With the release of the Senate’s “Better Care Reconciliation Act of 2017 (BCRA),” the public finally gets a glimpse of legislation crafted in utter secrecy for the past two months, and now we know why. Despite the fanfare and feigned earnestness of the upper chamber’s efforts to improve on the “mean” House-passed American Health Care Act (AHCA), the Senate bill would be disastrous for low-income families, patients with pre-existing conditions, children, and the aged, while undermining health care security for virtually everyone else.
As with the House bill, the Senate bill is still, in essence, a massive tax cut for primarily wealthy individuals at the expense of people on Medicaid, the safety net program established in 1965 that covers 77 million people and half of all births. Hundreds of billions of dollars are cut from that program to fund repeal of not just health care-related taxes under the Affordable Care Act (ACA) but those on high-income households and investors as well, and pays for this by cutting Medicaid by hundreds of billions of dollars.
While the Senate bill purports to phase in repeal of the ACA’s Medicaid expansion more slowly than the House, the difference is fairly trivial. Under the House bill, the enhanced federal match for expansion enrollees would be reduced when they cycle off of Medicaid program, which would work to eliminate the enhanced expansion match in three to four years. The Senate bill foregoes this subtlety and simply phases down the enhanced match by 2024. The net effect is essentially the same.
With regard to the structural reforms to Medicaid, they have nothing to do with the ACA and everything to do with extreme conservative ideology. On this front, the Senate bill is decidedly worse than the House’s by capping federal payments to states for Medicaid more aggressively than the AHCA would in later years. This means more costs passed to states and, eventually, low-income consumers, with inevitable restrictions on coverage and access to care down the road.
If you are a safety net hospital – or really just about any hospital – these Medicaid cuts pose an existential threat. These institutions have seen their uncompensated care rates decline considerably since passage of the ACA, and those numbers are going to go back up. Worse, expansion states will see disproportionate share hospital (DSH) funding, which helps defray the costs of delivering care to the uninsured, cut drastically and permanently. Meanwhile, non-expansion states get to keep their DSH dollars, even though repeal of the Medicaid expansion has no impact on them. Go figure.
Republican Senators, mainly in expansion states, who have bemoaned Medicaid cuts’ impact on efforts to combat the opioid epidemic, get a nice little present from leadership: the $45 billion in the House bill included to help states wage this battle is cut to $2 billion. Another cluster of Republicans, Senators Murkowski of Alaska and Collins of Maine, have expressed opposition to cutting funding for Planned Parenthood. Leadership’s nod to their concerns? Bupkis: the House bill’s defunding of primary care for women is still there.
On the commercial coverage side of the equation, disruptions and barriers to care are equally egregious. The Senate bill’s tax subsidy regime is a stingy departure from the ACA’s, with individuals over the age of 60 seeing their premium obligations almost triple (yes, the “age tax” is alive and well in BCRA). Virtually everyone would pay more under the Senate bill than the ACA, and for much skimpier coverage. Subsidies under the Senate bill would only buy a plan covering 58 percent of medical costs versus 70 percent in the ACA. That means people living in poverty will see deductibles upwards of $7000, which they clearly cannot afford. So, then, whither the cost-sharing relief under the ACA for these folks? Gone by 2020.
On this point, several Republicans have repeatedly asserted they will only support Medicaid cuts if individuals dropped from the program have a stable alternative source of coverage. One of the most curious things about the Senate bill is that it will take 10-15 million people off of a program that has provided stable, low-cost coverage to working families for over a half century (Medicaid) and offer them, instead, a more expensive, skimpier, and far less stable option in the ACA Exchanges, which Republicans have so frequently criticized as “failing.”
And please be clear, despite the frequent, invalid claim that Medicaid coverage does not improve people’s health, a New England Journal of Medicine article published on Tuesday definitively debunks this myth. All forms of coverage demonstrate meaningful benefits to enrollees, including chronic disease management, wellbeing, mortality, and financial security, and the benefits of Medicaid are better documented than those of commercial insurance. But you don’t have to ask the New England Journal, just ask the enrollees.
For patients with pre-existing conditions and other vulnerable populations, while Senate Republicans did jettison the much-maligned MacArthur Amendment that allowed states to waive essential health benefits (EHBs) and other requirements, they simply shifted that function to another policy: section 1332 waivers. Those statewide exemptions, initially narrowly constructed under the ACA, would no longer be restricted to states that demonstrate comparable coverage at equivalent cost. States that receive these waivers can rescind a variety of crucial protections including EHBs and, by extension, the prohibition on coverage caps that are so vital to people with preexisting conditions.
There is some credit we can give the Senate’s bill. The ACA established three “premium stabilization” programs to help bring down premiums as the commercial insurance market reforms were implemented. Unfortunately, Republicans blocked full funding for two of them – risk corridors and reinsurance – and the latter is currently subject to a federal court case launched by House Republicans and the whimsy of President Trump. BCRA provides over $100 billion in funding for policies like this through 2026, with some of the funding earmarked for reinsurance. This is the type of reasonable policy that could garner bipartisan approval, if only Republicans would be willing to support it outside the context of this otherwise cantankerous bill.
Regardless, there are still many of us who hope, still, that health care – an issue where, perhaps above all others, we should be able to put aside partisan, ideological differences – can be a place where Democrats and Republicans work together to examine the evidence and make improvements to our current system. Whether BCRA passes or fails, that’s still going to be urgently needed.