An open letter to Congressman David Young

Tom Witosky follows up on recent correspondence with his U.S. House representative. -promoted by desmoinesdem

March 13, 2017
Dear Congressman Young,

I am writing this open letter to you because the time is fast approaching when your words will be put to the test with your vote on the proposed American Health Care Act.

Make no mistake, the Republican majorities’ decision to amend key portions of the Affordable Care Act will change coverage for millions of us who have obtained insurance through federal or state exchanges.

In your Feb. 21 letter to me, you outlined your concerns about the current law and what you believed needed to be corrected with new legislation. Those concerns included:

“We need a healthcare law that works for all Iowans, the facts are that the current healthcare law works for some but it does not work for others.”

Analysis of this proposal by a variety of experts and expert groups – conservative and liberal — indicates strongly that the House proposal does nothing to provide a law “that works for all Iowans.”

Avik Roy, considered by conservatives as one of their top health care analysts, wrote this for Forbes on March 7.

The AHCA itself contains enough flaws that there can be little doubt that the plan will price millions out of the health insurance market.

Expanding subsidies for high earners, and cutting health coverage off from the working poor: it sounds like a left-wing caricature of mustache-twirling, top-hatted Republican fat cats.

“Costs have significantly gone up for millions – not down – in premiums, costs, costs, and deductibles. The reality is the current law and system is failing and is expected to worsen.”

The insistence that the ACA is the culprit in driving up insurance premiums and health care costs generally isn’t supported by any data provided by health care experts. Common sense tells you that the addition of 20 million to 30 million individuals or 7 percent of the population not receiving government sponsored health care could not have that kind of impact in a country where 284 million individuals are covered by health insurance.

Moreover, most experts argue that the problems within the exchanges are the result of fewer individuals enrolling as required and individuals with health problems not addressed previously finally getting care. Republicans have argued against the individual mandate and have refused to set up state exchanges such as in Iowa. This kind of opposition leads only to a self-fulfilling prophecy intended to undercut the necessity of having a higher number of subscribers.

The House proposal’s answer to this problem seems a bit confusing. The bill incentivizes subscription by offering tax credits more advantageous to the individuals likely already to have health insurance coverage – those with incomes of more than $75,000 but makes it less affordable for those likely to drop their health insurance because of cost.

Again, Avik Roy provides that analysis in his Forbes article:

The AHCA begins to phase [tax credits] out for those earning $75,000 a year, or $150,000 for joint filers. For every $1,000 in earnings above those thresholds, the value of the credit phases down by $100. Hence, for a single 40-something, the credit would phase out at $105,000 in income.

Amazingly, these thresholds are far more generous than Obamacare’s. Obamacare’s tax credits phase out at 400 percent of the Federal Poverty Level, or $48,240 in 2017. The AHCA’s tax credits would phase out somewhere above 850 percent of FPL.

The means-tested tax credit should actually go in the other direction, phasing out somewhere around 300 percent of FPL. According to the Congressional Budget Office, the vast majority of people making more than 300 percent of FPL have access to employer-sponsored coverage and don’t need an individual-market tax credit.

Whether you agree with Roy’s recommendation or not, your stated goal that legislation should provide access to affordable health insurance appears to be at odds with the House proposal.

“The federal government will spend trillions of hard-earned tax dollars when our nation is already swimming in debt. These are our neighbors, family members, and friends. That’s not reform – that is hurting some to help others – that is just wrong and we must do better.”

Your stated concern for the national deficit doesn’t appear to be answered by the House proposal. Committee action already had been taken without any scoring by the Congressional Budget Office and, clearly, there is a disinformation campaign underway to undercut the CBO’s credibility. Interestingly, the CBO now has predicted the House bill would reduce the deficit by $337 billion by 2026, but, of course, that would be prompted by 24 million Americans losing coverage during the same time period — 14 million of them right away.

A report by the congressional Joint Committee on Taxation says that two taxes to be repealed by the House plan would deliver $144 billion in tax relief over 10 years only to those individuals with incomes of more than $1 million. The House Ways and Means Committee refused to make this report public as reported by the New York Times.

In addition, the proposal provides major tax relief to health insurance companies by allowing fuller deduction of compensation to those companies’ executive officers as a business expense. The ceiling is now $500,000, which to most people would appear to be adequate. It is estimated the cost of this tax break is $400 million over 10 years.

These taxes have provided a system of financial support for those in need of health care. How does the repeal of these taxes further the cause of helping to improve this nation’s health?

“I have always believed patients with pre-existing conditions must have the ability to find safe, secure, and stable coverage. Denying any patient access to healthcare is not the Iowa way and this provision and concept is one part of the ACA that is good and is right.”

The House proposal provides you with a talking point, but the reality of maintaining the requirement covering pre-existing condition as proposed is dramatically changed. By removing the individual mandate, the measure undercuts the financing base of affordable insurance for those purchasing individual policies. It is clear that healthy subscribers always pay for the sicker subscribers in an insurance pool – that’s how insurance works.

The House plan also guarantees higher premium costs for older purchasers, ages 50 to 64, because it is lifting the limit on what older subscribers can be charged from three times what younger subscribers pay to five times more. Experts are virtually unanimous that the cost of health insurance will increase substantially for older purchasers under the House plan.

The CBO report made an interesting observation concerning the fairness of the House proposal’s impact on premiums. “By 2026, CBO and JCT project, premiums in the nongroup market would be 20 percent to 25 percent lower for a 21-year-old and 8 percent to 10 percent lower for a 40-year-old—but 20 percent to 25 percent higher for a 64-year-old,” the report said.

Essentially, it would appear the House plan raises the serious question whether many individuals, particularly those between the ages of 50 to 64, with pre-existing conditions will be able to afford to purchase health insurance. If coverage isn’t affordable, is that not denial of access?

I could continue to question whether the goals you outlined are accomplished by the House proposal, but that’s your decision to make.

In sum, you will be making a decision that will have a direct impact on roughly 150,000 to 200,000 Iowans – those receiving health care either through Medicaid or individual purchasers on the federal exchange.

Your stated goals include providing access to all Iowans to health care coverage, yet this measure clearly makes that more difficult for those who need it the most and quietly provides major tax breaks to the wealthy.

When you vote, please provide your constituents with a detailed explanation of how this measure met the goals you outlined in your Feb. 21 letter. Voters are going to want to know whether this measure improves their lives or if the continual criticism of the Affordable Care Act was a simplistic political ploy that you now have to deliver at the expense of the health of millions of U.S. citizens.

Thank you for your attention.

Tom Witosky

Tom Witosky retired from the Des Moines Register in 2012 after a 33-year career as an investigative reporter specializing in politics, business and sports. He is also the co-author of Equal Before the Law: How Iowa Led America to Marriage Equality.

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  • Thanks Tom

    Boy, we could sure use you back at the R(&T) now. I’m wondering what local insurance execs have to say about these developments?

  • Thank you again

    Thanks for taking the time to prepare this. Well done.