News Reporter: Wonkbook: The Senate health-care bill might be less populist than Marie Antoinette

Wednesday 28 June 2017

Wonkbook: The Senate health-care bill might be less populist than Marie Antoinette

The latest economic and domestic policy from Wonkblog

Republican presidential candidate Donald Trump greets supporters after his rally at Ladd-Peebles Stadium on August 21, 2015 in Mobile, Alabama. (Mark Wallheiser/Getty Images)

By Matt O'Brien

The Senate's health-care bill might be too much for even Marie Antoinette.

After all, about the only way it could be more regressive is if it took the cake a certain French queen wanted the poor to eat for dinner and gave it to the rich for dessert. Or, say, cut Medicaid and middle-class health insurance subsidies so much that 22 million fewer people have health insurance — all so that the government could afford to cut the capital gains tax for households making $250,000 or more.

Oh, wait. That last one is actually what the Senate bill would do.

Now, there are three ways to think about the Senate bill. The first is that it would take health-care from the poor and middle-class to pay for tax cuts for the rich at a time of already historic inequality. The second is that it would make insurance more expensive for everyone and less useful for anyone who is sick. And the third is that it would hurt President Trump's working-class base the most. Other than that, how were the tax cuts, Mrs. Lincoln?

It's really pretty simple. The Senate bill would, over the course of the next decade, cut Obamacare's health insurance subsidies by $408 billion and Medicaid by $772 billion all to pay for $700 billion of tax cuts, nearly half of which the nonpartisan Tax Policy Center says would go to the top 1 percent of households. Not only that, but the fact that it would only peg the value of its remaining subsidies to higher-deductible plans means that a lot of people would be pushed into them. They couldn't afford anything else. On an apples-to-apples basis, the nonpartisan Kaiser Family Foundation estimates that the Senate bill would increase the cost of a "silver" plan that covers 70 percent of expected medical costs by an average of 74 percent over the next three years — and more for the type of older, poorer people who overwhelmingly went for Trump.

Let them pay a third of their income in deductibles is the new "Let them eat cake."

Chart of the day

By Kim Soffen

15 million fewer people would be covered by Medicaid in 2026 if the Senate health-care bill passes, according to a report put out by the nonpartisan Congressional Budget Office on Monday.

The bill sharply reduces federal funding for the Affordable Care Act's Medicaid expansion. If states wanted to keep the expansion, they'd have to as much as quintuple their spending on those enrollees.

That leaves states with a difficult choice, according to Robin Rudowitz of the Kaiser Family Foundation. They can cut spending or raise taxes in other aspects of their budget, though "it's a really big gap to fill." They could limit who's eligible for Medicaid — effectively undoing the expansion — or limit what benefits Medicaid enrollees get.

And maintaining that coverage will get more difficult over time, as the federal government gives states less money for the program. Aviva Aron-Dine, a senior fellow at the Center on Budget and Policy Priorities, said she expects states to be able to keep the expansion until 2022 or 2023. "As the costs mount, they'll have to discontinue expansion. It's just a question of timing," Aron-Dine said.

Read more on Wonkblog.

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