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The AHCA Is Delivering Something Other Than Healthcare

On May 4, the House voted 217 to 213 in favor of the American Health Care Act (AHCA) which will “repeal and replace Obamacare.” The Senate is currently drafting an alternate bill to replace the Affordable Care Act (ACA).

The House bill has many moving parts but key are eliminations of taxes and penalties, the replacement of income-based subsidies with age-based tax credits, and significant reductions to funding of Medicaid. It also provides options for states to seek waivers of coverage and pre- existing condition mandates. The Congressional Budget Office (CBO) estimates the net effect will be an additional 23 million Americans without insurance and a cumulative deficit reduction of $119 billion over the next 10 years; negligible compared to the almost $40 trillion we will spend in that time.

This AHCA is bad for Americans’ health and bad for American businesses. Like the ACA it seeks to replace, it does little to address the underlying causes of extraordinarily high total healthcare spending in the United States, now near 18% of GDP. While the CBO’s projected $119 billion in savings may sound significant, compared to the almost $40 trillion total we will spend (public and private) over the next decade, this savings is only about 1/3rd of 1% of the total -- almost $0 when considered in context.

So, if the AHCA will nearly double the ranks of the uninsured while delivering negligible savings, what’s the debate all about? Critics will reasonably point out it’s really about transferring the burden from the wealthy back to poor. That criticism, while justifiable, ultimately lacks full understanding of what drives supporters of the AHCA.

The AHCA seeks to provide more personal choice and individual responsibility. A key objective is to eliminate the personal mandate, allowing an individual to choose to go without insurance, without incurring the ACA’s tax penalty. The bill also heavily relies on the expected benefit of the “free market” to drive competition up and prices down, through individuals doing their homework and choosing high-deductible plans. These views are highly consistent and aligned with conservative values.

The key to understanding the motives of AHCA supporters of the AHCA is to realize the bill is not providing health care at all. Instead, it is providing “liberty”, or rather a narrow form of economic freedom. Such freedom is at the core of the values of many Americans, steeped in the “Life, Liberty, and the Pursuit of Happiness” narrative which underlies our collective consciousness.

Unfortunately, what supporters of AHCA legislation do not realize is that, increasingly, Americans have a far greater definition of “freedom.” Beyond narrow economic freedoms, modern Americans understand that true freedom is, as Nobel Prize-winning economist Amartya Sen would say: “The freedom to live lives they have reason to value." This conception of freedom includes providing people true educational opportunity, secure retirement, and comprehensive health.

Health in this context includes not only the absence of sickness, but also the freedom from the possibility of financial hardship due to sickness, whether it’s freedom from a sudden liability of a $10K deductible due to a single-family car accident or freedom from bankruptcy in the case of a serious chronic condition. This freedom further includes the peace of mind that comes with knowing your fellow citizens are also safe from these health-related financial hardships, our seniors are cared for with dignity, and our children are fully inoculated and able to afford the life savings medicines they need. These are the sorts of freedoms our developed nation peers enjoy with their comprehensive, publicly funded, single- payer health care systems. True healthcare reform would provide these freedoms to Americans. HR676, the “Medicare For All” act would be such a reform.

A Medicare-for-All system would expand healthcare coverage to all Americans and reduce costs for individuals and businesses. It would also remove the administrative burden associated with providing healthcare as an employee benefit. This would provide real freedoms to individuals by allowing them to select any doctor or hospital and to employers by reducing the time and costs associated with these benefits.

Business leaders can take action on healthcare reform today. If you’re interested in learning more about the business benefits of Medicare-for-All, add your voice to the movement of business leaders calling for real freedom on healthcare by joining Business Leaders Transforming Healthcare, an initiative led by the American Sustainable Business Council.

Jim Davidson is co-founder and President of PeakChange, a Denver-based firm that offers management consulting services for startups and early stage social ventures.