s viability as a single-payer system for the elderly and disabled. The bill does so in order to provide a major tax cut for the wealthy, equal to $650 billion over ten years. The bill would lead over 24 million individuals to lose health insurance coverage (according to the nonpartisan Congressional Budget Office or CBO). The bill attacks the single-payer aspects of the U.S. health system (Medicaid and Medicare) in which the government as the sole insurer has the bargaining potential to curtail healthcare costs forced on us by private hospitals and pharmaceutical companies.
At a time when we should fight for Medicare for All, TrumpCare instead takes us backwards.
Here’s what DSA members need to know about the Republican plan so they can tell their Congresspersons and Senators to reject whatever form the plan ultimately takes. The most effective form of pressure is through organized visits to their home offices or, at a minimum, personalized letters of protest to your representative and Senators (see action suggestions below).
- The Republican bill by 2020 will end the ACA’s expansion of Medicaid to close to 14 million individuals from working families that earn between $22,000 and $34,000 a year, an expansion paid for almost exclusively by federal funds for the 31 states that accepted the funding. (Nineteen Republican-governed states kept over 8 million individuals from receiving the Medicaid expansion.) Cynically timed to be implemented only after the 2020 presidential election, the Republican plan would turn Medicaid’s guarantee of coverage to nearly 70 million individuals from an individual entitlement to a less generously funded federal “block grant” or “per capita” allotment that Republicans claim would provide “flexibility for the states.” Such flexibility will allow states to reduce benefits and remove people from Medicaid.
The Medicare trust fund will be drained of income by ending the ACA’s surtax on the wealthy.
Repealing the extra taxes on individuals and large corporations in the ACA will hasten the depletion of the Medicare trust fund by four years. Republicans will use the depletion of the trust fund as a justification for privatizing Medicare. The Republican repeal of the ACA’s tax increases would give a $50,000 tax cut to families earning a million dollars a year and a tax cut of $195,000 to families in the top 0.1 percent. Over 10 years, this would mean a loss of $650 billion in revenues to the Medicare trust fund. In addition, the bill eliminates the ACA’s cap at $500,000 on insurance company CEO’s ability to deduct “expenses” from their taxes. This lifting of the expenses cap could yield a $400 million tax break for just a few score insurance company CEOs over the next decade.
- The Republican bill’s tax credits nowhere near match the ACA’s insurance subsidies, and many of the ten million individuals on the ACA exchanges will lose coverage. The Republican tax credits would start at $2,000 a year for a young person and rise to $4,000 for those in their 50s and 60s. These credits will not rise with the cost of insurance (the ACA subsidies do), and everyone, regardless of income (up to $75K for individuals and $150K for families), receives the same amount of tax credit. The ACA’s much more sizable subsidies covered almost the entire premium costs for families earning the median family income of $52,000 or below and limited health care insurance costs to 8.5% of family total income. The end to these subsidies in favor of tax credits will cost 12 million people health insurance coverage, according to the CBO.
- The Republican bill does away with the individual mandate; doing so means the market for individual coverage will likely collapse. The GOP plan allows for younger, healthy individuals to opt out of the insurance market. The plan does keep the ban on insurers’ rejecting people for pre-existing conditions. But the uninsured, when they choose to sign up after suffering a serious health care setback, will only pay a 30 percent penalty on their insurance for just the first year (with the penalty going to the insurance company and not the government!). Thus, many younger individuals will take the risk and not pay for coverage. In addition, the Republican bill allows insurers to charge older individuals five times the insurance premiums of younger individuals versus the ACA’s three times limit.
- Planned Parenthood will be barred from receiving Medicaid reimbursements for a year and then will not be eligible for Medicaid funding if they perform abortions. This will severely limit low and moderate income women’s access to reproductive services.
DSA recognizes the weaknesses of the ACA and has consistently campaigned for a single-payer Medicare for All health care system. The ACA’s subsidies were not generous enough to enable moderate income individuals to avoid plans with excessively high deductibles, thus failing to guarantee equal quality health care provision.
By keeping the private insurance system in place, the ACA prevented a public insurer from bargaining strenuously with the private hospital and pharmaceutical industry to control costs. These problems would have been lessened if a public option had allowed individuals to use their subsidies to join Medicare.
DSA believes that the only realistic way to achieve equitable and affordable universal health care in this country would be to adopt a single-payer “Medicare for All” plan, similar to the successful, lower cost programs in Canada, France and Taiwan. DSA chapters in many states are organizing now in favor of state-level single payer programs.
But in the near term, DSA will join the broad multiracial coalitions fighting Republican efforts to “repeal and replace” the Affordable Care Act. “Repeal and Replace” would not only deny health provision to millions; it would also gut our single-payer Medicaid and Medicare systems.
To hold your local elected officials responsible and educate your neighbors through radio calls, letters to the editor, opinion editorials and door knocking, here is the 450-page Democratic staff report from House Energy, Commerce/Oversight committees, which starting on page 20 describes the impact of the ACA Repeal by state, broken down by congressional district.
You can also find out how many people in your Congressional district have insurance through the ACA.
And, most importantly, you can find how to contact your member of Congress and Senators and also the addresses of their DC and district offices (from their personal websites) by entering your full address on GovTrack.
The best way to make your collective voices heard is to arrange a delegation to visit your House member’s and Senators’ district offices and/or to hold a protest outside for which you work diligently to get media coverage.