Last week, Senate Republicans emerged from secret negotiations to unveil their version of a major health care bill. Those expecting that the Senate would produce a better health plan than the House are likely underwhelmed by the Senate’s efforts. The Senate Republican health plan (the Better Care Reconciliation Plan, or BCRA) would require Americans purchasing private insurance on the individual marketplace to pay substantially more for worse health coverage. It would also undercut the American health care safety net, nearly doubling the uninsured rate, while delivering a massive tax cut for corporations and the wealthy.
The Affordable Care Act has provided popular new consumer protections to all Americans and extended health coverage to tens of millions who couldn’t get it before. Nevertheless, many Oklahomans remain unsatisfied with high premiums and deductibles, as well as limited insurer participation on the individual marketplace. However, rather than fix these issues, the Senate bill would make them worse. Here’s how.
The Senate Republican health plan would make Oklahomans pay more for worse coverage on the individual marketplace.
In 2017, more than 100,000 Oklahomans used a refundable tax credit to help pay for private health coverage on healthcare.gov. The Senate bill would make that tax credit much smaller – and make the coverage worse. The BCRA would allow insurers to charge older people much more for their coverage. That could reduce premiums for younger enrollees, but it would hike them significantly for older ones. In Oklahoma, this age tax means premiums for a 60 year-old earning around $40,000 would jump by more than $5,000 – the third-largest jump in the US. Premiums nationwide will jump 20 percent by 2018. Although the Congressional Budget Office projects premiums will eventually decline, that decline will in part be due to more older, sicker, and thus more expensive people dropping coverage as it becomes unaffordable.
The bill would also take away premium tax credits from those earning higher incomes, leaving some households without any assistance to purchase coverage. In addition, the Senate bill would link those tax credits to plans requiring much greater out-of-pocket spending — while eliminating additional coverage for out-of-pocket spending for lower-income enrollees. Combined, the effects will be worst for older, lower-income enrollees, whose uninsured rate will more than double within ten years, according to the Congressional Budget Office.
The coverage that is still available would also be less usable and harder to access. The Senate bill would allow states to duck existing required benefits like prescription drugs and maternity care, thereby effectively reinstating preexisting conditions exclusions and benefit caps for individuals with illnesses their state doesn’t require insurers to cover – including those who get their insurance from their employer.
Unlike the ACA or its predecessor in the House, the Senate bill offers coverage to the thousands of Oklahomans currently in the coverage crater – who make too much to qualify for Medicaid but too little to get tax credits for purchasing insurance on healthcare.gov. But that coverage would only be accessible in theory. Whereas Medicaid expansion would have meant very limited deductibles, premiums, or other cost sharing, the Senate bill would offer private insurance where an individual earning shy of $12,000 per year could be expected to handle a $6,000 deductible. This is simply not a realistic option for Oklahoma families.
The Senate Republican health plan would devastate access to care for low-income children, people with disabilities, and the elderly.
Oklahoma’s Medicaid program, known as SoonerCare, covers about 800,000 low-income children, seniors, people with disabilities, and very low-income parents every month. Starting in 2020, the Senate Republican health plan would cap the amount of money the federal government would agree to spend per enrollee far below the actual cost of health care. That would leave states to pick up an increasingly greater share of Medicaid spending.
The nonpartisan Congressional Budget Office estimates that the Senate health bill would cut Medicaid by 26 percent by 2026, with larger cuts to come as health care costs grow. Oklahoma would either have to make up the difference from its own budget, or cut provider reimbursements, coverage, services, and eligibility. In effect, while the cap would come with greater flexibility for states to administer their Medicaid programs, the federal funding caps mean that states really only get to decide what or who to cut.
“The effects will be worst for older, lower-income enrollees, whose uninsured rate will more than double within ten years, according to the Congressional Budget Office.”
When it comes to cuts of that magnitude, there are no good options – but plenty of opportunities for catastrophe. Children make up two-thirds of Oklahoma’s Medicaid population, and Medicaid covers nearly half of all kids in rural towns and communities. Should they lose coverage? In Oklahoma, nearly half of all Medicaid spending goes to the 1 in 6 members who are aged, blind, or have a disability. What prescriptions would we decide they don’t need anymore? Oklahoma is already looking at cutting programs for the elderly and disabled, with devastating effect. Millions of Americans would be pushed off Medicaid but not given any realistic ability to purchase useful insurance in the private marketplace — which is why the Congressional Budget Office estimates this bill would cause 22 million Americans to go uninsured.
The damage from these Medicaid cuts would ripple beyond just the individuals Medicaid serves. Nursing homes, health clinics, and hospitals, especially those in rural areas, would be put out of business. Family members of people who are elderly or have disabilities and rely on in-home nursing may be forced to quit their jobs to care for children or parents.
The Senate Republican health plan is not a health plan. It’s a tax cut for the rich.
It’s hard to say what, if any, health care policy problem the Senate Republican health plan aims to fix. The bill does not improve access to care or the affordability of care, except perhaps for the sliver of the population with the good fortune to be simultaneously young and healthy for as long as they remain both. It wrecks the health care safety net. It weakens the protections of the Affordable Care Act but leaves many of its underlying foundations in place. There’s no indication that health or access to health care would improve as a result of this plan.
What the bill does do is massively cut taxes for the rich. Like its House cousin, the Senate bill would use savings from cutting marketplace subsidies and Medicaid for low- and moderate-income Americans to pay for more than $600 billion in tax cuts for the wealthy and corporations. By 2025, households with incomes greater than $1 million would receive, on average, $50,000 per year from those tax cuts. The wealthiest 400 families in American would get average annual tax cuts of $7 million.
What you can do
Just like its cousin in the House, the Senate bill is extremely unpopular, and we do have a chance of stopping it. Please contact your Senators and tell them you oppose the Senate Republican health plan and any plan that reduces access to health coverage for Oklahomans or cuts, caps, or restructures Medicaid.
Please also ask your Senators to commit not to vote without a CBO cost and coverage estimate of the bill they are actually voting on. The bill will likely continue to evolve throughout the week, and we know that leadership wants a vote before the Fourth of July recess. That means that Senators could be asked to vote on a version of the bill that hasn’t been scored by the CBO and which neither they nor the public have had time to fully analyze. It is irresponsible for lawmakers to vote on any legislation this significant without a full understanding of its likely effects.
This post will be updated as more information becomes available.