Doctors from Indiana

Reflections on the American Health Care Act of 2017

by Dr. Magiera | May 23, 2017

The AHCA of 2017 (The Repeal/Replacement bill proposed by Speaker Paul Ryan in March, 2017) is based on several false assumptions.  The first of which is that only reconciliation format can be used to achieve the goals of medical care reform. The “repeal” of Obamacare and the “replacement” should be brought out in parallel, and it is up to Republican leadership to see that both bills pass by their respective parliamentary means simultaneously. The fact that Leadership is unwilling to consider this format promotes the idea that they never intend for there to be a “Phase 2” or “Phase 3”. Voters are already catching on to this ploy. 

Second, the writers of the AHCA are working under the false assumption that insurance coverage is necessary and sufficient for the provision of medical care to take place. Nothing could be further from the truth. Reports exist that claim that the AHCA was drafted in secret with the aid of experts from the insurance industry as the only stakeholders present. This is an example of “regulatory capture” in its most severe form, and, again, voters are seeing right through this deception.

Third, the AHCA perpetuates the requirement of a mandate for high deductible, comprehensive, individual insurance policies as the only approved means of coverage for those not already covered. Perhaps this legislation should be renamed the “Insurance Industry Bail Out Act of 2017”. Many millions of citizens could be covered by the development and promotion of Association Health Plans and Health Sharing Arrangements and the like. These are group plans, so reliance on the individual insurance market as the only vehicle for coverage will not be needed. As group plans, the issue of guaranteed coverage for preexisting conditions is largely settled. These entities, and other items such as extensive HSA expansion, tort reform, custom insurance plans, could be dealt with in the companion non-reconciliation bill. State run high risk pools need to be promoted.

Fourth, the AHCA makes another false assumption that the only way for medical care to be provided is to develop a costly and liberty devastating entitlement program to dole out money to the people. This is simply Obamacare redistribution philosophy with a new coat of paint. Or, put a different way, simply a different shade of lipstick on a pig. What is needed is only tax fairness for individuals and corporation, and tax credits are not the ideal way to achieve this goal. Tax credits are a slippery slope. What is next? Transportation credits? Food credits? Communication, housing credits? Some of these are already an unfortunate reality.

The AHCA totally ignores the concept of attempting to lower the cost of medical care, but opts for enshrining high cost mandated coverage, community-rating schemes, and guaranteed issue clauses. True casualty insurance is pure statistics, and any deviation from those actuarial principles only raises cost.

Another false assumption promoted by the AHCA is that Federal Government charity in the form of Medicaid and Medicare is the only way to provide medical care for our vulnerable citizens. Medicaid should be transitioned entirely to the individual states, which is the only level of government with some remaining semblance of accountability to the voters. Medicare reform is a complex subject, which is dealt with in a later reference. 

Medicare, and the alphabet soup of central planning bills conceived to prop up and add to a failing system, need to all be reconsidered and reformed. Historians can comment on whether Medicare was a noble idea gone bad, or simply LBJ’s 1965 version of Obamacare. It is a fact that LBJ cancelled all senior’s private medical insurance to force enrollment into the central planning scheme. This Federal coercion tactic was simply repeated by Obama in 2010. Most practicing physicians can attest to the fact that the only effect of Federal Government programs has been to make care for all patients, not just seniors, more costly, less efficient, less available, and, therefore, less effective. Medicare needs to be reformed, as documented in the cited AAPS White Paper, to make it optional on a per service basis. In common language, Medicare needs to be “de-fanged”.  If you like your Medicare, you can keep it, but it cannot be the 800 pound gorilla in the room any longer. It must compete with all other insurance plans without Federal Government coercion.

The guiding principles of medical care reform should be the mantra: “Cash, Catastrophic Insurance, and Charity”. Lower cost of medical care can go a long way to obviate the need for expensive insurance plans and subsidies. The AHCA does not address cost to a sufficient extent.

The interested reader is referred to two works. The first is a small book, “Common Sense Medicine”, by Jeff Danby. The other is a reference article, “White Paper on Repeal/Replacement of the Affordable Care Act” published by the Association of American Physicians and Surgeons. It can be found through their web page, www.AAPSonline.org

In summary, the American people deserve better medical care than that provided through the AHCA. Congress needs to go back to the drawing board to develop a thoughtful, transparent, fully debated and vetted plan. Some would argue that the best “replacement” for Obamacare would be “freedom”, and not more central planning, with its intended and unintended adverse consequences.

Christopher J. Magiera, MD
Warsaw, IN
April, 2017

The opinions expressed in this blog are solely those of the authors, who, unless otherwise stated, are not officers of or speaking on behalf of any organization referenced herein.