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Posts Tagged ‘Affordable Care Act’

GOP Health Care Reforms would Affect Jobs, Too

February 10th, 2014

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Lost in the back-and-forth over the most recent CBO report on the Affordable Care Act (ACA) is a simple fact that any expansion of health care coverage for Americans will inevitably have an impact on America’s working habits. It is no less true of GOP proposals than Obamacare.

To make coverage more affordable, any proposal must provide some sort of subsidy. For example, the recent Republican proposal from Sens. Tom Coburn (R-OK), Richard Burr (R-NC), and Orrin Hatch (R-UT) includes a tax credit for lower income workers. The act of giving someone financial assistance for health care will naturally reduce the need to work somewhat.

Rep. Paul Ryan (R-WI) thinks this creates a poverty trap. While Ryan neglects the fact that millions of Americans are bankrupted every year due to medical bills, he instead focuses on the ACA’s subsidies to buy coverage through the federal and state marketplaces. These subsidies decline as workers earn more money, which means that workers have to work a little harder to keep another dollar in take-home pay. So yes, some people will choose to work less to keep their subsidy. But does that make the ACA a poverty trap? Of course not. We have dozens of social insurance programs ranging from food stamps to the Earned Income Tax Credit, and yet we remain the world’s greatest economy.

The alternative to phasing out benefits by income is to provide the same benefit to rich and poor alike, as many European nations do. But that requires higher tax rates or cuts in government services, which, in turn, leads to greater burdens on everyone.

Here is how CBO describes this problem in their most recent report:

CBO’s estimate that the ACA will reduce employment reflects some of the inherent trade-offs involved in designing such legislation. Subsidies that help lower- income people purchase an expensive product like health insurance must be relatively large to encourage a significant proportion of eligible people to enroll. If those subsidies are phased out with rising income in order to limit their total costs, the phaseout effectively raises people’s marginal tax rates (the tax rates applying to their last dollar of income), thus discouraging work. In addition, if the subsidies are financed at least in part by higher taxes, those taxes will further discourage work or create other economic distortions, depending on how the taxes are designed. Alternatively, if subsidies are not phased out or eliminated with rising income, then the increase in taxes required to finance the subsidies would be much larger. 

This is nothing new. CBO had previously estimated that the ACA would have some impact on jobs. What’s new is that the CBO has refined his estimate and made it more precise based on the latest research.

Some conservative commentators like Avik Roy have acknowledged that GOP plans will also affect working habits due to income-based subsidies. But conservatives persist in the belief that GOP alternatives are morally superior even though their actual solutions are just different choices about the amount of the subsidies and the degree of security offered to American workers.

Economics is called the dismal science because it shows the downside to any choice. But there’s nothing dismal about having security and stability in your health care. As Jason Furman, Chairman of the Council of Economic Advisors at the White House explains, the ACA provides many economic benefits. Today, under Obamacare, millions of Americans no longer have to worry about getting coverage for a pre-existing condition.  They don’t have to stay in a job that they don’t like because of their health insurance. And they don’t have to worry about losing their health care coverage if they lose their job. The GOP needs to make it clear whether they disagree with the goals of Obamacare or the means.

2014: Another Election About Obamacare

December 23rd, 2013

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Here we go again.

2014 will be the third election in a row in which Obamacare is the central issue. The Affordable Care Act, which President Barack Obama signed into law in March 2010, contributed to a fierce voter backlash against Democrats in November 2010. After the Supreme Court upheld the law in June 2012, the issue seemed to be settled by Obama’s re-election that November.

But no.

The botched Obamacare rollout this year has again thrust the issue to the top of the political agenda. Republicans are counting on opposition to Obamacare to propel them to a majority in the Senate next year. A conservative group is already running an ad attacking Senator Jeanne Shaheen (D-N.H.) for supporting Obamacare: “Next November, if you like your senator, you can keep her. If you don’t, you know what to do.”

2013 came to a close with two big political stories. The government shutdown in October was immensely damaging to Republicans. So damaging that House Republicans defied their conservative base and voted for a compromise budget deal last week. Speaker John Boehner (R-Ohio) attacked the Tea Party, accusing them of pushing congressional Republicans “into this fight to defund Obamacare and shut down the government.” A fight Boehner said all along was unwinnable.

The message was, “No more shutdowns.” Republicans didn’t want to step on the second big political story, one immensely damaging to Democrats: the rollout of Obamacare.

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GOP on Obamacare: Divide and Conquer

December 2nd, 2013

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“Remember the strategy for stopping Obamacare we laid out to you back in July,” Speaker John Boehner (R-Oh.) told the House Republican conference last week. “Targeted legislative strikes aimed at shattering the legislative coalition the president has used to force his law on the nation.”

Thirty-nine House Democrats – one in five — voted for the measure. Democratic leaders breathed a cautious sigh of relief. Earlier last week, they feared that 100 or more anxious Democrats might defect. President Barack Obama’s “fix” for the Affordable Care Act, announced on Thursday, held back what might have been a tidal wave of defections.

Republicans want the old Democratic Party back.

That was the deeply divided party that fought over everything — wars, civil rights, spending, taxes. What happened during Obama’s first two years was something of a miracle. The Democratic Party held its majority together. They governed. We experienced something that is routine in a parliamentary system but rare in the United States — party government.

Democrats held similar majorities in Congress during President Bill Clinton’s first two years, 1993-94. Back then, however, the party could not hold together to pass healthcare reform.

By the time Obama took office 15 years later, however, everything had changed. In 2010, Democrats passed the Affordable Care Act on a strictly partisan vote. Not a single Republican in the House or Senate voted for it.

Republicans are determined to kill it. They can’t do that as long as Obama is in the White House. So their new strategy is to make the law unworkable.

That was what the House vote was all about on Friday. Representative Henry Waxman (D-Calif.) called it “another vote to repeal the Affordable Care Act” — something House Republicans have already voted to do 46 times.

What held Democrats together in 2010 — unlike 1994 — was indignation. The Tea Party had taken control of the GOP and driven it to extremes. The last straw came in September 2009, when Representative Joe Wilson (R-S.C.) shouted “You lie!” at the president while he was addressing a joint session of Congress.

In politics as in physics, for every action there is an equal and opposite reaction. In 2010, Republican contempt produced Democratic solidarity.

If Democrats are becoming the nation’s new majority party — as last year’s election suggested they are — Republicans want them to be a divided and ineffective majority.

Last week, Republicans managed to peel off more than three dozen House Democrats. What split them off was terror. Most of those Democrats represent congressional districts where Republicans pose a real threat in next year’s midterm. They are terrified that they will have to defend Obama’s pledge that Americans who like their insurance policies will be able to keep them.

If the House bill isn’t going anywhere, where’s the threat to Obamacare coming from? From the one defection that matters: Obama himself. He, too, is threatened. Not by Republicans — Obama never has to face the voters again — but by the prospect of congressional Democrats abandoning him. That’s why he had to reverse course and offer the “fix.” It’s supposed to give Democrats political cover.

Congressional Democrats don’t seem especially happy with the president’s fix. They are trying to put together their own legislative remedy. Senator Mary Landrieu (D-La.) is proposing a bill that would allow people to keep their old health insurance plans — not for one year as Obama has proposed, but indefinitely. Several other Democratic senators have signed on, including some, like Landrieu, who face difficult re-election prospects next year.

The threat to Obamacare is clear. Allowing people to keep cut-rate, shoddy policies that do not meet the standards of the Affordable Care Act will create two separate risk pools. A lot of young, healthy Americans will stay with their old, cheap policies, while older and sicker people, desperate for coverage, will enroll in Obamacare.

That will cause insurance premiums to skyrocket next year. “Cancellation today, sticker shock tomorrow,” Representative Fred Upton (R-Mich.), chief sponsor of the House Republican bill, predicted.

Obama is trying to limit the risk by allowing people to keep their old policies for one more year. The president’s expectation is that the old plans will simply die out and everyone will end up in Obamacare. But the old plans won’t die if people are allowed to keep them or if companies are allowed to keep selling them.

Angry liberals see what’s going on — and are furious. They are furious with the president for going wobbly. And with Republicans for trying to kill Obamacare piece by piece.

Liberals “don’t want to see this law eviscerated by death by a thousand cuts,” the executive director of MoveOn.org Civic Action told Politico. “The answer is not to undo Obamacare or to undo major provisions of it like allowing those junk plans to continue.”

But that is precisely the game plan Boehner described to his party. So far, everything is going according to plan.

This piece was originally published via Reuters.

Shutdown: A fight with no room for compromise

October 2nd, 2013

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To end the government shutdown, all Speaker John Boehner (R-Ohio) needs to do is let the House of Representatives vote on a budget. It would pass within 30 minutes. Virtually all 200 House Democrats would vote to keep the government open, as would as many as 50 Republicans. An easy majority.

But no. Boehner and other Republican leaders refuse to do that because they are in thrall to Tea Party conservatives.

Hard-line conservatives number about 50 out of 232 House Republicans. But those conservatives are threatening to lead an insurrection against party leaders if they dare to allow a vote. Other Republican members are terrified that they will face a tough primary challenge from the right if they don’t go along with the Tea Party.

So what have we got? Minority government. It’s outrageous when you think about it.

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Next Steps: Health Care Cost Savings and Coverage for the Poor

June 28th, 2012

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The Supreme Court ruling on health care re-affirms the President’s goal of stable and secure coverage for the middle class and the nation. It is time for the Republicans to drop their fight against the law and join forces with Democrats against a common enemy: rising health care costs.  Both parties should take full advantage of the key role that states play in health care, an important topic the Supreme Court also ruled on today.

Today’s ruling affects the expansion of health care coverage to the poor under Medicaid. As a quick refresher: the Affordable Care Act required states to expand coverage to all the poor under Medicaid. Today, one-third of the poor have no coverage under Medicaid, through a job, or any other source.

The Supreme Court affirmed the federal funding for that coverage, but said states should be free to choose whether to accept it for expanding Medicaid. From the start of the expansion in 2014 through 2016, federal funding covers 100 percent of the costs of expanding Medicaid, but after that, the states will start splitting the cost with the feds. The state’s costs are capped at 10% of the total, far less than their typical share, which averages 32% across the states.

What does this mean?

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