Mitch McConnell’s latest hastily scribbled blueprint for restructuring one-sixth of the American economy retains most of Trumpcare’s greatest hits: the controlled demolition of Medicaid as we’ve known it; steep cuts to federal subsidies for insurance; deregulatory measures that effectively eliminate protections for those with preexisting conditions; and tax breaks for the rich.
And the bill doesn’t seem to have changed political realities any more than it altered policy ones.
Nonetheless, after emerging from a meeting with GOP moderates Thursday, McConnell told reporters that the Senate will vote on the bill next week, as planned. So, it’s worth reviewing the legislation’s few new wrinkles.
Maine’s favorite “moderate” Susan Collins remains a “no” on advancing the bill to debate. Rand Paul still thinks subsidizing poor people’s health care is “crony capitalism.” If McConnell loses one more vote, this thing is dead. And it’s hard to see why Nevada’s Dean Heller — the most vulnerable GOP senator up for reelection in 2018 — would support this legislation, when he opposed the nearly identical previous draft so vehemently. Especially since Nevada’s Republican governor, Brian Sandoval, has suggested that the new bill still causes him “great concern.” So long as Sandoval opposes the legislation, it will be difficult for Heller to budge. After all, he probably doesn’t want to give his Democratic challenger the opportunity to say “even our Republican governor told Heller that bill would hurt Nevadans, and he voted for it, anyway!”
One ostensibly significant change: The initial bill’s largest tax breaks for wealthy individuals have been removed. On its face, this looks like a massive concession to the party’s moderate wing. In reality, it’s more of a concession to public-relations concerns than policy ones: Remember, the next bill in the GOP’s queue is a giant package of tax cuts for the rich. It won’t be difficult to throw the Obamacare taxes onto that fire. Several Republican lawmakers objected to the optics of cutting benefits for the poor and taxes on the rich simultaneously — virtually none object to doing both those things on principle; the modern GOP has no real place for those who do.
Further, the new draft adds a brand-new gift to affluent households — a provision allowing individuals to pay their insurance premiums with tax-advantaged health-savings accounts. This measure has the appearance of a universal government subsidy. But it’s functionally a tax credit that will deliver the lion’s share of its gains to high-income households. As the Center for American Progress’s Harry Stein explains.
That said, retaining Obamacare’s taxes on high earners (however temporarily) provides McConnell with $231 billion in new revenues to work with. The new bill invests $115 billion of that money into funding for opioid treatment ($45 billion) and state-based reforms ($70 billion). The latter is essentially a fund that states can use to mitigate the austerity imposed by the rest of the bill. But McConnell pockets the rest of the savings, ostensibly to dole it out in last-minute bribes to fence-sitting senators during the amendment process. As Matt Yglesias notes, the initial bill already left the Majority Leader with $312 billion to play with. Which is to say: If McConnell isn’t attached to retaining significant deficit reduction, he’ll have roughly $437 billion to spend on the pet projects of Trumpcare skeptics who agree to fall in line.
Critically, the bill leaves the first draft’s massive ($700 billion-plus) Medicaid cuts in place. The bill would begin unwinding Obamacare’s Medicaid expansion in 2021, while federal spending on the entire program would drop by 26 percent starting in 2026. The legislation tries to mitigate the most inhuman implications of those cuts by guaranteeing that children with “medically complex” disabilities will retain their coverage, and allowing states to access additional federal Medicaid funds during “public-health emergencies.” How such terms will be defined, in practice, is difficult to say. Regardless, the strongest case McConnell could make to moderates about the bill’s Medicaid provisions was, apparently, that they will never actually go into effect — an assurance that sounds a lot like a prediction that passing this bill will put Democrats back in power by 2020.
Finally, the one truly major change to the bill is an amendment that would further eviscerate protections for those with preexisting conditions while, quite possibly, sending the individual insurance market into a genuine death spiral. In a nod to Ted Cruz and Mike Lee’s crusade to roll back Obamacare’s regulatory requirements, the bill would allow insurers to deny coverage to people with preexisting conditions, while selling skimpy, high-deductible plans on the individual market — so long as they also offer at least one plan that complies with the Affordable Care Act’s regulations. Further, the new draft allows individuals to purchase skimpy, catastrophic coverage with federal tax credits. These two measures would almost certainly lead many younger, healthier people to opt out of comprehensive coverage, making the risk pools for the Obamacare-compliant plans disproportionately sick. That, in turn, would drive up the cost of comprehensive coverage, which would cause more young, healthy people to switch to the cheap, high-deductible plans, which would further drive up the cost of comprehensive coverage, until traditional insurance becomes unaffordable for the sick and unprofitable for insurers.
The bill does set aside a $200 billion fund to offset the costs of covering very sick enrollees, but most health-care experts believe that wouldn’t be nearly enough money to keep coverage affordable.
Notably, while the bill would give consumers the freedom to buy insurance that covers almost nothing, it denies that liberty to members of Congress: The legislation stipulates that the plans insurers sell to Ted Cruz, Mike Lee, and the rest of our representatives in D.C. must include comprehensive benefits. (This provision is supposedly only in the bill to make it comply with the rules of reconciliation.)
In short: This is a bill that only a Senate Majority Leader could (pretend to) love. And, as of this writing, it looks like most Senate Republicans aren’t interested in feigning much affection for Mitch McConnell’s hideous baby.