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Trump and Republicans to try to repeal the Affordable Care Act, privatize Medicare

Commentary by Masao Suzuki
By Masao Suzuki |
December 29, 2016
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One of the first things that Donald Trump said that he would do as president is repeal the Affordable Care Act (ACA) also known as Obamacare. The ACA has dramatically reduced the number of Americans without health insurance, from more than 41 million in 2013 to less than 29 million two years later, a drop of 13 million people. A repeal of the ACA would increase the number of uninsured by 20 million people, so the that number of uninsured would rise to record levels.

Hardest hit by repeal of the ACA would be poor and lower-income households earning less than twice the official poverty line, about $36,000 for a family of four, who would be cut from Medicaid and subsidies to buy private insurance. Latinos, who already have the highest percentage of people lacking health insurance, would also be hit the hardest among nationalities in the U.S. African and Asian Americans are likely to lose medical insurance at almost twice the rate of white Americans. There are more than 50 million people who have current health issues that could make them uninsurable if the ACA is repealed.

Repeal of the ACA would also increase the costs of Medicare and reduce tax revenues for Medicare. When the ACA was passed the date that the Medicare trust fund was expected to run out of money was pushed back by 11 years from 2017 to 2028. While the Medicare program uses ‘pay-as-you-go’ financing so that it would not be in any immediate danger, the revenue shortfall will mean higher Medicare premiums. Republicans in Congress would also use the exhaustion of the Medicare trust funds to push their plans to privatize Medicare, which could leave millions of seniors and disabled without health insurance and raise the costs of health insurance for millions more.

Despite being a major federal spending program, repealing the ACA would actually raise the federal budget deficit. The ACA has a number of taxes aimed at higher-income households and medical corporations, as well as rules to reduce spending on Medicare, which more than offset the costs of the Medicaid expansion and subsidies on the private insurance exchanges. Private health insurance, with overheads (profits and administrative costs) that average more than 12% of each premium dollar, are far more expensive than government health insurance such as Medicare, where overhead costs are less than 2%. The total number of federal workers serving more than 50 million Medicare and more than 70 million Medicaid patients is only 6000, or one worker for every 20,000 patients.

But to just fight the Republicans by defending the ACA will not go far enough. The ACA has left millions of people uninsured. Some of the insurance exchanges in states where Medicaid was not expanded have only one private insurer left. These states face a monopoly that can charge high premiums and they could even find themselves without a single private insurer. What is really needed is a national single-payer health insurance system, sometimes called Medicare for All, where the government would provide health insurance for everyone in America. By cutting out the high overhead of private health insurance and instituting strict cost controls, a single-payer system could cover everyone while expanding the program to cover long-term care and dentists, which Medicare does not cover now.