New Republican health care plan focuses on tax cuts, Medicaid cuts

The Senate is expected to vote in a week on a massive overhaul of the American health care system. After weeks of secretive deliberations, we can finally read what Republicans have in mind.

Senate Republicans have unveiled a draft of their legislation to revamp the government’s role in the nation’s health care system, a proposal that includes big reductions to Medicaid, eliminates the Obamacare mandate requiring individuals to purchase insurance and offers tax credits to help people afford insurance while slashing taxes for the wealthy.

The major change to health care comes in the form of Medicaid. The bill winds down the expanded Medicaid program under Obamacare after 2020 – a longer timeline than the House health care bill that was passed in May. But it also makes deeper cuts to the program in the long run, by 2025, through changing the federal funding allocation formula for states to receive fewer federal dollars for Medicaid recipients.

The 142-page bill, which is being described as a “discussion draft,” is online in its entirety here. (It is, fortunately, searchable.)

Scrutinizing any health care bill should always start with the same question: what is the problem the proposal intends to solve? In this case, GOP senators appear to be working from the premise that the nation needs a big tax cut.

And so, at its core, this new Republican legislation is effectively an income-redistribution plan: it intends to cut Medicaid deeply, and apply the bulk of those saving to tax breaks.

As for the details, we’ll have a better sense of the projected impact of the bill – which GOP senators have ironically called the “Better Care Reconciliation Act of 2017” – after the Congressional Budget Office releases a score, which is expected early next week, just a few days before the scheduled vote. But in the meantime, here are some tidbits to keep in mind:

* I suspect the CBO’s score will show some drop in premiums under this bill, but that will largely be the consequence of worse insurance. Under the Republican plan, consumers will have worse coverage, which will help them pay less.

* On a related note, deductibles, which Trump vowed to cut, will almost certainly go up. It’s part of the point of the legislation: Republicans want to shift more of the health care cost burden onto consumers.

* Planned Parenthood – which, full disclosure, my wife works for – will be defunded under this bill.

* The individual mandate and its related penalty, an important part of the Affordable Care Act, will be eliminated and, as best as I can tell, it would not be replaced with something comparable. The effects on the system would be considerable and unpleasant, and I imagine insurers will be pushing back aggressively against this change.

* While the House bill would offer consumers tax credits for health insurance based on age, which is crazy, the Senate bill, like “Obamacare,” provides credits based on income. Unlike the ACA, however, the benefit wouldn’t be a direct subsidy to the consumer.

* Unlike the House bill, it looks like the Senate bill would not let states opt out of protections for Americans with pre-existing conditions – but the Senate version does weaken essential health benefits, which would end up hurting many who have pre-existing conditions.

My hunch is the CBO will find that this bill will significantly increase the number of uninsured Americans, but not as brutally as the House bill.

As for whether this regressive legislation can actually pass, there are plenty of provisions here for everyone – left, right, and center – to dislike, and I haven’t the foggiest idea why anyone would see this bill as an improvement over the status quo. Whether 51 members of the Senate – or 50 members and Vice President Pence – agree with this assessment will become clearer soon.

Health Care, Health Care Policy and Senate Republicans

New Republican health care plan focuses on tax cuts, Medicaid cuts