Republicans have made a big change to their health-care plan: Instead of increasing costs for the poor and sick to lower them for the rich and healthy, it would lower costs for the rich and healthy to increase them for the poor and sick.
See the difference? No? Well, you must not be a Republican senator then.
Now, all kidding aside, it is true that the Senate’s latest health-care plan would depart from its earlier versions in a few key ways. Where it wouldn’t, though, is in its results. Those would be the same as ever: insurance would become much more expensive for the sick, slightly more affordable for the healthy, and appreciably worse for everyone in the form of higher out-of-pocket costs. The other constant, of course, is that Republicans would use repealing Obamacare as an excuse to eviscerate Medicaid. That doesn’t get as much attention since it isn’t “new”— it’s been the cornerstone of every Republican plan so far — but it should. Those cuts, according to the nonpartisan Congressional Budget Office, would make 15 million people lose their insurance over the next 10 years.
Indeed, the fact that the Senate would keep all the Medicaid cuts in its new plan that it had in its old one is maybe the most remarkable thing about it. They didn’t even try to hide it like they did with their tax cuts for the rich. Republicans, you see, have not only been trying to get rid of Obamacare’s rules protecting people with preexisting conditions, but also its taxes on wealthy investors. No surprise there. Tax cuts for the wealthy has been the party’s raison d’être for 40 years now. But it’s also where their Medicaid cuts, which aren’t even tangential to all this, come in: those are about offsetting the cost of those tax cuts. The problem, though, is that quite literally taking health-care from the poor to pay for tax cuts for the rich isn’t the most popular of ideas. Even a conservative like Senator Bob Corker (R-Tenn.) has said that he wants to “make sure we’re not in a situation where we’re cutting taxes for the wealthy and at the same time, basically, for lower-income citizens, passing a larger burden on to them.” So Republicans decided to get rid of some of their tax cuts for the rich, and use that money to … expand tax breaks for the rich?
Actually, yes. That, after all, is what health savings accounts are. They let people pay their out-of-pocket medical expenses with pre-tax dollars, which only helps them if they have enough money to be able to put some aside and are in a high enough tax bracket that it’s even worth doing so. It’s no wonder, then, that households making $100,000 or more make up 58 percent of all HSA accounts and 70 percent of the value of all HSA contributions. Which is to say that the Senate bill would take what’s already a tax shelter for the well-off — HSA money can be invested tax-free — and turn it into even more of one by allowing people to use HSAs to pay for their health-care premiums in addition to their health-care expenses. In other words, Republicans would take from the rich with their right hand and give it back with their left.
But there’s no legerdemain when it comes to Medicaid. There are just cuts, and more cuts. The Senate bill would start by undoing Obamacare’s Medicaid expansion for poor adults, but then go much further than that. The important thing to understand is that right now Medicaid is an open-ended program that grows as need does. But, starting in 2020, the Senate bill would turn it into one that’s capped on a per person basis and only grows at a certain rate of inflation; at first that would be by medical inflation (which is actually lower than Medicaid’s projected growth), but then, in 2025, it’d be by the even lower overall rate of inflation. The result, according to the CBO, is that Medicaid spending would be 26 percent lower in 2026 than it would otherwise be, and 35 percent lower in 2036.
Republicans, for their part, have responded to this in what can only be called Orwellian fashion. President Trump has argued that these cuts aren’t really cuts because Medicaid spending would still grow, just not as much. Vice President Pence has said that reducing Medicaid spending by $772 billion the next decade would “strengthen and secure Medicaid for the neediest in our society.” And Health and Human Services Secretary Tom Price has outright claimed that “there are no cuts to the Medicaid program” since states would be given “greater flexibility” to find efficiencies. That might be convincing to some Republicans, but not, as the New York Times’ Margot Sanger-Katz points out, to the 40 percent of low-income adults, 60 percent of kids with disabilities, and 64 percent of nursing home residents who are covered by Medicaid. These are poor and sick people who can’t afford any other care. Whether giving less money to Medicaid than we said we would is taking money away from Medicaid — and it is — is a semantic game that doesn’t change the fact that there will be far less money for them.
Health care is complicated, but the Senate bill isn’t. The non-Medicaid parts would make things as bad as they were before Obamacare, and the Medicaid parts would make them even worse than that. People are focused on the first half of that because Senate Republicans have come up with new and more far-reaching ways to undermine Obamacare’s protections for people with preexisting conditions to the point of meaningless — insurers and actuaries agree on that — but the second half of it is no better. It would transform Medicaid from a program that makes sure the most vulnerable people in society can get care into one that might let them get care.
Meet the new Republican health-care plan, same as the old Republican health-care plan.