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Ryancare Is Just A Shittier Version Of Obamacare

After having seven years to work on a repeal and replace plan, House Speaker Paul Ryan finally released his bill. For all practical purposes, it is Obamacare, just 35 percent shittier.

This is an impressive feat because, in their pursuit of a lower score from the Congressional Budget Office (CBO), Democrats made the Affordable Care Act as shitty as they could get away with while still calling it “universal” health care.

While many other analyses are focused on how Ryan’s American Health Care Act will make life worse for certain lower income Americans compared to Obama’s Affordable Care Act, pointing out the similarities is more important for understanding its politics.

Under Ryancare, most people will get coverage through their employer, just like Obamacare. In both cases, many of the poor will get coverage through Medicaid. And with both plans, lower/middle income people without employer coverage will be encouraged to use tax credits to help buy regulated private insurance.

Neither Obamacare nor Ryancare has any real price control measures to deal with our dramatically out-of-line health care prices. Both plans leave groups of Americans without insurance they consider affordable. Finally, both are heavily “financed” by a Cadillac tax on expensive employer-provided insurance that is delayed for a decade, resulting in no one expecting the tax to ever go into effect.

There are four major areas where Ryancare does differ from Obamacare, but even here, most of Ryancare’s provisions are only a bad funhouse mirror version of very similar Obamacare policies

1) Medicaid

The most important difference is that Ryancare will change how the Medicaid expansion works and is funded starting in 2020 by freezing enrollment and creating a per capita cap, which places funding limits on each person. Of course, that might never happen. If the GOP doesn’t feel comfortable implementing these changes now, I don’t know how they think it will be easier in the middle of a presidential election.

This Medicaid cut will cause about 4-6 million people to lose Medicaid coverage, according to S&P (which I need to cite since there is no CBO score).

2) Tax credits

The second most important difference is that Ryancare will, in 2020, replace Obamacare’s age/regional based, means-tested, refundable tax credits to buy private insurance with age-based, sort-of-means-tested, refundable tax credits to buy private insurance.

On the plus side, the more modest means-testing design in Ryancare means the tax credits should be slightly easier for the government to administer, will make insurance more affordable for some Americans who currently make too much to qualify for Obamacare credits, and somewhat addresses the issue that means-testing created a big effective marginal tax on lower income people.

The issue is that Ryancare’s “fixes” the problem created by Obamacare only providing lower income Americans enough tax credits to make insurance affordable by basically making tax credits equally insufficient for everyone. And since they aren’t pegged to the cost of health care, the Ryancare tax credits could become less sufficient every year.

3) Individual mandate replaced by late enrollment penalty

Ryancare gets rid of the deeply unpopular individual mandate. In its place, it imposes a late enrollment penalty that’s supposed to nudge people to buy private insurance in a timely manner. If you fail to buy coverage for awhile, you will need to pay 30 percent more when you do buy insurance.

Both systems suffer from the basic flaw that they don’t make insurance truly affordable for everyone but punish you if for some reason you feel you can’t make your premiums. Obamacare has hardship exemptions for the mandate, though.

4) Taxes repealed

Finally, Ryancare repeals almost all of the other Obamacare taxes, meaning it probably won’t pay for itself. Repealing the Obamacare taxes on the rich is just a big giveaway to the rich.

Ryancare is not a change of structure from Obamacare. It’s a change of scope.

The big similarities, and the fact that even the differences are more a matter of size than radical policy redesign, completely undermines the GOP’s ideological and political position. It’s not based around a coherent theory for what is wrong with health care, nor does it offer big new ideas to fix our problems.

By comparison, there are intellectual theories behind how plans like the old Wyden-Bennett bill or Medicare-for-All could improve conditions with big system-wide changes.

The Collins-Cassidy bill at least has a decent story to explain why it might make things better. It replaces Obamacare’s “one size fits all” approach with 50 state experiments to see what works best. Even though it’s a complete repeal without any replacement, it at least has a coherent ideological principle to justify it: the government shouldn’t be so involved.

There is no principle or story behind Ryancare to explain how, even in theory, it could make things better. There is no reason to even hope it could make things cheaper or coverage better. There is no way to look at what is just a shittier version of Obamacare and not conclude it would have an impact similar to Obamacare, just roughly 35% worse for those most impacted.

So now Republicans are left trying to explain why they kept claiming Obamacare was such a terrible existential threat that is completely fixed by cutting rich people’s taxes and making it less generous to some people in need.

As a result, the ideological Republicans aren’t happy, the more pragmatic Republicans who would need to implement it aren’t happy, the non-partisan groups aren’t happy, and even the political hacks don’t know how to sell it. The Republican PR team is honestly left pointing to the fact that Ryancare has fewer pages as proof it is better.

Selling Obamacare was almost impossible for Democrats; selling just a shittier version of Obamacare should be even more difficult for Republicans.

(Note: I feel the need to refer to the plans as “Ryancare” and “Obamacare” because fittingly, AHCA is an extremely similar but slightly shittier acronym than ACA, which would lead to confusion.)

Antony Loewenstein speaks at a rally in New South Wales, Australia on May 18, 2014. (Flickr / Claudio Accheri)
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Jon Walker

Jon Walker

Jonathan Walker grew up in New Jersey. He graduated from Wesleyan University in 2006. He is an expert on politics, health care and drug policy. He is also the author of After Legalization and Cobalt Slave, and a Futurist writer at http://pendinghorizon.com