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Here’s the real loser in the GOP health-care reform plan

Thursday's 217-213 vote in the House to repeal Obamacare and replace it with the Republicans' new health-care plan constitutes one of the largest wealth transfers in history from the poor and middle class to wealthy Americans. This will further exacerbate economic disparities in our country. Even worse, the health of our nation will likely decline from its already perilous state, as far fewer Americans will have adequate health insurance.

The "repeal and replace" vote represents an enormous political win for President Donald Trump and House Speaker Paul Ryan, coming on the heels of a previous attempt in March that failed. They can justifiably take credit for following through on their campaign pledge, but will also face the wrath of the American public if the new health plan causes further health problems for the American people. The health-care debate now shifts to the U.S. Senate, where a vastly different bill is expected to emerge as skeptical senators focus on the implications of the House plan.

The American Health Care Act (AHCA) poses significant risk for many of the 300 million Americans who will face disruption in their health-care insurance for the second time in the past decade. Most of the recent debate in the House focused on the lack of coverage for pre-existing conditions. The bill includes just $23 billion as support for up to 110,000 people with pre-existing conditions, or 5 percent of the 2.2 million Americans in this category. But the greater issue is whether millions of Americans will have any affordable coverage at all.

"All the bill accomplishes is to shift the burden of paying for health care from the wealthy and healthy to middle class and unhealthy citizens."

In spite of significant changes in the March bill to win support from the right-wing Freedom Caucus and modest concessions for moderates, Republican House leaders intentionally did not ask the Congressional Budget Office (CBO) to analyze its financial impact — which will have to be done before the Senate votes. Using the most recent CBO projections, 24 million fewer Americans will have health insurance under AHCA than Obamacare, and wealthy Americans, health plans and pharmaceutical companies will receive an $885 billion tax cut. These projections will likely get worse under the House-approved plan.

To be clear, this bill does nothing to improve the health of Americans. Nor does it reduce the staggering cost of health care, or lessen its inexorable rise. The likelihood is that the overall health of our citizens will get worse, especially among those who cannot afford the full coverage they have today, including a large proportion of Trump voters. All the bill accomplishes is to shift the burden of paying for health care from the wealthy and healthy to middle class and unhealthy citizens.

It also changes the focus of health care from the federal government to the states, many of whom will design their own plans. This is consistent with Republican principles, but it will lead to greater health disparities between the states. Having a state and local focus is not a bad thing per se, as states may be better able to design plans for their residents than living with the "one size fits all" plans under Obamacare.

Many states will eagerly eliminate federal mandates in the current plan and coverage for pre-existing conditions. Alternatively, they will put people with pre-existing conditions into high-risk pools, where coverage may cost up to five times as much as it does today because there are no healthy people in their insurance pool to balance out the premiums. Their pools will be like automobile insurance pools for teenagers who have had prior DWIs — an enormous sum that many lower-income Americans cannot afford. Or they may face annual or lifetime caps on reimbursement or be forced into high-deductible plans where they cannot afford to pay the deductibles.

While AHCA fulfills one of President Trump's promises — repealing Obamacare — it will not meet three of his commitments to: 1) provide health care for everyone with pre-existing conditions, 2) lower health care premiums and costs, and 3) avoid reductions in Medicaid coverage. Instead, AHCA cuts Medicaid, makes health care unaffordable for many people with pre-existing conditions, and raises insurance premiums for many "like-for-like" plans.

In spite of these very significant problems, there is the hope that the private market — employers, health plans, and providers — will continue the momentum that has been building since the passage of Obamacare in 2010, and lead the way in improving the health of the American people. If they don't, expect the country to undergo yet another upheaval in health care under the next president.

Commentary by Bill George, a senior fellow at Harvard Business, former Chairman & CEO of Medtronic, and the author of "Discover Your True North." Follow him on Twitter @Bill_George.