A few days ago the tweeter in chief demanded that Congress enact “a beautiful new HealthCare bill” before it goes into recess. But now we’ve seen Mitch McConnell’s latest version of health “reform,” and “beautiful” is hardly the word for it. In fact, it’s surpassingly ugly, intellectually and morally. Previous iterations of Trumpcare were terrible, but this one is, incredibly, even worse.
Before I get to what makes it worse, let’s talk about the one piece of the new bill that may sound like a step in the right direction, and why it’s largely a scam.
The original Senate bill got a lot of justified bad press for slashing Medicaid while offering big tax cuts for the rich. So this version rolls back some though by no means all of those tax cuts, which sounds like a concession to moderates.
At the same time, however, the bill would allow people to use tax-favored health savings accounts to pay insurance premiums. This effectively creates a big new tax shelter that mostly helps people with high incomes who (a) can afford to put a lot of money into such accounts and (b) face high marginal tax rates, and hence get big tax savings.
So this is still a bill that takes from the poor to give to the rich; it just does so with extra stealth.
Still, this tax shuffle does give McConnell a bit more money to play with. So how does he address the two big problems with the original bill — savage cuts to Medicaid and soaring premiums for older, less affluent workers? He doesn’t.
Aside from a few tweaks, those brutal Medicaid cuts are still part of the plan — and yes, they are cuts, despite desperate Republican attempts to pretend that they aren’t. The subsidy cuts that would send premiums soaring for millions are also still there.
The most important change in the bill, however, is the way it would effectively gut protection for people with pre-existing medical conditions. The Affordable Care Act put minimum standards on the kinds of policies insurers were allowed to offer; the new Senate bill gives in to demands by Ted Cruz that insurers be allowed to offer skimpy plans that cover very little, with very high deductibles that would make them useless to most people.
The effects of this change would be disastrous. Don’t take my word for it: It’s what the insurers themselves say. In a special memo, AHIP, the insurance industry trade group, warned against adopting the Cruz proposal, which would “fracture and segment insurance markets into separate risk pools,” leading to “unstable health insurance markets” in which people with pre-existing conditions would lose coverage or have plans that were “far more expensive” than under Obamacare.
Or to put it another way, this bill would send insurance markets into a classic death spiral. Republicans have been predicting such a spiral for years, but keep being wrong: All indications are that Obamacare, despite having some real problems, is stabilizing, and doing pretty well in states that support it. But this bill would effectively sabotage all that progress.
And let’s be clear: Many of the victims of this sabotage would be members of the white working class, people who voted for Donald Trump in the belief that he really meant it when he promised that there would be no cuts to Medicaid and that everyone would get better, cheaper insurance. So why are Republican leaders pushing this? Why is there even a chance that it might become law?
The main answer, I’d argue, is that what would happen if this bill passes — a big decline in the number of Americans with health insurance, a sharp reduction in the quality of coverage for those who keep it — is what Republicans have wanted all along.
And the conservative view has always been that Americans have health insurance that is too good, that they should pay more in deductibles and co-pays, giving them “skin in the game,” and thus an incentive to control costs.
So what we’re seeing here is supposed to be the last act in a long con, the moment when the fraudsters cash in, and their victims discover how completely they’ve been fooled. The only question is whether they’ll really get away with it.
We’ll find out very soon.
We’ll find out very soon.