To Understand What Obamacare Replacement Would Do, Follow The Money

You’ve heard all about pre-existing conditions, and allowing young adults to stay on their parents’ health insurance policies. But if you want to understand what Republican plans to replace the Affordable Care Act would mean for the country, and perhaps for you individually, pay close attention to the money.

Thanks to the Affordable Care Act, the federal government now spends tens of billions of dollars each year providing financial assistance to people who buy insurance through or one of the exchanges (like Covered California) that some states run on their own. The financial assistance takes two forms ― tax credits that discount premiums, and direct subsidies that reduce out-of-pocket costs.

Most of the Republican schemes under consideration, including a working draft of House legislation that Politico obtained last week, envision the federal government continuing to provide assistance to people who buy coverage on their own. But the assistance would take a different form ― with a new formula for the tax credits, and no special assistance for out-of-pocket costs.

The result would be some fairly dramatic shifts in who gets insurance, how much they pay for it, and, eventually, what kind of insurance they have. This isn’t accidental. The decision to restructure financial assistance for insurance flows directly from the very different way Republicans and Democrats think about health care.

Basically, Democrats believe there should be a right to decent, affordable insurance. They wrote the Affordable Care Act with that principle in mind. Democrats didn’t achieve their goal ― millions of Americans remain uninsured, while millions more with coverage still face high costs. But something like 20 million people now have comprehensive policies they didn’t have before. Overall, financial security and access to health care have improved.

Republicans take a different view. They are willing to give people a tax break to defray health insurance costs, and some Republicans are even willing to extend assistance to lower-income people who don’t make enough money to owe income taxes. But Republicans reject the idea of government guaranteeing coverage, and their proposals to replace “Obamacare” wouldn’t even attempt to provide such a guarantee.

It’s a big reason why the mainstream Republican plans would likely result in more uninsured, weaker coverage, or some combination of the two.

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