It appears that the Republican leadership’s plan is to get something (anything) through the House today, to subsequently sneak a more moderate version of it past the Senate parliamentarian on a bare majority vote, and then to rely on the pressure of the moment to bring the Freedom Caucus to heel during the negotiations between the two houses. You wouldn’t want to bet the ranch on it working, but it certainly isn’t impossible.
So we have to imagine how the system would work in states dominated by the GOP, given the new waiver provisions in AHCA. My home state of Florida is a good example. To give you some idea of how our state government works, consider that when Rick Scott was elected governor, I only half-jokingly said that he would view the elderly, sick, and unemployed as underperforming assets who should be securitized and sold to unsuspecting German investors. Our government turned down billions in stimulus money during the Great Recession and refused to expand Medicaid. That is the attitude that will prevail when the new system is unveiled.
The pertinent questions are as follows:
1. Will age be considered a pre-existing condition by the insurance companies? It is my understanding that AHCA waivers apply to pre-existing conditions, but not to age; insurance companies will still be subject to some limits on their ability to charge higher fees on the nearly old. From the perspective of the companies, that would make no sense. In the real world, expect them to scrutinize the applications of the nearly old much more strictly.
2. How will the system work in states that obtain the pre-existing conditions and essential requirements waivers? The current version of the exchanges will have no reason to exist, as the fundamental premises behind them will be gone. It will be necessary for consumers to search individual company web sites on the internet. Lengthy application forms and physicals will be required again. Anyone with a pre-existing condition who is subject to a massive surcharge will then have to apply to the state for permission to participate in the high risk pool. The state will be free to impose whatever conditions it wants on that participation: work requirements; drug tests; means tests; low lifetime benefits limits; high deductibles; and so on.
3. Will states like Florida actually apply for the waiver? Ideologically, you would expect Scott and his friends in the Legislature to ask for the waiver. Politically, it could be a different story. The waiver will damage the interests of millions of nearly old people, the majority of whom vote for Republicans. Will ideology prevail over self-interest? I’m not sure.
4. What would the economic impact of the waiver be on Florida? People old enough for Medicare won’t be affected, at least in the short run, but people aged 50 and above will be. I suspect you would see the beginning of an exodus of the nearly old from the state, and a reduction in the number of new retirees. The economic impact would be severe, and completely negative.
Would our government shoot itself in the foot purely for the pleasure of ending an entitlement program that it considers odious, because it redistributes wealth to people it considers unworthy of the benefits? It’s an open question.