The New Republican Healthcare Bill Is Almost as Bad as Their Last One

By Robert Reich, Robert Reich's Facebook Page

14 July 17

enate Republican leaders just unveiled their newest attempt to repeal (and “replace”) the Affordable Care Act. It’s almost as bad as the one McConnell pulled because he couldn't muster 50 Senate votes for it. (The Congressional Budget Office had concluded that 22 million people would lose coverage under it.)

In this newer version:

1. Medicaid would still morph into a system of fixed per-person payments to the states – payments that wouldn’t keep up with the expected rise in healthcare costs. And the Medicaid expansion would still be rolled back. (These provisions would hurt so many lower-income and elderly people that Maine Senator Susan Collins, along with possibly several other Republican senators, are unlikely to go along.)

2. Insurers could offer health plans without the minimum benefits available under the Affordable Care Act. That means sicker people would sign up with insurers offering bigger benefits packages – driving up costs for those insurers and requiring them to jack up premiums, co-payments, and deductibles so high that sicker people couldn’t even afford them. (Another huge problem for Republican senators from states with large numbers of lower-income people.)

To address this concern, the Republican bill would create a fund to make payments to insurers for the costs of covering high-risk people enrolled in health plans on the exchanges. But the fund isn’t nearly big enough.

3. People could get tax credits to help pay for catastrophic health insurance plans, and could also use tax-favored health savings accounts. Republicans love to dole out tax credits. But lower-income Americans don’t have enough income to use them.

4. Like the previous bill, this would end the requirement that most Americans have health coverage. So younger and healthier people wouldn't have to be in the same insurance "pool" as older and sicker people. This would also raise premium costs for the older and sicker.

5. But here's the interesting thing. In a notable change, the bill would keep the two taxes imposed by the Affordable Care Act on people with high incomes: the 3.8 percent tax on investment income and the 0.9 percent payroll tax. The taxes apply to individuals with income over $200,000 and couples with income over $250,000.

What's going on here? Wasn't the whole purpose of this "repeal and replace" exercise to cut the taxes of the wealthy?

My guess is that Senate Republican leaders want to use the budget savings from this bill to allow them to pass an even bigger tax cut for wealthy Americans under the "reconciliation" rule requiring just 51 votes. So wealthy Americans would still come out way ahead.

The Congressional Budget Office will report on the new bill early next week. McConnell wants to take up his revised bill next week but he won’t move ahead if doesn’t have the votes to pass it. If the CBO finds that millions will lose their coverage -- and I'm almost certain the CBO will -- it's going to be hard for McConnell to round up the votes he needs.

What do you think?