BCRA is a Tax Break for the Rich and Funds itself by Sabotaging Medicaid

While Senators claimed that the Senate version of the AHCA, referred to the BCRA, would be written from the ground up, completely separate from the House version, they weren’t quite telling the truth. Part of this is not their fault. Most of them didn’t know what was in it until the rest of us did. Even the people that were on the committee appointed to write the bill hadn’t fully seen it before it was unveiled. However, now that is has been released, what we have seen and know about the bill is not encouraging.

First off, let’s be clear: this is not actually a healthcare bill. This is a finance bill that is a substantial tax cut for the massively wealthy. It cuts a significant portion of the taxes imposed by the ACA, to the tune of nearly $1 trillion. That is the main goal of the bill: not to provide healthcare, or improve it, but to return money to the significantly moneyed.

In order to fund the tax cuts, the bill sabotages the ACA in a variety of ways. It lessens the subsidy formulas, it cuts the regulations on what healthcare insurance must cover, and so on. In essence, it makes the ACA stingier.

The most significant changes, however are to Medicaid. Just as the House bill eliminated the Medicaid expansion, so too does the Senate bill, although with different phase in rates (3 years instead of 1 year) that are more window dressing than significant policy difference.

The Senate Health bill also sabotages Medicaid as a whole, just as the House bill did. It institutes either per capita spending caps, or block grants that would be much less regulated. These would also result in funding cuts that are steeper, if phased in somewhat more gradually. The rate of reimbursement would be much lower, leading to steeper cuts in the future. Additionally, as time moves on the gap between reimbursement and funding would grow even more, so that the most Medicaid programs would be encouraged to prioritize younger and cheaper recipients over older, more expensive ones. Further, any states that funds on a per beneficiary above 25% of the average is penalized with further caps, whereas states that spend less than 25% below the average get additional funding, creating a horrid race to the bottom, with deadly consequences.

The CBO estimate for the BCRA is that 22 million people will lose their insurance, better than the AHCA only on a technicality. That is still disastrous for millions of Americans. In the end, after the cuts to the capital gains taxes that fund the ACA, the gutting of Medicaid, and all of the other cuts and adjustments, the government would save about $321 Billion over the next 10 years. Premiums would increase by about 20%, and eventually the poor would have to choose between either premiums they couldn’t afford for adequate care, or deductibles they couldn’t pay for subpar care.

The release of the CBO estimate has galvanized reactions across the spectrum. The AARP came out against the bill when the draft was released, and are not appreciative of what it calls unfair targeting of the elderly. The AMA itself came out with a statement that the bill would violate the first precept of medical ethics, Primum non nocere, or “first, do no harm.” The United States Conference of Catholic Bishops has also come out and said that the bill is “unacceptable as written”.

All Democratic Senators are opposed to this bill. Therefore, Senate Majority Leader McConnell can only afford 2 defections on his side so that he can pass the bill with Vice President Pence’s tie breaking vote. The most significant development on this front is a group of 4 conservative senators who have announced they are voting no on the bill. Sens. Rand Paul (Ky), Ron Johnson(Wi), Ted Cruz (Tx) and Mike Lee (Ut) all have concerns that while the bill does away with much of the ACA, it still keeps the framework. They object from the conservative position of promising to repeal the ACA as a whole. After the CBO estimate, Senator Paul continued his objections, as did Senator Johnson. Senator Cruz was noncommittal, and Senator Lee has come out against the BCRA as well.

One other senator has also announced he is a no vote. In a state moving increasingly Democratic, that has a significant medicaid population, Senator Dean Heller of Nevada has also announced he is voting no. He objects to removing healthcare from millions, to the secretive process McConnell used, without input, hearing, or amendment. It seems there is little that can be done to get his vote on the bill.

And he seems to be serious. He is up for reelection next year, and pro-Trump groups are already spending against him. His seat is seen as one of the most vulnerable to Democrats (certainly part of his calculus for voting no), and so this sort of infighting probably does not help.

There are two other votes that are significant at this time. One is Lisa Murkoswki of Alaska. She is notoriously independent of the Republican Party as whole (in her 2010 campaign, she retained her seat as a write in candidate after losing the primary to a Tea Party candidate). Alaska also has a significant Medicaid population, and while there are provisions in the bill for low density states to spend more on Medicaid, the cuts would eventually hit the state hard. She also supports Planned Parenthood, which the bill completely defunds. After the CBO estimate, she is still “gathering information”.

Another supporter of Planned Parenthood is Senator Susan Collins of Maine. She is also one of the more moderate Republican Senators, and she has expressed some reservations with the bill. She is eyeing the governor’s mansion next year (she ran and lost in 1994, beaten by her fellow Senator, Angus King), and so must consider Maine’s more moderate (and older) demographic. Defending the 1 in 5 Mainers on Medicaid, among other reasons, Collins has committed that she is voting no, unless drastic changes are made.

The Senate Health Bill is going to hurt if it passes. It will hurt the poor, the elderly, the lower and middle class: everyone not fantastically wealthy. But it hasn’t passed yet. There is still time for Republican opposition to the bill to coalesce. West Virginia seems to be a promising start, for example. Constituents are not going to let this go without a fight, even if they have to be carried out of their wheelchairs. McConnell is relying on speed and subterfuge to get this bill passed. Hopefully, there is too much of a spotlight on him.

While the wave of negative reaction from Republicans may be comforting, McConnell is not done with this. Until the no’s have actually been voted, the BCRA is not finished. At this stage, McConnell will attempt to convince those senators to change their vote to yes, with more opioid treatment funding to convince Johnson and Capito of West Virginia, for example. With the $321 billion in cuts, McConnell has around $200 billion to use to fund different programs to convince Senators to come on board.  And they will try again. The conservatives want their tax cut, and they want the ACA gone. They don’t particularly care who they hurt to get there.

Update: It has been announced that voting on the BCRA has been delayed until at least after the July 4 recess.

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