Senate health care bill won’t improve the nation’s health, but it will make rich people richer

This is the harsh reality of the Senate health care bill: it provides tax cuts to the wealthiest Americans, while taking away access to timely medical care from the poorest, most vulnerable Americans. You’ve probably been hearing this point a lot about the GOP’s repeal-and-replace efforts, and it’s easy to relegate it to partisan hyperbole. But the sad truth is that, well, it’s the sad truth.

The Senate’s “draft” health care bill, released this morning, proposes sweeping changes to the Medicaid system, which now provides health coverage for 76 percent of poor children, 60 percent of children with disabilities, 64 percent of nursing home residents and 40 percent of poor adults. Medicaid also covers about half of all births in this country (adding this in just in case “pro-life” Republicans didn’t realize that Medicaid helps ensure healthy pregnancies and newborns. The more you know…). The Senate bill would phase out the Affordable Care Act’s Medicaid expansion, which covered about 11 million additional Americans, though over a longer period of time than the House proposal.

But then the Senate GOP really brings down the ax on Medicaid. In addition to ending the ACA expansion, it would also cap federal funding to states for traditional Medicaid. That is HUGE. Right now, there’s no pre-set limit on federal Medicaid matching funds — that means states have a lot of flexibility in designing a Medicaid program that actually meets the health care needs of their residents. Under the Senate’s health care proposal, states would basically get a pre-set lump sum of federal Medicaid money. Health policy experts predict that a funding formula change of that magnitude would likely force states to ration Medicaid services, cut back on benefits or limit enrollment. It also means Medicaid would lose that nimble flexibility that lets it respond to unexpected rises in hardship, like what we saw during the Great Recession.

Overall, it is extremely hard to imagine how both the Senate and House proposals wouldn’t result in many more people suffering from poorer health and preventable disease — which should really be the main metric by which we measure any health care proposal.

But back to the tax cut issue, which is particularly important because a health care bill should be focused on making people healthier, not making rich people richer. And frankly, this bill seems more interested in tax cuts than in people’s actual health. The Senate health care proposal repeals just about all the taxes in the ACA that paid for the law’s expansion efforts and because those taxes were primarily levied on rich Americans and industry, the average American won’t see a cent of those tax cuts back in their pockets. To be clear, these are tax cuts for the rich paid for by cutting back health care access for low-income Americans.

So, what does that tax cut look like on the ground? Thankfully, the Center on Budget and Policy Priorities (CBPP) crunched the numbers and released a report on just that. The report was released yesterday and so it’s based on the House GOP replacement bill, but surprise!, the Senate proposal does the same thing. Here’s what researcher Brandon DeBot found when examining the House GOP health care/tax cut bill:

• The 400 highest-income taxpayers would get tax cuts worth about $33 billion from 2019 through 2028. That’s more than the federal spending cuts from ending the Medicaid expansion in 20 states and Washington, D.C.
• The tax cuts for the top 400 are about equal to the federal cost of maintaining the Medicaid expansion in Nevada, West Virginia, Arkansas and Alaska combined. Those 400 households already have annual incomes that average more than $300 million each.
• Households earning more than $1 million a year would receive yearly tax cuts of more than $50,000 each — that’s more than the cost of sustaining Medicaid expansion coverage for eight people.
• The tax cuts contained in the House bill, which overwhelmingly benefit wealthy Americans, total $699 billion. The Medicaid cuts proposed in the House bill total $702 billion.

DeBot concluded:

“These estimates reveal misplaced priorities in the Republican approach to health reform, and the harsh consequences for millions of people if the policies are enacted.”

Jacob Leibenluft, also at CBPP, warned in a commentary published today that once Medicaid is cut, it won’t be easily undone. He writes:

“History suggests that structural changes to Medicaid would be very difficult to reverse. The basic concept behind the per capita cap is to impose a cap on federal funding per beneficiary, replacing the existing commitment of the federal government to pay a fixed share of state Medicaid costs. Experience with other programs suggests that such radical structural changes won’t be reversed.”

If you’d like to voice your opinion on the Senate health care bill and cuts to Medicaid, Families USA has all the information and tools you need.

Kim Krisberg is a freelance public health writer living in Austin, Texas, and has been writing about public health for 15 years. Follow me on Twitter — @kkrisberg.