There are a lot of moving parts in the health bill Senate Republicans just released, but the bigger picture is straightforward. Health care expert Larry Levitt condensed it to fewer than 140 characters:
Under the Senate bill, low-income people would pay higher premiums for bigger deductibles.— Larry Levitt (@larry_levitt) June 22, 2017
That’s it. That’s what this bill does. In fact, it does it over and over again. Policy after policy in the bill is built to achieve the same goal: making poor people pay more for less health insurance.
On page five, for instance, the bill makes a change that is both major and telling. It redefines the “applicable median cost benchmark plan.” This is the kind of provision that the press often skips over because it seems dull and technical. But to understand the vision behind this bill, you need to understand this change.
The Affordable Care Act didn’t simply set subsidies based on income. It also tied them to a “benchmark plan”: the second-cheapest plan in a person’s area that covers, on average, 70 percent of expected health costs. The ACA’s promise was that, with help from subsidies, you wouldn’t have to spend more than a set percentage of your income on health insurance — if premiums rise in your area, so too will the subsidies.
The Senate GOP’s health plan changes that structure in a few ways. First, it resets the benchmark plan to one that only covers 58 percent of expected health costs. Under Obamacare, the sparest plan that insurers can generally offer at all has to cover at least 60 percent of expected health costs — so the plans subsidized by the GOP bill won’t just have higher deductibles and less coverage than the plans at the center of the ACA; they’ll have higher deductibles and less coverage than the plans at the bottom of the ACA.
Second, it increases the percentage of your income you can pay for a benchmark plan before it’s deemed unaffordable and additional subsidies kick in. Here are the new levels:
If all this sounds a bit in the weeds, here’s the bottom line: Low-income Americans get less money to buy crummier insurance. In the GOP bill, the measure of what is affordable has gone up and the definition of what counts as decent insurance has gone down.
This basic idea is also present in the plan’s changes to Medicaid. The Senate’s plan begins to phase out the Medicaid expansion in 2021, and fully repeals it in 2024. Low-income people who were on Medicaid get moved to the exchanges, where the plans cover less, cost more, and require more out-of-pocket spending.
Once the Medicaid expansion is repealed, Republicans get to work on Medicaid itself, tying the amount it can spend to an inflation index that lags behind how much health care actually costs. The result is Medicaid will be able to cover fewer people and cover less of their health care in the future.
Similarly, right now the Affordable Care Act’s subsidies go to 400 percent of the poverty line. This bill caps them at 350 percent of the poverty line. People above that limit will have to pay more for their insurance, which means they’ll be able to afford less.
Reading the bill, I keep thinking about what Sen. Mitch McConnell said about the Affordable Care Act in January:
MCCONNELL: Well, what you need to understand is that there are 25 million Americans who aren’t covered now. If the idea behind Obamacare was to get everyone covered, that’s one of the many failures. In addition to premiums going up, copayments going up, deductibles going up. And many Americans who actually did get insurance when they did not have it before have really bad insurance that they have to pay for, and the deductibles are so high that it’s really not worth much to them. So it is chaotic. The status quo is simply unacceptable.
McConnell was right in every criticism he made of the ACA. Then he turned around and wrote a bill that made every single problem he identified worse.
The bill he has written leads to more people who aren’t covered. The premiums, deductibles, and copays people actually pay for their care will skyrocket. More people will end up in bad insurance that has deductibles so high that it’s really not worth much to them. In a particularly Orwellian flourish, the name of this bill dedicated to diminishing the quality of the insurance coverage Americans can afford is “The Better Care Act.”