Republicans know they want to cut taxes on the wealthy and corporations, but they don’t know how to pay for their plan. As we discussed in some detail on Monday, that poses a major procedural challenge for GOP policymakers, leaving them with limited options.
Yesterday in the Senate, Republicans apparently made a decision.
To help pay for the GOP tax bill, Republican Senate leaders announced Tuesday that they plan to repeal the Affordable Care Act’s requirement that Americans maintain health coverage. […]
“We’re optimistic that inserting the individual mandate repeal (into the tax bill) would be helpful,” Senate Majority Leader Mitch McConnell, R-Ky., told reporters after a caucus meeting.
Helpful for whom? In this case, the answer is obvious: the real beneficiaries are Republicans desperate to pass tax cuts for people who don’t need them.
There’s no great mystery as to what’s driving the GOP’s motivations on this. The party has long opposed the individual mandate in “Obamacare,” and by scrapping the policy, Republicans will have an additional $338 billion over the next decade to pay for more tax breaks. For Donald Trump and his allies, it’s the best of both worlds: the GOP is gutting the health care law they love to hate, and using the money to cut taxes on millionaires, billionaires, and corporations.
But the details matter: the Congressional Budget Office has already told Congress that repealing the ACA’s individual mandate will destabilize the insurance market, force many consumers to pay higher premiums, and end coverage for 13 million Americans over the next 10 years.
Indeed, the reason this move would save $338 billion is because the federal government would be paying less to provide coverage for millions of families.
What we’re left with is practically a caricature of Republican policymaking: under the Republican tax plan, the rich would pay less, many in the middle class would pay more, millions would lose their health care benefits in order to help finance tax breaks for the wealthy, and many who keep their coverage would end up facing higher costs.
And it’s likely to pass anyway – because Republicans have convinced themselves that this will make the party more popular with voters.
To appreciate the significance of the ACA’s individual mandate, keep the “three-legged stool” in mind. The metaphor was common when the Affordable Care Act was taking shape, and now that GOP policymakers are targeting the mandate, it’s probably a good time for a refresher.
Let’s say “Obamacare” was never even introduced and you wanted to reform the system. Let’s also say you started with the proposition that Americans with pre-existing conditions need protection and shouldn’t face discrimination based on previous ailments – a position with broad, bipartisan support. You could simply require insurers to cover those with pre-existing conditions, but that would cause prices to spike.
So, to prevent escalating costs, you’d want to expand the pool of consumers in the insurance market to include everyone, young and old, health and unhealthy. But bringing everyone into the system may impose economic burdens on some who’d struggle to pay for coverage, so you’d also want to provide subsidies to help those Americans pay for their insurance.
What I’ve just described is the Affordable Care Act in a nutshell: (1) guarantees for those with pre-existing conditions; (2) a mandate to control costs; and (3) subsidies to help people pay for their health security. Remove one leg from the three-legged stool, and the system struggles. When writing the law, Democrats were well aware of the fact that the mandate wasn’t popular, but health care policymaking is about making difficult choices, and this provision was necessary to make the other provisions work.
Whether GOP officials fully understand this is unclear, but what is clear is that many of them don’t appear to care. The principal goal is passing massive tax breaks, and if undermining the health care system brings them closer to their objective, it’s a price they’re willing to pay.