Last week, the House of Representatives passed a bill to repeal and replace the Affordable Care Act. That was only the first act in a legislative drama that now moves to the Senate. It’s far too early to guess what the outcome will be, but one thing’s for sure: Republicans are making wildly optimistic promises on healthcare that they can’t possibly keep.
“We will have truly great healthcare!” President Trump tweeted on Friday.
“Premiums will be coming down,” he proclaimed at his victory rally in the White House Rose Garden. “Deductibles will be coming down.”
In an interview with Bloomberg News, he renewed his promise that any bill he signs will be “every bit as good on [covering] preexisting conditions as Obamacare.”
And Kevin McCarthy, the House Republican leader, added boldly that “nobody” will lose Medicaid under the bill. “We’re not taking a benefit away,” he said.
All those claims are half-true at best.
If the House bill becomes law, premiums will come down for some people, mostly young, healthy, affluent people — but they’ll rise for others, mostly the working poor.
The healthcare debate has already produced a political miracle: It has made Obamacare broadly popular for almost the first time in its seven-year existence.
Contrary to Trump, the House bill isn’t “every bit as good” on preexisting conditions as Obamacare. It removes the current law’s guarantee that people with preexisting conditions won’t have to pay higher premiums.
As for McCarthy’s claim that nobody will lose Medicaid benefits, that’s a bit of verbal trickery. Under the House bill, current Medicaid enrollees could probably keep their coverage (although there’s no explicit guarantee). But an estimated 14 million people who would qualify for Medicaid 10 years from now would be denied access to the program.
The Congressional Budget Office is expected to report soon that the new House bill, like the old House bill, will result in as many as 24 million fewer people with coverage than under current law.
Healthcare is complicated, as the president has learned, but some of this is simple arithmetic.
If you cut federal spending on health insurance, the result will not be the same amount of coverage at a lower price. There’s still no such thing as a free lunch.
Amid the frenzied negotiations of the last few months, it’s been easy to focus on small issues (like the $8 billion in extra funding that helped moderate Republicans get to yes) and forget the big ones. So it’s worth going back to the basic numbers.
Trump and GOP leaders want to cut federal spending on health insurance by more than a trillion dollars over 10 years. (The initial bill cut $1.2 trillion; the House voted without a CBO estimate for the new version, but it won’t be far off.)
Under the House bill, most of that money would go to a tax cut for households earning more than $250,000; the rest would reduce the federal deficit.
The biggest cost saving in the bill is a cut of $880 billion from the expansion of Medicaid that was an important part of Obamacare. That’s why the Medicaid rolls will be 14 million people smaller if the bill becomes law.
The second-biggest saving is a cut in subsidies for people who buy insurance on the individual marketplace. The bill would increase subsidies for individuals earning between $50,000 and $75,000 a year, making their insurance more affordable. At the same time, though, it would cut subsidies for people earning less than $50,000. That “would price millions of lower-income Americans out of their coverage,” conservative health expert Avik Roy wrote last week.
In sum: a big cut in spending, a big tax cut for the wealthy, a price cut for the lower-middle-class — and big burdens for the poor, especially if they’re middle-age or chronically ill.
Even some House Republicans acknowledged that their product didn’t keep all the promises they’ve made.
“This bill is highly imperfect, imperfect, OK?” said Rep. Mario Diaz-Balart (R-Fla.). “I don’t like it.” (He voted yes.)
House members say they hope the Senate will fix its flaws — but that won’t be easy. The House bill’s huge cuts in taxes and spending aren’t optional features; they’re the whole point.
One of Trump’s early campaign advisors, Sam Nunberg, said the tax cut was one of the president’s top goals. “On healthcare, what he wanted was the taxes out and he wanted to get rid of the mandate [requiring people to buy coverage], but he wanted to keep all the goodies,” Nunberg told the Washington Post.
That’s impossible, of course. (The no free lunch rule again.) But the healthcare debate has already produced a political miracle: It has made Obamacare broadly popular for almost the first time in its seven-year existence. The Kaiser Family Foundation’s most recent poll showed that 48% of Americans want to keep the existing law and improve it; only 41% want to repeal and replace it.
Equally important, Trump and his party own the problem now. The same poll found that 64% of the public, including most Republicans, believe the president and the GOP are responsible for any problems with the ACA from now on.
In 2010, Republicans succeeded at the polls by dubbing the unpopular new law “Obamacare.” Now Trump’s opponents have begun deriding the new, proposed version as “Trumpcare.” If that catches on, 2018 might be a good year for Democrats after all.
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