Paul Ryan Wants to Sell You Trickle-Down Health Care

Why do Republicans want to repeal and replace Obamacare? Just follow the money.

The goal for a nation’s health care system should be to provide the best possible coverage to the most people for the least amount of money.

That’s it. Full stop. That simple.

But because life is complicated, health care tends to get complicated, and the public conversation about health care becomes incredibly complex. And lots of people—health insurance providers, politicians—are not invested in making the topic any easier to understand. It’s better for them if you stay out of the conversation entirely .A complex health care system demands a lot of attention and takes time to discuss, and plenty of Americans are too busy to give insurance the time it demands.

So I’m going to try to keep this article as clear as possible. And the best way to keep focused is to pay attention to motivations. Once you understand why someone is doing something, their actions become a hell of a lot easier to understand.

So let’s talk about the motivations behind the Affordable Care Act, which is commonly known as Obamacare. The Obama Administration was trying to solve two major problems:

1. Health insurance was too expensive.
2. Too many Americans were not covered.

With those two problems in mind, the goals were relatively simple: get more Americans to sign up for health care and keep costs down. The core of the solution was this: require Americans to buy health insurance.

Americans who didn’t have health insurance were required to pay a penalty in their federal taxes. In this way, the Obama Administration enlarged the size of the market considerably. And they made health insurance more affordable—through subsidies, through laws limiting the amount of profits health insurance providers could draw, and by not allowing insurance providers to charge you more for having a pre-existing condition.

So with just the motivations in mind, the Obamacare plan seems pretty simple. And it worked! Let’s look at whether the motivations were met:

1. Were health care costs lowered? Yes. Obamacare cost less than expected. Health insurance premiums were lower.
2. Did more Americans sign up for health care? Undeniably, yes! The uninsured rate in America hit an all-time low, with tens of millions of Americans signing up for health care.

Enter House Speaker Paul Ryan. Ryan is a Republican and a big fan of Ayn Rand — the popular libertarian sci-fi novelist who also published a book titled The Virtue of Selfishness. His big problem with Obamacare seemed to be the mandate, because he believes that government shouldn’t force anyone to do anything.

But Ryan has another problem with Obamacare, and it has to do with his view of the world. Ryan is a true believer in the 40-year-old idea of trickle down economics. He believes that the economy is an engine that is powered by America’s wealthiest top one percent. He thinks that the way to create jobs is to give tax cuts to wealthy Americans and corporations, to deregulate industry, and to keep wages low for the poorest Americans. The money transferred to the wealthiest Americans will then, theoretically, trickle down to the middle class.

This has not worked out at all, for the simple reason that when you give the wealthiest Americans a bunch of money, they tend to keep that money. Here’s a chart demonstrating just that:

Ryan seems to believe the problem is that we simply haven’t given enough money to the top one percent, that if we give them even more money, the money will then trickle down to everyone else in the form of more jobs.

So let’s look at Paul Ryan’s motivations for getting rid of Obamacare and replacing it with his new plan:

1. Kill the mandate.
2. Transfer more money from 99 percent of Americans to the wealthiest top one percent.

Does the plan which Ryan unveiled yesterday, the American Health Care Act, fulfill those two motivations? (For the sake of clarity, we’ll just call the new plan “Ryancare” from here on out.)

Ryancare eliminates the mandate. Well, kinda. It doesn’t require Americans to pay more on their taxes if they don’t have health insurance. Instead, if you go without health care coverage for more than two months, when you sign back up for insurance, insurers can charge you a 30 percent premium surcharge every month for a year.

This means that instead of the tax penalty, which goes toward paying for health insurance for more Americans, you’re paying a penalty to health insurance providers, which goes toward their profits.

Ryancare does not save Americans money on their health insurance. Analysis indicates that Obamacare enrollees will be charged $1542 more per year under Ryancare—another win for corporate profits at the expense of average Americans. And Ryancare will axe the requirement that insurance plans provide coverage for “essential health benefits” like maternity care and mental health treatments, presumably because they’re too expensive and not profitable enough.

Of course, Ryancare contains a huge tax break for the wealthiest top one percent, too. CNN Money says:

The legislation would eliminate two taxes that Obamacare levied on the wealthy to help pay for the law. Nearly everyone in the Top 1%, who earn more than $774,000 a year, would enjoy a hefty tax cut, averaging $33,000, according to the non-partisan Tax Policy Center. Those in the Top 0.1% would get an average tax cut of about $197,000.

So let’s look at the motivations behind Ryancare again.

1. Does it eliminate the mandate? Yeah. Well, kinda. You don’t have to pay any tax penalties if you don’t have health insurance. But if you sign up for health insurance for the first time, you’ll have to pay penalties to the insurance companies themselves. So it removed the government’s role in all this and turned taxes that helped pay for coverage under Obamacare into profits for insurance companies.
2. Does Ryancare steal from the poor and give to the rich? Absolutely. Tax cuts for the wealthy in exchange for higher costs for poor Americans is baked into the plan. The Ryancare plan allows health insurance companies to deduct CEO pay as a business expense from their taxes, saving them millions. Who pays for all this welfare for the wealthy? According to a CNN Money report, Americans who earn $20,000 annually would “take the biggest hit.”

This is a plan that benefits the wealthy at the expense of everyone else. And we’ve been digging through the plan’s details for less than 24 hours: more horrible truths about Ryancare are sure to be uncovered in the days to come.

This morning, Utah representative Jason Chaffetz famously told CNN that he and his Republican lawmaker friends are…

…getting rid of the individual mandate. We’re getting rid of those things that people said that they don’t want. And you know what? Americans have choices. And they’ve got to make a choice. And so maybe rather than getting that new iPhone that they just love and they want to go spend hundreds of dollars on that, maybe they should invest in their own health care. They’ve got to make those decisions themselves.

And see, this line really gets to the core of the problem with Paul Ryan’s motivations behind Ryancare. This health care plan is about winners and losers: it rewards the “winners” in the economy—the wealthiest Americans—at the expense of “losers” like you and me. And if you can’t afford a cell phone because you need insurance? Well, that’s too bad for you, loser.

(We could spend a week on the hypocrisy of Chaffetz’s comments alone: the fact that he enjoys a great government-provided insurance plan, the fact that Americans basically can’t exist without a phone anymore, the disconnect between a $50-per-month cell phone and the $833 per month it costs to keep a family insured. But for the sake of brevity, we’ll keep moving.)

Chaffetz and Ryan’s Republican Party claim to believe in capitalism. But Ryancare, and Chaffetz’s unbelievably dumb comments about Ryancare, indicate that they’ve lost the plot.

In a healthy capitalist system, we want consumers to be able to afford both the phone and the health insurance. We don’t want to limit anyone’s choices, we want to expand them. The more people can spend in their economy, the better off we all are—from the poorest American to the richest.

And in fact, that’s the thing that Republicans don’t seem to understand about health care: by limiting health insurance to millions of Americans, they’re hurting the economy. We need as many healthy Americans as possible to work and buy and create and build. If our neighbors are worried that they’re one child’s broken leg away from bankruptcy, they’re not going to buy houses or plan for the future or invest in their communities.

Providing tax breaks to the top .01 percent and increasing the flow of profits to health insurance companies isn’t going to improve the economy when the poorest Americans go back to worrying about how they’re going to pay rent the next time the flu goes around, or how to pay grandma’s hospital bills.

Health insurance isn’t just about our physical health and stability. It’s about our nation’s health and stability. I’m not a particularly bright guy, but even I can see that. It’s easy to understand; all you have to do is follow the money.