When health care reform was first passed, elected Democrats told progressives not to worry about how bad the bill actually was because it would serve only as a “starter home” that would be improved on later. Since then, however, several changes have been or will be signed into law by President Obama, all of which will make the ACA worse.
The most damaging is that Obama has already signed one reduction of the exchange affordability subsidies and is expected to sign another, similar reduction in the next few days. The laws reduce the money going toward exchange affordability subsidies by increasing the penalty a family on an exchange will need to pay back if their income fluctuates slightly upward during the year. The first time, the savings were use to increase pay to Medicare providers, and the second time, to pay for repealing the new 1099 tax reporting requirement for business. The CBPP explains why this will have serious negative consequences for middle class Americans.
In addition, as part of the government funding compromise reached with House Speaker John Boehner last Friday, the President has agreed to gut two other provision of the new health care law. Obama agreed to eliminate Ron Wyden’s Free Choice Vouchers program that would have helped some people with expensive employer-provided insurance get more affordable coverage on the new exchanges.
Also part of the deal, Obama agreed to significantly cut the funding for new health insurance co-ops. While I’ve personally been very skeptical about how much of a positive impact the co-op program will have, President Obama, his advisers and top Democrats spent a lot of time telling the public they were a really good idea. They claimed they would be almost as effective as a public option at increasing competition, reducing prices, and improving quality. If we take them at their word, this is significant reduction in funding for co-ops and from their perspective should be seen as a real blow to the law.
If the health care law really is a starter home, then what President Obama has been doing is effectively letting the Republicans rip out the house’s copper plumbing to be sold as scrap for pennies on the dollar.