The Republican health-care bill is all about shortchanging the poor
Updated On: Mar 08, 2017
The American Health Care Act, introduced in the House Energy and Commerce and Ways and Means committees late Monday, was advertised as a bill to repeal and replace the Affordable Care Act. But the real focus of the legislation is not on health-care reform, not even on repealing the ACA as such. What the AHCA would in fact do is massively redistribute wealth from the poorest Americans to the wealthiest.
The AHCA repeals very little of the ACA, leaving all but three of the ACA’s 10 titles almost entirely intact. It leaves untouched most of the ACA’s insurance reforms, including its bans on preexisting-conditions exclusions, health status underwriting, and lifetime and annual coverage limits, as well as its requirements that health plans cover adult children to age 26 and, significantly, that individual market plans cover the ACA’s essential health benefits.
The AHCA does, of course, repeal some of the ACA’s insurance market reforms — most notably, the penalties for the individual and employer mandate. By 2020 it would also replace the ACA’s current income-based premium tax credits and cost-sharing reduction payments with fixed-dollar, age-adjusted tax credits.
But most ominously, the proposed legislation would repeal virtually all of the taxes created by Congress in 2010 to finance the ACA as of 2018. The ACA imposed taxes on insurers, pharmaceutical manufacturers and medical-device manufacturers, and imposed Medicare tax surcharges on Americans earning a quarter of a million dollars a year and more. The AHCA gets rid of them. The Joint Committee on Taxation estimates that the bill would cut taxes by almost $600 billion over 10 years. The Center on Budget and Policy Priorities notes that the AHCA’s repeal of Medicare taxes would give the 400 highest-earning American taxpayers a $7 million tax cut each.
At the same time, the reform legislation cuts federal support for Medicaid, the federal/state program that for more than 50 years has provided health-care access to the poorest Americans. It whittles back federal support for the ACA’s Medicaid expansions, which have assisted millions of working Americans living near the poverty level. And it goes further, ending Medicaid as an entitlement program under which the federal government matched state expenditures and changing it to a per-capita program under which federal contributions would be limited, shifting program costs to the states and ultimately reducing Medicaid coverage for the poorest Americans.