I’ll get into the weeds in a moment, but the key to this analysis, as golf pros say to putters who are over-focusing on the nuances of the green, is to “not give up the hole.” The reason this bill is unfixable is because its basic structure will cause millions of economically vulnerable people to lose health coverage, raise individual premiums by 20 percent, and allow insurers to drop essential benefits like maternity care and substance abuse treatment, all while cutting taxes for the wealthiest households, drug companies and insurers.
Some of the tweaks will delay or slightly dampen those effects, but a slightly less terrible bill is still a terrible bill. Here’s what’s changed in their new bill, along with brief commentary about why each change fails to solve a fundamental problem.
— The Cruz amendment. It’s a stone-cold recipe for adverse selection, as it allows states to revert to “medical underwriting” — i.e., charging higher premiums or denying coverage based on health history (including preexisting conditions), as long as they have at least one Obamacare-style plan in place. “Under such a system, healthier people would naturally gravitate toward underwritten plans, which would offer them lower premiums. Meanwhile, the community-rated plans would disproportionately enroll people with expensive preexisting conditions, and insurers would price them accordingly.”
—Adding $45 billion for treating opioid addiction. This would provide one slug of needed help, but it’s short of what experts recommend and just a big Band-Aid. That is, it pulls out one very serious medical problem and, instead of providing ongoing insurance against the risks of opioid addiction, it essentially block-grants funding for this illness. The Affordable Care Act’s Medicaid expansion has helped meet some of the needs of the opioid-addicted population in recent years, but with the expansion unwound under the Senate bill, many people suffering from opioid abuse would have nowhere to turn if future Congresses failed to repeat this opioid-addiction-specific funding.
—Adding $70 billion in “state stability” grants. Like the opioid funding, this too is a block-grant-like patch intended to lower premium costs. But by the time the bill’s major cuts to Medicaid and the ACA’s premium subsidies kick in, these grants amount to just 10 percent of the cuts to those programs (i.e., in 2022-26). Plus, they end in 2026. In other words, another inadequate Band-Aid.
—Expanding Health Savings Accounts. HSAs are already worth much more to the wealthy than to low- and moderate-income purchasers of health premiums on the individual market. On top of the original Senate bill’s plan to double the annual contribution limit, the new bill would allow the use of HSA accounts to pay premium costs, something they can’t be used for now. Based on their low tax rates and difficulty setting aside significant bucks for future health-care expenses, HSAs do little to nothing for the millions of low- and middle-income people who will lose coverage or face higher costs upon the ACA’s repeal. CBPP reports that “ … a 64-year-old with income of $56,800 would have to pay about $11,600 more in premiums for the same plan she has today, even taking into account her tax savings from paying premiums through an HSA … while a 40-year-old with income of $26,500 would see tax savings of less than $400 from paying her premiums through an HSA, but would see her deductible jump from under $1,000 to more than $6,000 due to other provisions in the Senate bill.”
— Leaving the high-income Medicare taxes in place. This idea was floated to offset the critique that what’s really going on here is reverse Robin Hoodism: cuts in health coverage to low-income people to pay for tax cuts for the wealthiest households. I give the Republicans credit for responding to this critique, but it doesn’t actually change the core structure of the bill, as tax cuts in the bill still amount to nearly $400 billion over 10 years — with the overwhelming majority of them still flowing to the wealthy and corporations.
Importantly, no major changes were made to the Medicaid provisions of the bill. The ACA’s Medicaid expansion would effectively end, as states that took the expansion will face unsustainable cost increases and will be forced to drop it. The Senate bill still caps and cuts Medicaid, fully retaining deeper long-run cuts to Medicaid than even the House bill. Altogether, it’s likely that Medicaid would still be cut by more than one-quarter by 2026, and 15 million fewer low-income people will be enrolled in the program.
Whether these changes are enough to get moderates on board is yet to be seen. But you can’t “fix” this bill. Its fundamental architecture still unwinds the coverage gains made by the ACA, implements sharp cuts to Medicaid, ends the guaranteed provision of essential benefits and reduces coverage to vulnerable populations to pay for tax cuts to the well-off.