Death by a thousand cuts

New estimates from the Congressional Budget Office (CBO) paint by numbers the impact of the Senate healthcare bill. It’s a bill not about repealing “ObamaCare,” but about capping federal health spending and cutting taxes for the richest Americans and corporations.

The scope of the Affordable Care Act (ACA) is broad. It expands Medicaid, prioritizes value-based care in Medicare and invests in public health. But Republicans’ criticisms have focused narrowly on the individual market — people purchasing health insurance on their own. Virtually every one of President Trump’s claims that “ObamaCare is dead” is about premiums, deductibles and choices among the ACA’s Health Insurance Marketplace plans.

But the Senate Republican plan does not repeal this part of ObamaCare. Republicans could fully repeal the ACA’s Marketplace financial assistance and have enough to fund every tax cut envisioned in their bill. CBO’s January 2017 baseline assumes $781 billion in Marketplace assistance from 2018 to 2026, compared to the Senate bill’s $701 billion in tax cuts over the same period.


While the Senate bill does not repeal ObamaCare, it does not improve it either. The Senate bill would maintain the ACA’s health insurance tax credits, but at reduced levels, leaving consumers to spend more to get less. Marketplace spending under the bill would be about 60 percent of what is projected with no change according to CBO.

It takes the misguided approach of linking premium tax credits to lower value and higher deductible plans while eliminating financial assistance that reduces cost sharing for consumers. The Senate Republican bill also zeroes out the individual mandate fee, which CBO and insurers suggest will increase premiums by about 20 percent next year. And it lowers the “failsafe” or overall cap on Marketplace financial assistance, potentially rationing Marketplace subsidies like it rations Medicaid.

What’s more, CBO makes clear that Republicans prioritize cutting $772 billion in federal Medicaid spending, an amount that is nearly the same as every dollar spent on Marketplace financial assistance. Medicaid savings include rolling back the ACA’s coverage expansion and capping on federal Medicaid spending for the first time in the program’s history. In fact, over half of the pages in the Senate bill are devoted to Medicaid changes unrelated to the ACA.

In short, the CBO estimates suggest that the Senate bill neither repeals nor repairs ObamaCare. But it does cap federal health spending in order to cut taxes for corporations and high-income individuals. As Senators prepare to vote on this bill, they should be clear-eyed on its consequences.