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Paul Ryan’s anti-Obamacare plan would screw the sick and poor, critics say

Ryan released the plan, called "A Better Way," on Wednesday, to repeal the Affordable Care Act and replace it with what he says are the good parts of Obamacare, but critics say looks can be deceiving.

by Sydney Lupkin
Jun 23 2016, 8:48pm

This story is part of a partnership between MedPage Today and VICE News.

House of Representatives Speaker Paul Ryan unveiled his plan to replace Obamacare this week, and it's already unpopular with consumer and health advocacy groups, who say it will likely cut coverage and protections for the sick and working poor.

Ryan released the plan, called "A Better Way," on Wednesday, to repeal the Affordable Care Act and replace it with what he says are the good parts of Obamacare, but critics say looks can be deceiving.

"The Ryan plan, from what I've seen, doubles down on the private insurance model in the name of providing choice, but it does nothing in terms of guaranteeing universal healthcare for us that progressive Democrats have offered," said Vijay Das, a policy advocate at Public Citizen, a nonprofit public advocacy group. "It has these kind of jujitsu effects, of maintaining things people like in obamacare, for instance not banning participants for having a preexisting condition and people staying on their parents' plan until 26."

But he said in reality, the plan is "much more of a step backwards," damaging public health overall.

For instance, although the Ryan plan wouldn't ban patients with preexisting conditions, it would put them in a "high-risk pool" with other sick patients, a proposition which Das and others have said has been shown to not work. They said implementing a change like this would keep costs low for healthy people and send costs skyrocketing for people who are sick.

"Protections that now exist would be very much jeopardized," said Ron Pollack, executive director of Families USA, a nonprofit patient advocacy group. "They would be enormously worse, and one would see that very quickly if Speaker Ryan included dollar figures in his proposal, which of course he has not done."

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Pollack said the fact that Ryan excluded dollar figures from his plan will make it impossible for the Congressional Budget Office and other analysts to see how it would really play out. And it likely masks how much patients stand to lose.

The House committees are expected to flesh out Ryan's plan and add more detail, according to an aide in Ryan's office, who pointed out that the Baucus paper, which preceded Obamacare, did not include dollar figures either. The aide stressed that Ryan's plan would provide coverage to every American and provide $25 billion in federal resources to make sure the coverage is effective.

Ryan's plan would also provide federal block grants to states toward healthcare for the poor, which are problematic because states would receive a predetermined dollar amount that could run out if too many people qualify for Medicare or an emergency like Zika virus uses up more healthcare dollars than expected. If states can't make up the difference, people could be left without coverage or care.

"Even if people are eligible try to get enrolled, they're out in the cold because the state only has a finite pot of money," Pollack said.

Ryan would also replace Obamacare's subsidies for health insurance, which are on a sliding scale based on income level, with refundable tax credits. This is a problem because people paying for healthcare in 2016 would have to wait until April 2017 to actually receive that credit.

"Some people don't have the money to spend out of pocket and hope at some point later on that some will be paid back in a tax credit," Pollack said. "The subsidies provide an immediate reduction to insurance premiums at the time you have to pay them."

Last summer, the Supreme Court upheld the part of the law that includes the subsidies.

People with Obamacare subsidies have trouble paying their out-of-pocket costs, the Ryan aide, who requested anonymity, said. The aide added that the tax credits under the Ryan plan would be increased based on age because as people get older, they need more health care.

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Although the Ryan plan does away with certain standards driving monthly payments up, allowing plans with low premiums will mean patients actually have very little coverage and will face huge out-of-pocket costs, experts say.

"The concept of affordable healthcare will be thrown out window," Das said. "At the end of the day, [they are] sort of duplicitous in that they allow insurance companies to provide so-called services when they're really just potentially going to gouge working sick people that make more than Medicaid."

The American Association for Justice, a nonpartisan advocacy and lobbying group for plaintiffs' lawyers, has also come out against Ryan's health care plan, saying it was "largely picked from the recycle bin," and likely won't advance. The group's CEO Linda Lipsen said the plan would take away patients' legal rights if they are harmed.

"It's no wonder that similar schemes that would reduce accountability faced bipartisan opposition from lawmakers earlier this year," she said. "Congress should work on protecting patients and consumers, not taking away their healthcare and their legal rights."

As of late April 2016, more Americans disapproved of Obamacare than approved of it, according to the Pew Research Center. Fifty-four percent of those surveyed disapproved and 44 percent approved.

An estimated 20 million people gained coverage under the Affordable Care Act, and 72 million have coverage through Medicaid, according to Families USA.

The national health insurance company trade group, America's Health Insurance Plans, issued a statement to VICE News about Ryan's plan, but did not take a side for or against it.

"We stand ready to work with both parties on market-based solutions that improve access and affordability for consumers," said Marilyn Tavenner, the group's president and CEO.

Under Ryan's plan, insurance companies would emerge the winners, while consumers and hospitals would be the losers, Pollack said.

"By and large, this is going to be harmful to the American consumer, especially those who live off moderate wages," he said. "It will be harmful to state governments because state governments will receive less money from the federal government. And it will be harmful for hospitals because more people will wind up being uninsured and those hospitals continue to have to provide emergency room care when people come to the ER but the uninsured probably won't have to pay for it."

Follow Sydney Lupkin on Twitter: @slupkin