Shifting Dollars From Poor To Give To the Rich Is a Key Part of the Senate Health Bill

(THIS ARTICLE IS COURTESY OF THE NEW YORK TIMES)

Senate Majority Leader Mitch McConnell at his office on Thursday, when the Republican health plan was made public. CreditDoug Mills/The New York Times

The Affordable Care Act gave health insurance to millions of Americans by shifting resources from the wealthy to the poor and by moving oversight from states to the federal government. The Senate bill introduced Thursday pushes back forcefully on both dimensions.

The bill is aligned with long-held Republican values, advancing states’ rights and paring back growing entitlement programs, while freeing individuals from requirements that they have insurance and emphasizing personal responsibility. Obamacare raised taxes on high earners and the health care industry, and essentially redistributed that income — in the form of health insurance or insurance subsidies — to many of the groups that have fared poorly over the last few decades.

The draft Senate bill, called the Better Care Reconciliation Act, would jettison those taxes while reducing federal funding for the care of low-income Americans. The bill’s largest benefits go to the wealthiest Americans, who have the most comfortable health care arrangements, and its biggest losses fall to poorer Americans who rely on government support. The bill preserves many of the structures of Obamacare, but rejects several of its central goals.

Mitch McConnell, the Senate majority leader, in the Capitol on Thursday.CreditSaul Loeb/Agence France-Presse — Getty Images

Like a House version of the legislation, the bill would fundamentally change the structure of Medicaid, which provides health insurance to 74 million disabled or poor Americans, including nearly 40 percent of all children. Instead of open-ended payments, the federal government would give states a maximum payment for nearly every individual enrolled in the program. The Senate version of the bill would increase that allotment every year by a formula that is expected to grow substantially more slowly than the average increase in medical costs.

Continue reading the main story

Avik Roy, the president of the Foundation for Research on Equal Opportunity, and a conservative health care analyst, cheered the bill on Twitter, saying, “If it passes, it’ll be the greatest policy achievement by a G.O.P. Congress in my lifetime.” The bill, he explained in an email, provides a mechanism for poor Americans to move from Medicaid coverage into the private market, a goal he has long championed as a way of equalizing insurance coverage across income groups.

High-income earners would get substantial tax cuts on payroll and investment income. Subsidies for those low-income Americans who buy their own insurance would decline compared with current law. Low-income Americans who currently buy their own insurance would also lose federal help in paying their deductibles and co-payments.

The bill does offer insurance subsidies to poor Americans who live in states that don’t offer them Medicaid coverage, a group without good insurance options under Obamacare. But the high-deductible plans that would become the norm might continue to leave care out of their financial reach even if they do buy insurance.

The battle over resources played into the public debate. Mitch McConnell, the Senate majority leader, said the bill was needed to “bring help to the families who have been struggling with Obamacare.” In a Facebook post, President Barack Obama, without mentioning the taxes that made his program possible, condemned the Senate bill as “a massive transfer of wealth from middle-class and poor families to the richest people in America.”

In another expression of Republican principles, the bill would make it much easier for states to set their own rules for insurance regulation, a return to the norm before Obamacare.

Under the bill, states would be able to apply for waivers that would let them eliminate consumer protection regulations, like rules that require all health plans to cover a basic package of benefits or that prevent insurance plans from limiting how much care they will cover in a given year.

Where Senators Stand on the Health Care Bill

Senate Republican leaders unveiled their health care bill on Thursday.

States could get rid of the online marketplaces that help consumers compare similar health plans, and make a variety of other changes to the health insurance system. The standards for approval are quite permissive. Not every state would choose to eliminate such rules, of course. But several might.

“You can eliminate all those financial protections,” said Nicholas Bagley, a law professor at the University of Michigan. “That would be huge.”

Americans with pre-existing conditions would continue to enjoy protection from discrimination: In contrast with the House health bill, insurers would not be allowed to charge higher prices to customers with a history of illness, even in states that wish to loosen insurance regulations.

But patients with serious illnesses may still face skimpier, less useful coverage. States may waive benefit requirements and allow insurers to charge customers more. Someone seriously ill who buys a plan that does not cover prescription drugs, for example, may not find it very valuable.

A protester being removed from outside the office of Mitch McConnell on Thursday.CreditSaul Loeb/Agence France-Presse — Getty Images

There are features that would tend to drive down the sticker price of insurance, a crucial concern of many Republican lawmakers, who have criticized high prices under Obamacare. Plans that cover fewer benefits and come with higher deductibles would cost less than more comprehensive coverage.

But because federal subsidies would also decline, only a fraction of people buying their own insurance would enjoy the benefits of lower prices. Many middle-income Americans would be expected to pay a larger share of their income to purchase health insurance that covers a smaller share of their care.

The bill also includes substantial funds to help protect insurers from losses caused by unusually expensive patients, a measure designed to lure into the market those insurance carriers that have grown skittish by losses in the early years of Obamacare. But it removes a policy dear to the insurance industry — if no one else. Without an individual mandate with penalties for Americans who remain uninsured, healthier customers may choose to opt out of the market until they need medical care, increasing costs for those who stay in.

The reforms are unlikely to drive down out-of-pocket spending, another perennial complaint of the bill’s authors, and a central critique by President Trump of the current system. He often likes to say that Obamacare plans come with deductibles so high that they are unusable. Subsidies under the bill would help middle-income consumers buy insurance that pays 58 percent of the average patient’s medical costs, down from 70 percent under Obamacare; it would also remove a different type of subsidy designed to lower deductibles further for Americans earning less than around $30,000 a year.

Out-of-pocket spending is the top concern of most voters. The insurance they would buy under the bill might seem cheap at first, but it wouldn’t be if they ended up paying more in deductibles.

Mr. McConnell was constrained by political considerations and the peculiar rules of the legislative mechanism that he chose to avoid a Democratic filibuster. Despite those limits, he managed to produce a bill that reflects some bedrock conservative values. But the bill also shows some jagged seams. It may not fix many of Obamacare’s problems — high premiums, high deductibles, declining competition — that he has railed against in promoting the new bill’s passage.

Shifting Dollars From Poor to Rich Is a Key Part of the Senate Health Bill

(THIS ARTICLE IS COURTESY OF THE NEW YORK TIMES)

The Affordable Care Act gave health insurance to millions of Americans by shifting resources from the wealthy to the poor and by moving oversight from states to the federal government. The Senate bill introduced Thursday pushes back forcefully on both dimensions.

The bill is aligned with long-held Republican values, advancing states’ rights and paring back growing entitlement programs, while freeing individuals from requirements that they have insurance and emphasizing personal responsibility. Obamacare raised taxes on high earners and the health care industry, and essentially redistributed that income — in the form of health insurance or insurance subsidies — to many of the groups that have fared poorly over the last few decades.

The draft Senate bill, called the Better Care Reconciliation Act, would jettison those taxes while reducing federal funding for the care of low-income Americans. The bill’s largest benefits go to the wealthiest Americans, who have the most comfortable health care arrangements, and its biggest losses fall to poorer Americans who rely on government support. The bill preserves many of the structures of Obamacare, but rejects several of its central goals.

Like a House version of the legislation, the bill would fundamentally change the structure of Medicaid, which provides health insurance to 74 million disabled or poor Americans, including nearly 40 percent of all children. Instead of open-ended payments, the federal government would give states a maximum payment for nearly every individual enrolled in the program. The Senate version of the bill would increase that allotment every year by a formula that is expected to grow substantially more slowly than the average increase in medical costs.

Continue reading the main story

Avik Roy, the president of the Foundation for Research on Equal Opportunity, and a conservative health care analyst, cheered the bill on Twitter, saying, “If it passes, it’ll be the greatest policy achievement by a G.O.P. Congress in my lifetime.” The bill, he explained in an email, provides a mechanism for poor Americans to move from Medicaid coverage into the private market, a goal he has long championed as a way of equalizing insurance coverage across income groups.

States would continue to receive extra funding for Obamacare’s expansion of Medicaid to more poor adults, but only temporarily. After several years, states wishing to cover that population would be expected to pay a much greater share of the bill, even as they adjust to leaner federal funding for other Medicaid beneficiaries — disabled children, nursing home residents — who are more vulnerable.

Mitch McConnell, the Senate majority leader, in the Capitol on Thursday.CreditSaul Loeb/Agence France-Presse — Getty Images

High-income earners would get substantial tax cuts on payroll and investment income. Subsidies for those low-income Americans who buy their own insurance would decline compared with current law. Low-income Americans who currently buy their own insurance would also lose federal help in paying their deductibles and co-payments.

The bill does offer insurance subsidies to poor Americans who live in states that don’t offer them Medicaid coverage, a group without good insurance options under Obamacare. But the high-deductible plans that would become the norm might continue to leave care out of their financial reach even if they do buy insurance.

The battle over resources played into the public debate. Mitch McConnell, the Senate majority leader, said the bill was needed to “bring help to the families who have been struggling with Obamacare.” In a Facebook post, President Barack Obama, without mentioning the taxes that made his program possible, condemned the Senate bill as “a massive transfer of wealth from middle-class and poor families to the richest people in America.”

In another expression of Republican principles, the bill would make it much easier for states to set their own rules for insurance regulation, a return to the norm before Obamacare.

Where Senators Stand on the Health Care Bill

Senate Republican leaders unveiled their health care bill on Thursday.

Under the bill, states would be able to apply for waivers that would let them eliminate consumer protection regulations, like rules that require all health plans to cover a basic package of benefits or that prevent insurance plans from limiting how much care they will cover in a given year.

States could get rid of the online marketplaces that help consumers compare similar health plans, and make a variety of other changes to the health insurance system. The standards for approval are quite permissive. Not every state would choose to eliminate such rules, of course. But several might.

“You can eliminate all those financial protections,” said Nicholas Bagley, a law professor at the University of Michigan. “That would be huge.”

Americans with pre-existing conditions would continue to enjoy protection from discrimination: In contrast with the House health bill, insurers would not be allowed to charge higher prices to customers with a history of illness, even in states that wish to loosen insurance regulations.

But patients with serious illnesses may still face skimpier, less useful coverage. States may waive benefit requirements and allow insurers to charge customers more. Someone seriously ill who buys a plan that does not cover prescription drugs, for example, may not find it very valuable.

Photo

A protester being removed from outside the office of Mitch McConnell on Thursday.CreditSaul Loeb/Agence France-Presse — Getty Images

There are features that would tend to drive down the sticker price of insurance, a crucial concern of many Republican lawmakers, who have criticized high prices under Obamacare. Plans that cover fewer benefits and come with higher deductibles would cost less than more comprehensive coverage.

But because federal subsidies would also decline, only a fraction of people buying their own insurance would enjoy the benefits of lower prices. Many middle-income Americans would be expected to pay a larger share of their income to purchase health insurance that covers a smaller share of their care.

The bill also includes substantial funds to help protect insurers from losses caused by unusually expensive patients, a measure designed to lure into the market those insurance carriers that have grown skittish by losses in the early years of Obamacare. But it removes a policy dear to the insurance industry — if no one else. Without an individual mandate with penalties for Americans who remain uninsured, healthier customers may choose to opt out of the market until they need medical care, increasing costs for those who stay in.

The reforms are unlikely to drive down out-of-pocket spending, another perennial complaint of the bill’s authors, and a central critique by President Trump of the current system. He often likes to say that Obamacare plans come with deductibles so high that they are unusable. Subsidies under the bill would help middle-income consumers buy insurance that pays 58 percent of the average patient’s medical costs, down from 70 percent under Obamacare; it would also remove a different type of subsidy designed to lower deductibles further for Americans earning less than around $30,000 a year.

Out-of-pocket spending is the top concern of most voters. The insurance they would buy under the bill might seem cheap at first, but it wouldn’t be if they ended up paying more in deductibles.

Mr. McConnell was constrained by political considerations and the peculiar rules of the legislative mechanism that he chose to avoid a Democratic filibuster. Despite those limits, he managed to produce a bill that reflects some bedrock conservative values. But the bill also shows some jagged seams. It may not fix many of Obamacare’s problems — high premiums, high deductibles, declining competition — that he has railed against in promoting the new bill’s passage.

The Senate’s Health Care Secrecy Is a Breathtaking Contempt for Democracy

(THIS ARTICLE IS COURTESY OF SLATE POLITICS)

The Senate’s Health Care Secrecy Is a Breathtaking Contempt for Democracy

Millions will suffer, for a tax cut.

170613_POL_AHCA-RadicalProcedures
Senate Majority Leader Mitch McConnell speaks to members of the media after the weekly Senate Republican Policy Luncheon at the Capitol May 9.

Alex Wong/Getty Images

While much of Washington fixates on Donald Trump and his scandals, a small band of Senate Republicans is working—in secret—on a bill that would slash health insurance for tens of millions of Americans and jeopardize access for millions more. And they’re doing this on a so-called fast track meant to preclude debate. The reason for this rushed process? To obscure the obvious: that at heart, the American Health Care Act is little more than a massive tax cut for the wealthiest Americans.

Jamelle BouieJAMELLE BOUIE

Jamelle Bouie is Slates chief political correspondent.

Once the working group emerges from its cloister, the bill will be scored by the Congressional Budget Office, and then—in a sharp break with procedure—bypass the committee process and go straight to the floor without a public hearing. There are even suggestions that Senate Majority Leader Mitch McConnell will use legislative gamesmanship to avoid debate entirely, so Republicans can pass the bill without any discussion of its contents and provisions. As Paul Ryan did in the House of Representatives, McConnell intends to restructure one-sixth of the American economy with as little input as possible, freezing out experts, industry representatives, and Democratic lawmakers. This, despite overwhelming opposition from the public; in one recent poll, just 23 percent of respondents said they approved of the Republican health care bill.

And what will the public get if and when the final version of the bill is passed into law? Millions of Americans will either lose their health insurance, see massive new costs, or face added obstacles, from “lifetime” caps on care to limits based on pre-existing conditions.

There’s no indication Republicans are thinking deeply about free market reforms to the American health care system. But let’s just say they are. Perhaps a drastically less-regulated insurance market is worth the cost to ordinary individuals and families. If that’s the case, then Republicans owe the country both honesty and transparency. It will get neither. Instead, every indication is that the GOP will push through with a process that holds deliberation in contempt. That’s not to say Republicans aren’t responding to someone—there are groups, like the Republican base, that want this bill—but the broad public opposes the effort.

As it stands, there’s a chance the Senate health care bill could pass before the July 4 holiday. Compare this to the process behind the Affordable Care Act. It took most of 2009 for Democrats to produce a bill: months of negotiation—including a summer of talks between Democratic and Republican senators—that involved debate and input, as lawmakers produced drafts, defended proposals, and sold their plan to the public. Congress saw testimony from patients and other ordinary people, and citizens were able to lobby lawmakers with their input.

It was as open a process as possible, and while Democrats weren’t immune to misleading rhetoric (“if you like your plan, you can keep it”), the final law wasn’t a surprise. It did what Democrats and the president said it would. And the party was proud of their work. “This is a big fucking deal,” Vice President Joe Biden famously whispered.

None of this is true of Republicans and the AHCA. Theirs is a closed, secretive process. There are no drafts, no inkling of the plan. No speeches defending its major planks or hearings where lawmakers and experts hash out concerns. When pressed with questions, Republicans from the Senate working group refuse to answer. Indeed, asked if it was important to bring a bill to the public, Republicans say, in effect, no. “Well, I think we’re not worried so much about that as we are getting it together so we can get a majority to vote for it,” said Sen. Orrin Hatch.

This might be tolerable if Republicans were open about the effects of their plan. But they aren’t. They’re lying. Tom Price, secretary of health and human services, insists that the bill preserves Medicaid, telling CNN, “We believe the Medicaid population will be cared for in a better way under our program because it will be more responsive to them.” In reality, the bill phases out the Medicaid expansion and makes additional cuts, slashing 14 million people from the program. President Trump has made assurances that the bill “guarantees” coverage for people with pre-existing conditions, which just isn’t true. Vice President Mike Pence promises “a dynamic national health insurance marketplace that lowers costs, increases quality and gives more choices to working families.” Given the massive coverage losses projected under the GOP’s health care plan, there’s no evidence that anything approaching that promise is on the horizon.

Republicans are pushing forward on an unpopular bill that, by every independent account, will harm millions of Americans. To justify this sprint, the White House is actively sabotaging insurance markets while telling the public that the Affordable Care Act is failing. And in taking this course, they’ve shown a breathtaking contempt for democracy, insulating themselves from any political pressure, lying about the policies in question, and hiding this bankrupt process from the country.

This cowardly and factional governing—meant to satisfy a small minority of Republican Party backers, not the public at large—will likely backfire. Given Democratic anger, the president’s unpopularity, and broad discontent with the bill in question, there are decent odds this story ends with a Democratic victory in the 2018 elections and a chance to repair the damage. But between now and then, real people will suffer. Real people will have to decide if they can afford continued treatment. Real people will die. And as far as anyone can tell, the point of all of this—the secrecy and dishonesty and likely pain—is tax cuts. That’s it.