The Senate Republicans just released their version of repeal-and-replace Obamacare. I can see why they negotiated in secret. While I fear there’s enough camouflage in the bill to give alleged “moderate” Republicans the cover they need to support the bill, this legislation is even worse for affordable, quality health-care coverage than the House bill.
That may not be obvious, given the lipstick, and there is an improvement or two in aspects of the Senate bill over the House version. But based on what the Senate proposes to do to Medicaid, not only is this version worse for the tens of millions who depend on this source of coverage, but it’s also worse in a way that might not show up in the Congressional Budget Office’s score out next week.
For a quick rundown, check out this side-by-side comparing the Affordable Care Act to the House and Senate bills. The big picture remains the same: large cuts in subsidies and especially in Medicaid that partially pay for big, regressive tax cuts, as tax expert Chye-Ching Huang shows here. For a bit of perspective, Brandon DeBot (our colleague at the Center on Budget and Policy Priorities) points out that $33 billion of the tax cuts that accrue to the 400 richest households happens to equal the total of the Medicaid cuts from four states.
Compared with the ACA, the new bill both cuts the premium subsidies for those who purchase coverage in the non-group market, and lowers the eligibility threshold for such assistance. As Sarah Kliff from Vox puts it: “The Senate bill will tether the size of its tax credits to what it takes to purchase a skimpier health insurance plan than the type of plans Affordable Care Act subsidies were meant to buy. Essentially, these tax credits buy less health insurance.”
Like the House bill, private insurers can charge older customers as much as five times more than they charge younger customers, up from three times under the ACA.
But my headline point — this bill is worse than the House bill — is in regard to Medicaid. First, most of the noise your hear around the ACA is around the non-group market, and, no question, the exchanges need improvements, though part of that is a function of recent sabotage by those hoping to make good on their proclamations about “failed Obamacare.” But quantitatively, Medicaid is much more important: It covers 20 percent of the population, almost three times that of the non-group market (to be clear, that part of the market must work for the system to adequately function). Medicaid covers just under 50 percent of all births (!), about two-thirds of all nursing home residents, 40 percent of all poor adults — 74 million benefit from Medicaid or CHIP (kids’ version).
And the Senate bill cuts Medicaid more deeply than the House bill. Over the long term, a lot more deeply.
Both the House and Senate bills roll back the ACA’s Medicaid expansion, though the Senate bill pushes this back a couple of years to placate some Republican governors in states that took the expansion. But it’s what comes next that makes the Senate bill especially cruel. Starting in 2021, Medicaid goes from a federal-state financing partnership that expands with need, to a block grant that doesn’t. Funding would be capped at a set amount per Medicaid recipient, and starting in 2025 — that year is very important, as I’ll show in a moment — the cap would grow much more slowly than current projections for Medicaid spending per beneficiary, and considerably more slowly than the House bill.
Why 2025 for this hard cap? Because they’re gaming the ref: If CBO does its usual 10-year score, the impact of this cap on the loss of Medicaid coverage will hardly get picked up at all. It’s possible, and we should very quickly all insist on this tweak, that the budget office will give us estimates of coverage losses from this change over a longer window. But if CBO doesn’t, the Senate bill may not look obviously worse than the House bill on this point (14 million lose Medicaid coverage under the House bill according to CBO). Looks, in this case, will be deceiving.
So we’re left with skimpier subsidies for thinner coverage relative to the ACA and, post 2025, increasingly sharper cuts in Medicaid relative to the already draconian House bill.
Surely, moderate Republicans will oppose this madness, right?
I hope so, and a CBO score over a longer period might help, but I’ve come to view “moderate” Republicans as mythical creatures. They’re easily seduced by precisely the kind of lipstick that’s on this bill – e.g., a later start date for winding down the Medicaid expansion and the appearance of putting coverage of preexisting conditions back in the bill when, in reality, allowing states to waive “essential health benefits” means insurers can still drop coverage for maternity care, mental health services and substance abuse treatment.
Then there are the hard-right senators for whom the bill isn’t mean enough. Maybe they’ll block it, and their opposition does potentially create a tough Sudoku problem for Senate GOP leader Mitch McConnell: make the bill even meaner to get Sen. Ted Cruz’s vote, and perhaps you lose a “moderate.” There will be a lot of scrambling over the next couple of weeks.*
But please don’t lose sight of what’s going on here: a massive transfer of hundreds of billions of dollars that are now being used to help vulnerable families and moderate-income households to the wealthiest households. The Senate bill solves the problem that the poor in America have too much, and the rich have too little. In fact, it solves that problem even better than the House did.
*You’re going to have to fend for yourself on this one. I’m outta here, heading to the Far East for a few weeks with little intention to look back westward. Please don’t let the bad guys mess things up while I’m gone.