Heritage Action opposes the Patient Protection and Affordable Care Enhancement Act (H.R. 1425) and will include it as a key vote on our legislative scorecard.
This week, the House will vote on H.R. 1425, the Patient Protection and Affordable Care Enhancement Act. This legislation includes a wish list of the Left’s health care priorities, as it would establish price controls for prescription drugs, punish states that haven’t expanded their Medicaid programs, create an expensive new federal program, and attack free market alternatives to the Affordable Care Act (ACA) exchanges by putting an end to the Trump Administration’s section 1332 waivers. On top of this, the bill would provide a windfall to insurance companies through an expansion of the ACA by broadening eligibility for federal premium subsidies to everyone, regardless of income, while also expanding the size of the subsidies themselves.
Doug Badger, Visiting Fellow for Domestic Policy Studies at The Heritage Foundation, explains how these subsidies dramatically raise costs:
In December 2013, 11.8 million Americans had individual health insurance coverage. The federal government provided no subsidies for that coverage.
Six years later, in December 2019, enrollment in individual health insurance coverage stood at 12.4 million.
According to Congressional Budget Office data, the federal government sent $248 billion in premium and related subsidies to health insurance companies over those six years.
That investment produced a net increase in individual coverage of 600,000. That works out to nearly $69,000 annually per net newly insured person.
[H.R. 1425 would] increase federal subsidy payments to insurance companies.
It is not clear that increasing these subsidies would meaningfully reduce the number of uninsured. More than 99% of Americans have access to health coverage, regardless of their income or medical condition.
Additionally troubling, the bill would establish a new, unnecessary federal reinsurance program that would cost taxpayers an estimated $10 billion annually. The bill would roll back the Trump Administration’s success in granting section 1332 waivers, which have allowed numerous states to establish their own innovative programs that reduce premiums. Rather than taxpayer dollars going to insurance companies via premium subsidies, states have been able to use a combination of state and federal funds to establish their own successful programs. These successes were all achieved without any further increase in federal spending.
This legislation also seeks to create an international pricing index for prescription drugs, which amounts to nothing more than federal government price controls. Specifically, the bill gives power to federal bureaucrats to set an upper limit on drug prices equal to 1.2 times the cost of a drug’s average price in six specified countries (Australia, Canada, France, Germany, Japan, and the United Kingdom). Lawmakers should reject price-setting proposals as data clearly shows that government price-setting has had a negative impact on all six countries included in the international pricing index.
In the midst of the COVID-19 pandemic, Congress should not seek to limit Americans’ health care options by moving towards a single-payer system nor should it seek to enrich insurance company profits. Instead, Congress should pursue policies that expand on the Trump administration’ s efforts to provide more options and flexibility when it comes to health care, and provide real reductions in health care costs for the American people. The Heritage Foundation has written extensively on this issue, along with a coalition supporting a free-market health care proposal.
Related:
Heritage Foundation: Obamacare 2.0 Bill Would Be a Windfall, but Pyrrhic Victory, for Insurance Lobby
Heritage Foundation: How Health Care Premiums Are Declining in States That Seek Relief from Obamacare’s Mandates
Heritage Foundation: Trump’s New Health Initiative Will Spell Relief for Americans
Heritage Foundation: Non-Expansion States Deserve the Same Flexibility as Expansion States in Medicaid
Daily Signal: Obamacare Caused Premiums to Spike. Here’s How States Are Lowering Them Again.
Heritage Action opposes the Patient Protection and Affordable Care Enhancement Act (H.R. 1425) and will include it as a key vote on our legislative scorecard.