Medicaid cuts, 1: The plan cuts Medicaid outlays by a remarkable $880 billion over 10 years, reducing its federal support by 25 percent in 2026. Compared to the ACA, the cuts would knock 14 million people off Medicaid by 2026, most of whom would likely end up uninsured.
Medicaid cuts, 2: The plan functionally ends the ACA’s Medicaid expansion in 2020. Though the plan “grandfathers” expansion enrollees if they maintain continuous Medicaid coverage, CBO estimates that most of these enrollees would “cycle off the program.” The budget office “projects that fewer than one-third of those enrolled as of December 31, 2019, would have maintained continuous eligibility two years later.” By 2024, CBO projects that over 95 percent of Medicaid enrollees will face the lower financing that prevailed before the expansion.
Medicaid cuts, 3: Starting in 2020, federal financing for Medicaid will be fixed at the 2016 per-enrollee cost of the program (the “per capita cap”). This per-enrollee cost will grow at the rate of the consumer price index for medical care services (CPI-M). Importantly, CBO projects that this funding scheme will reduce outlays compared to current law, as they expect Medicaid costs to grow 0.7 percent faster than the CPI-M. States would either have to make up the difference with their own resources or cut services and restrict eligibility.
Unwinding the ACA: The figure below from this WaPo analysis effectively tells the coverage story. The Republicans’ plan unwinds virtually all the coverage benefits gained under the ACA.
Deficit reduction: The bill would reduce deficits by about $340 billion over the next decade. The deficit reduction is the net result of $1.2 trillion in spending cuts (including the Medicaid cuts noted above) offset by $883 billion in revenue losses from tax cuts. Though CBO does not discuss who benefits from these tax cuts, Center on Budget analysis shows that because the taxes that support the ACA are highly progressive, repealing them mostly benefits the wealthiest households and businesses.
Changes in premium tax credits, 1: Older, low and moderate income persons who buy coverage in the nongroup market would pay more out of pocket under the AHCA. By 2026, a 40-year-old with income of $26,500 would pay $700 more for coverage (her subsidy would cover that much less of her premium). A 64-year-old would pay $12,900 more (about half their income). Note that these individuals would be pay more out-of-pocket for inferior plans (i.e., plans that, compared to those under the ACA, pay for 22 percent less of the services they cover).
Changes in premium tax credits, 2: Conversely, higher income individuals — those with incomes above the ACA’s 400 percent of poverty cutoff for tax subsidies — would pay less for nongroup coverage. A 40-year-old with income of $68,200 in 2026 would pay $4,100 less for coverage under the AHCA than the ACA.
But what does it all mean? Let’s discuss that in terms of policy and politics.
I can think of no other explanation for this plan than this: Republicans looked out at the country and concluded that the wealthy had too little after-tax income and the poor had too much health care. So, they wrote a bill that transferred about a trillion dollars that would otherwise have paid for Medicaid benefits and subsidies for low-income older persons to the wealthy in tax cuts and the well-off young in lower premium costs, with a bit of deficit reduction thrown in to meet the requirements of the budget process. Poverty policy expert Bob Greenstein told Vox that “No legislation enacted in recent decades cut low-income programs this much — or even comes close.”
For those of you who thought that punishing the poor and rewarding the rich was a caricature of conservative policy, the bill should disabuse you of that impression. Readers of this column know I’m rarely at a loss for words, but I just don’t know what else to say about this. In the pantheon of mean-spirited, greedy, self-serving, inequitable and unjust conservative policy, this bill stands alone.
In fact, it so reeks of those characteristics that several Senate Republicans are saying it needs work. Sen. Susan Collins (R-Maine) said “These kinds of estimates are going to cause revisions in the bill, almost certainly.” John Cornyn (R-Tex.), the Senate majority whip, said Republicans “obviously” want to “improve those coverage numbers.” And, for what it’s worth, the bill clearly breaks a Trump campaign pledge that no one would lose health coverage or face higher costs.
You might think that House Republicans expected all along to pass a harsh bill that would come back from the Senate with its rough edges softened. But there are apparently hard right House Republicans who don’t think the AHCA goes far enough, so a compromise from the upper chamber would, of course, be even less acceptable.
And, of course, no Democrat in Congress would get anywhere near this mess.
So, I have no idea what becomes of this bill in particular, or more generally, the right wing’s obsessive hatred of Obamacare. You might think their constituents will go nuts if they fail to repeal the ACA, and you might be right. The one thing I’m certain of is that the Republicans are learning something President Obama could have told them if they’d just asked him: The politics of health care are totally unforgiving.