By Families USA
July 14, 2017
Editor’s note: This piece was written by Families USA’s Eliot Fishman, Senior Director of Health Policy, Dee Mahan, Director of Medicaid Initiatives, and Lydia Mitts, Associate Director of Affordability Initiatives. It was originally posted on Families USA’s blog on July 14.
Just as with earlier versions, the latest iteration of the Senate’s Affordable Care Act repeal bill would devastate insurance coverage, gut the Medicaid program, and dramatically increase deductibles and out of pocket costs.
The newest repeal bill:
- leaves in place enormous cuts to Medicaid and ends the Medicaid expansion;
- ensures that millions of low-income workers will lose health coverage and that those left on Medicaid will be enrolled in a hollowed out program with funding reduced by 35% over time;
- continues to allow states to eliminate the essential health benefits and minimum coverage requirements that are core protections for people with pre-existing conditions and goes a lot further in this damaging direction, imposing a new structure—thought up by Senator Ted Cruz—that further erodes pre-existing conditions protections;
- continues to cut financial assistance for private coverage and eliminates all assistance with out-of-pocket costs like deductibles;
- increases deductibles for working lower- and middle-income families across all ages by an average of close to $5,000;
- still increases premiums for older people by hundreds to thousands of dollars on top of these new higher deductibles;
- still institutes an age tax on premiums, allowing insurers to charge older people five times the premium of younger people;
- still provides billions of dollars in tax cuts to the wealthy and corporations.
So What Has Changed?
Fewer protections for pre-existing conditions
Senator Cruz’s new language would allow insurers to sell plans off the exchange that don’t follow numerous protections for people with pre-existing conditions. Insurers could sell plans that refuse to cover people with pre-existing conditions, include blanket exclusions of all care tied to a pre-existing condition – or that don’t cover critical essential health benefits or preventive services with no cost-sharing – or charge higher premiums to people with pre-existing conditions
To make this destructive segmentation of the individual insurance market worse, the amendment would add $70 billion over 7 years to the bill’s amorphous “stability fund” that would go directly to insurers as a pay out to insurers that opt to engage in such destabilizing and discriminatory practices.
Shifts Medicaid funds into poorly defined block grants
The new version further shifts Medicaid dollars from a federally defined insurance program into a poorly defined block grant to states. The hastily written block grant provision in the previous version of the bill is expanded dramatically to include all non-disabled adults. When it comes to Medicaid, the bill now combines ending the Medicaid expansion, block grants instead of insurance for Medicaid-enrolled adults, and a 35% cut for everyone left in traditional Medicaid.
A small substance abuse grant fund as a token offset to much larger Medicaid cuts
The revised bill would offer $45 billion in federal grants to states for substance abuse services over nine years, supposedly as a way to offset the $772 billion cut to Medicaid. This is a pittance relative to the Medicaid cuts, and is no substitute for the comprehensive health coverage that over 20 million people would lose under the bill.
Lessens tax cuts but still benefits corporations and the wealthy
The newest Senate bill restores a small proportion of the tax cuts for the wealthy that were in previous versions, but it is still very much a bill about cutting taxes. The bill still includes over $470 billion in tax cuts, mostly benefiting large corporations and health care businesses. And it adds a significant expansion of the Health Savings Account tax benefit which predominantly accrues to wealthy households.
These changes largely make the profound problems in previous versions of the Senate bill worse. They will formally divide the market for individual health insurance into plans for people with pre-existing conditions and for healthier people. They offset huge cuts to Medicaid and the regulated individual health insurance market with small expansions in Medicaid block grants and substance use grants and a stabilization fund that goes direct to insurance companies.