For years, Republicans have opposed the Patient Protection and Affordable Care Act (PPACA). They’ve campaigned on it. They’ve had town halls about it. Some dreamed of the day the PPACA would be repealed and replaced. Many Americans bought into the rhetoric: Republicans could deliver lower health-care prices without all the mandates and taxes. After reviewing the American Health Care Act (AHCA), the complicated reality of honoring a seven-year-old campaign promise is setting in, and it isn’t pretty.

Republicans needed to address a few specific problems with PPACA. First, the 2010 law didn’t do enough to address America’s absolutely absurd spending on health care. America’s per-capita health expenditures grew from $8,404 in 2010 to $9,990 in 2015. That’s a 19 percent increase during the first five years of PPACA, up to 17.8 percent of America’s gross domestic product in 2015.

Plenty of factors contribute to our health spending. We’re not informed enough to make many decisions about our health; many of our insurance models reimburse for doing more rather than securing better outcomes; and we simply pay more for drugs, diagnostic services and hospital stays. For example, the physician and hospital prices for a normal child delivery in the United States are about twice as expensive as in Australia and more than five times as costly as Spain. Both countries have superior infant-mortality rates to the United States. Those were all policy targets Republicans could have addressed.

Another key concern is that PPACA’s very structure hinges on a complicated tangle of taxes and mandates to pay for its subsidies and entice private insurers to offer plans in the law’s exchanges. Too many variables needed to hold true for PPACA to work as efficiently and economically as advertised. Unfortunately, many large health insurers have pulled out of the exchanges due to heavy losses, and premiums have increased significantly. That means a hike in the subsidies necessary to keep plans affordable. Because the PPACA didn’t sufficiently deal with the underlying prices of health care, its price tag would have likely required an economic bailout to survive had Democrats fared better in recent elections. At the very least, PPACA’s structural issues should have lead Republicans toward the keep-it-simple-stupid principle in their replacement.

With seven years to come up with a response, many of us probably hoped that Republicans might have learned from the flaws of the PPACA in crafting a solution. Instead, the recently released draft of the AHCA is a head scratcher.

First, Republicans are making good on the promise to repeal unpopular aspects of the PPACA. The AHCA effectively repeals the “individual mandate” and the “employer mandate” retroactively to Dec. 31, 2015. The legislation also eliminates most of the tax hikes included in PPACA, beginning in 2018. Gone too are the ACA’s premium subsidies in 2020. That much was expected from Republicans even if the effective dates are later than expected.

But the AHCA replaces what it repeals in ways many opponents of the ACA didn’t expect and don’t actually support. In fact, conservative groups like FreedomWorks, Club for Growth and Heritage Action are already panning the AHCA.

Rather than legislation to combat health care prices, Republicans remained on the insurance playing field set by Democrats in the ACA. They replaced subsidies with age-based refundable tax credits to purchase individual insurance. That smells a lot like a subsidy under a different name to many conservatives. On the other end of the political spectrum, Democrats will quickly point out that the new GOP credits are indexed to one percentage point higher than the Consumer Price Index (CPI), rather than being connected to the actual cost increase of individual insurance premiums.

The AHCA draft also has a new individual mandate of sorts in that it requires an insurer to charge a 30 percent premium increase for a year if individuals have gone without insurance for more than 63 days in the year before seeking coverage.

In perhaps the most unexpected move, the AHCA channels Bill Clinton circa 1997 to tackle the larger issue of Medicaid funding by proposing per-capita caps and more Medicaid flexibility for states. Reforming Medicaid is a good idea, but using the savings to pay for another type of entitlement will likely serve as a convenient excuse for many legislators to avoid reforms altogether. State politicians who aren’t keen on being forced to either curtail Medicaid spending or shoulder more of Medicaid’s annual cost hikes will likely be first in line to cry foul on the AHCA’s Medicaid provisions.

The next several weeks will be telling as the committees of jurisdiction in the House mark up the AHCA, and we get a clearer picture of the fiscal impact from the Congressional Budget Office. Unfortunately, the AHCA’s current iteration doesn’t seem to address either health care prices or structural complexity effectively. When voters took to the polls in November, they voted for PPACA repeal, but the AHCA isn’t the replacement they had in mind.

Image by  zimmytws

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