One for All and All for Me

by

Howard Adelman

Unus pro omnibus, omnes pro uno in Latin means “One for all, all for one” in English. It was the brand of the Musketeers and d’Artagnan in Alexandre Dumas’ famous French novel published just before the Swiss Civil War began in 1847. In German, the expression is Einer für alle, alle für einen, in French, un pour tous, tous pour un) and in Italian Uno per tutti, tutti per uno. There is a Romansh version (In per tuts, tuts per in). All four versions were adopted by Switzerland just after the American Civil War ended in the midst of devastating Alpine floods to show how, in a small country, four different ethnic and linguistic groups could serve the whole with a sense of duty and solidarity to keep the country unified in spite of centrifugal forces that almost pulled it apart twenty years earlier. It has since been the slogan of the country.

This is not the slogan governing the recent House of Representatives American Health Care Act (AHCA). The economic analysis of the bill by the Congressional Budget Office (CBO) came out this past Wednesday, 24 May. https://www.scribd.com/document/349349526/eilsnell

Recall that the CBO is an agency of Congress headed by a Republican selected by Republicans that has a stellar reputation for impartiality. Nevertheless, the report is flawed, not because of its results, but because it approaches the health crisis in the U.S. by comparing AHCA to the previous flawed House bill that failed to pass.

That flaw is not fundamental, just inconvenient. I also would have liked the CBO to offer more analysis of the effect of the legislation on the stability of the insurance market, already detrimentally affected by setting aside a single payer system, insisting on state versus federal control which prevents insurers from crossing state borders and allowing some states to permit young people to opt out of insurance without penalty, thereby ensuring both higher premiums and more limited coverage, by lacking a system to shift medical practice from treatment to prevention, and providing no incentives for encouraging medical practice based primarily on care and not primarily, as in some states, on medical entrepreneurship.

Even without these more ambitious concepts, the current instability resulting from both the inability to improve Obamacare, allowing states to undercut the plan, and insurers pulling out of the market in the face of current uncertainty, has meant that, for example, in Missouri, 19,000 were left uninsured when Blue Shield and Blue Cross abandoned Obamacare.

Further, there is a true tragic irony. House Freedom Caucus Chair Mark Meadows (R-NC) was the one that championed state waivers and pushed for the Bill’s passage, but was shocked when he read the CBO. For, while he supported the rights of states to mold the legislation to suit their own constituents, he was brought to tears when he learned that the Bill had not come near to adequately funding high-risk pools. Given his personal family history, he was genuinely upset by the CBO results and vowed changes would have to be made. “In the end, we’ve got to make sure there’s enough funding there to handle preexisting conditions and drive down premiums. And if we can’t do those three things, then we will have failed.”

Too little funding! Inadequate to ensure coverage for preexisting conditions! Failure to drive down premiums! The Bill he eventually pushed was declared by him to have failed.

About 20 million Americans are currently insured under Obamacare. [In discussions of those insured and uninsured, I and the CBO leave out those who have limited insurance policies for dread diseases, policies with limited insurance benefits for specific diseases, insurance for dental care or eye glasses, supplemental insurance, say for single or double occupancy rooms rather than 4-person rooms in hospitals, and indemnity insurance.] Of these, 20 million, 10-12 million are newly insured. So why does the CBO claim that 23 million more Americans would be left uninsured under AHCA in comparison to the 24 million left out in the previously failed Republican legislation? How can 23 to 24 million people be left uninsured if only 20 million are enrolled and, of those, only 10-12 million are newly insured since Obamacare came into existence?

First, the 20 million figure represents those that will be left uninsured in 2021 compared to those currently covered in 2017. In 2018, the figure would be 14 million left uninsured in comparison to Obamacare. Does that mean that everyone of the insured under Obamacare (14 million) would go from being insured to uninsured? If that was the case, how could the numbers of uninsured grow 50% in the next four years?

First, though the projections are of those who would be uninsured, it does not mean that all of them would not have access to some health coverage. An estimated several million would be able to access health care by using tax credits to purchase health insurance, but insurance that would not cover major medical risks. Second, recall that millions of Americans remain uninsured under Obamacare. As estimated by Kaiser Permanente, there were 28.5 million in 2015. In the year before, the number of uninsured in America dropped dramatically by 8.8 million when over 33-37 million Americans were without health insurance. Further recall, that in 2014, the first year that the Affordable Care Act was in full operation the number of uninsured Americans dropped dramatically from 13.3% of the American population to 10.4% of the population.

To answer the question raised above about how, if only 12-14 million had enrolled in Obamacare, 20 million could be left uninsured in 2020, the answer is that there is a difference between the total of those who have access to health care because of government support and the total who have access because they purchased insurance. That is because, in addition to those who purchase insurance, there are those covered by Medicaid who would also be detrimentally affected by the 2017 AHCA.

There are two sources of health coverage: insurance that individuals and families purchase on their own either through the ACA marketplaces or directly from private insurance companies, and those insured under Medicaid. The 2017 AHCA detrimentally affects not only insured receivers of health care, but those who receive benefits from Medicaid. Previous to Obamacare or the Affordable Health Care Act (2013 AHCA), Medicaid overwhelmingly serviced seniors. Of the 16 million Americans under 65 who gained access to health care through the 2013 AHCA, a number, an estimated 4-6 million were enrolled in Medicaid by the end of 2014. That number has grown since. The estimate of 14 million detrimentally affected, to the extent that they would lose access to health care, includes not only those who would be forced out of the insured cluster, but both the under-65 age group and the retiree group that would find themselves without access to health care.

The CBO took all this into account when it projected a loss of insurance for about 14 million this year and by 2020 an additional 6 million who would lose coverage. The stats from 2013 to 2014 when Obamacare was in full operation show the following figures:

1. Uninsured drop from 41.1 to 32.3 million uninsured;
2. Employer insured grew slightly from 168.1 to 168.8 million;
3. Medicaid insured increased from 52 to 58.4 million;
4. Direct-purchase insured increased from 23.7 to 33.9 million;
5. Those previously covered under veteran or medicare programs stayed roughly constant.

The figures to calculate concern, not only those who directly purchased insurance and those enrolled in Medicaid who would be detrimentally affected by the new Act if it ever passed the Senate in some form, but also employer-insured Americans. They would suffer as well. Note that those who work part time or as independents before Obamacare likely lacked any medical insurance; Obamacare’s subsidized options directly benefited this group. Thus, whereas the total number of uninsured dropped 8.8 million by the end of 2014, the number of part-time workers aged 18-64 who were uninsured fell by more than 6 percentage points from 24 to 17.7% and the numbers who were unemployed for virtually the whole year who were uninsured fell from 22.2 to 17.3%. The drop in the fully employed aged 18-65 fell by only 2.7%. Among the overall beneficiaries, those who most benefited were Blacks and Latinos.

Thus, other than ideologues, the dislike of Obamacare came from those insured who resented their insurance rates increasing to pay for the health benefits of minorities and of the part-time and the unemployed. However, the 2017 AHCA would also detrimentally affect even them as legislation removes the obligation of the insurance companies to cover high-cost medical procedures. Those insurance companies could also exclude those with previous conditions. Simply put, in all the categories, the weakest and most vulnerable suffer to ensure premiums are somewhat more stabilized than when more people from minorities, more part-time employed and unemployed were covered.

Nevertheless, the CBO estimates that, on average, under the new legislation, prior to any consideration of tax credits, insurance costs would increase faster than under current law by an average of 20%, though in subsequent years that increase would be somewhat offset by the stability fund. Further, depending on how a state permits insurers to discriminate based on age, older people would face higher premiums and younger people smaller premiums, especially in states which permit premiums to be established on the basis of an individual’s health status. Basic deductions allowed would also affect premiums – the greater the deductible, the smaller the premium. In such states, premiums can be expected to increase, especially for those most in need of that insurance. If mental health care, maternity leave or treatment for substance abuse are not included, this would also reduce premiums while significantly increasing the already terrible stats on health outcomes in the U.S.

Importantly, the cost to government coffers for covering the most vulnerable would be significantly reduced, thus benefiting the bottom-line taxes middle-income and certainly upper-income Americans would pay. “The largest increases in the deficit would come from repealing or modifying tax provisions in the ACA that are not directly related to health insurance coverage — such as repealing a surtax on net investment income, repealing annual fees imposed on health insurers, and reducing the income threshold for determining the tax deduction for medical expenses.” Their insurance is projected to increase or, at best, very modestly decrease directly. The greatest benefit would be the decline in obligatory expenditures of the federal budget. The budget saving of the new Health Care bill would be $119 billion over ten years, less than the previous estimate for the bill that never made it through the House of $150 billion. The lion’s share of those savings under the proposed tax cuts would go to the 1%, but the middle-income earner would see a minor benefit here as well with even the possibility of a slightly lower projected increase in premiums for insurance.

However, since the real extensive savings would result from increasing the deficit considerably because of those tax cuts, and because the economy is unlikely to grow at the rate of an average of 3% per annum projected in the Republican budget, not only will the partially employed, contract workers and the unemployed suffer disproportionately, not only would Blacks and Hispanics suffer disproportionately, but so would the youth of America as burdens are projected forward to pay for benefits today, not only from these cuts in subsidies, but also by reducing the income threshold for tax deductions for medical expenses. To be fair, these negative effects would be partially offset by enhancing the Patient and State Stability Fund put in place to reduce premiums and the benefits accruing to employers who would no longer suffer penalties for not insuring its workforce, a clear benefit to small business owners, but at a cost to their employees.

On the other hand, CBO projects that one-sixth of the American public would live in areas in 2020 in which the insurance market will become even more unstable than it is now as healthy, mostly younger, Americans only purchase insurance for what they need and from insurers which offer policies only for that group based on their low risk as the insurance companies exclude high risk cohorts. “People who are less healthy (including those with pre-existing or newly acquired medical conditions) would ultimately be unable to purchase comprehensive nongroup health insurance at premiums comparable to those under current law, if they could purchase it at all.”

In sum, no health coverage for many more Americans, possibly slightly smaller effective premiums for middle and upper income earners, and savings for small business people. But these last categories would suffer as well if one of the members faces a catastrophic health care costs and if limits are placed on the amount insured or if insurance companies can reject coverage for previous illnesses and disabilities.

I have not attended to the effects and costs in general that poor health services deliver to a large swath of Americans: lower age of average mortality than the rest of the developed world, higher incidents of infant mortality and of women in labour. These cost the American economy.

If partially employed whites in West Virginia and Ohio are detrimentally affected, why do they continue to support Trump? It is clearly not in their self interest. I contend that the issue is identity politics and not self interest. Trump played and continues to play the identity card, as have Republicans in general. The poor whites may be suffering from an opioid crisis, may die earlier and have less access to health services, but they want to be recognized for who they are more than for the benefits they get. In fact, they have tied their identity to a claim that they are self-reliant. Democratic appeals to their self interest largely fall on deaf ears. And that may continue to be the case even when the effects of Republican health care planning, as modified by the Senate, is passed, if a Bill is passed and takes effect.

In Canada, Medicare was fought strenuously, especially by medical associations and the doctors in Saskatchewan who went on strike against what grew to be a central feature of the Canadian identity, especially as doctors found they actually gained from Medicare since they no longer had to worry about the costs and the losses from fee collection problems. Based on those lessons and on the results of the CBO, it should be no surprise that currently in the U.S., virtually every single medical and health professional as well as hospital organization has opposed the Republican plans for health care “reform” – the American Medical Association and the American Hospital Association are but two examples.

The fight boils down to an ideological one between those who believe, at least in dire circumstances such as sickness and injury, we are our brothers’ keeper. Caring for the most vulnerable is best ensured by the state versus reliance primarily upon public charity.

With the help of Alex Zisman