After weeks of lock-down secrecy, Senate Republicans have finally released their version of TrumpCare.
It's called the Better Care Reconciliation Act (BCRA), and it's quite a sight to behold. Apparently realizing this is their one shot to kill ObamaCare and remake the whole health-care safety net, the Republicans seemed to have crammed every last ounce of cruelty and hypocrisy they could muster into the bill.
Here's a rundown of the BCRA's greatest hits.
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1. It's basically a plan to destroy Medicaid. That's the government program that provides health insurance for low-income Americans. It covers more people than Medicare, most of its beneficiaries are children, the elderly, and the disabled, and it pays the bulk of Americans' long-term care and nursing home costs.
ObamaCare massively expanded eligibility for the program, and the BCRA would phase that expansion out by 2024.
But the BCRA would also massively cut the pre-ObamaCare Medicaid program as well. It would force states to spend less Medicaid dollars per person. (Though there's a carve-out for the least-populated states, where per person Medicaid costs are the highest.) And it would give states the option of imposing work requirements on beneficiaries.
But most importantly, it would first cap the program's growth rate to the inflation rate in medical prices, then change it to the inflation rate for the entire economy in 2025. This is a gargantuan cut in the share of spending the federal government was expected to contribute in the future — far larger than the 25-percent cut envisioned by the House GOP.
Finally, the BCRA also drops the income eligibility threshold for premium subsidies to zero. That's significant because, under ObamaCare, you didn't get the subsidies if you were poor enough, because Medicaid would step in. So in a sense, the BCRA is really a plan to slowly strangle Medicaid and replace it with subsidies to buy private coverage.
Which brings us to the next point …
2. Its subsidies for private insurance premiums are terrible. ObamaCare included subsidies to help people afford the premiums on the state-based insurance exchanges it created. And one of ObamaCare's big problems is that these subsidies are too skimpy. The BCRA's subsidies would be even skimpier.
Instead of phasing out at 400 percent of the federal poverty line, like they do under ObamaCare, the BCRA's subsidies would phase out at 350 percent. More than that, though, it would rejigger the formula that calculates subsidies for everyone: Americans at all income levels from 0 to 400 percent of the federal poverty line would often be expected to pay a bigger share of their premiums out of pocket. Their subsidies would also be benchmarked to significantly less generous coverage plans than under ObamaCare, with deductibles that could skyrocket by as much as 60 percent. Americans will basically have to pay much more for worse health insurance.
This obviously contradicts all the promises that Republicans and President Trump have made on the issue. It's also worth noting that Trump's own base — older Americans in rural areas — will be the people hit hardest by these cuts.
3. All this pays for massive tax cuts for the wealthy. You can see this in the Congressional Budget Office's score of the House version of TrumpCare. The BCRA is similar enough — it keeps virtually all the House's tax cuts, and its Medicaid cuts are deeper over the long run — that the CBO's analysis generally applies to it, too. The House plan would cut Medicaid by $834 billion and premium subsidies by $276 billion over 10 years. Then it would cut taxes on employers, big medical businesses, and wealthy Americans by $874 billion over the same period, with a little change left over for deficit reduction. In broad strokes, that's what the Senate version would do too (its own CBO analysis won't be out till early next week).
But what's really amusing is that the biggest cut in the BCRA is to a capital gains tax. It would only apply to people who earn more than $200,000 annually and it would be retroactive. So it can't even be justified as an incentive to boost economic growth.
In other words, the whole bill is basically a giant giveaway to the wealthy, paid for by cutting health care to the poor.
4. It would hypocritically resurrect insurer "bailouts." The Senate bill would create funds to help insurance companies provide coverage when the individual markets are unstable. It would allocate $50 billion between 2018 and 2021 to "fund arrangements with health insurance issuers to address coverage and access disruption and respond to urgent health-care needs within states." It would allot another $62 billion in grants that states can apply for between 2019 and 2026 for similar purposes.
On the policy merits, this is actually a good idea. But it's also utterly brazen hypocrisy on the Republicans' part. ObamaCare created similar mechanisms for stabilizing insurers' finances, but the GOP insisted on stripping them out in 2015 on the grounds that they were a "bailout" for the insurance industry. That made rising premiums worse — which Republicans have since used to justify the need to repeal and replace ObamaCare. It's galling that they'd try to sneak this "bailout" back into their own bill.
5. It brazenly thumbs its nose at Senate rules. To pass the BCRA with a simple majority vote, as opposed to a filibuster-proof 60 votes, the GOP is relying on a procedural gambit called reconciliation. Bills passed by reconciliation have to limit themselves to tax and spending changes that meaningfully affect the budget.
Much of the BCRA meets this requirement. But it also includes waivers that would allow states to get out of any number of ObamaCare's regulations: What benefits insurance plans must cover, the actuarial value of those plans, and even whether a state has to have an insurance exchange at all. All of which seems to clearly fall afoul of reconciliation's rules.
So this is another example of the GOP's unbelievable chutzpah. But it's also arguably the biggest existential threat to the BCRA.
Ultimately, the Senate parliamentrian will have to rule on whether the waiver changes can be included. And they'll be under immense pressure from Republicans to allow them. But the parliamentarian might not. And the waivers were crucial to passing TrumpCare through the House. Without them, it's unclear if the House and Senate could agree on a final version, or even if the BCRA could make it through next week's Senate vote. Either way, it would be very fitting if the audacity of the bill ultimately did it in.
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