The central theme of the Republican campaign to repeal the Affordable Care Act has been freedom: freedom from Obamacare’s onerous regulations, freedom from overpriced insurance and most of all, freedom from the tyrannical individual mandate.
The Senate has now released its long-awaited alternative to Obama-era health reform. Although the Better Care Reconciliation Act is beleagured, there’s still a decent chance that the Senate will pass it. If it does, the bill is likely to become law.
So it’s reasonable to ask: How does the Senate bill stack up when it comes to freedom?
Start with the individual mandate, which the bill would repeal immediately. In its place, the bill would impose a six-month lockout period on anyone with a gap in coverage. If you get cancer and you’re uninsured, you’re free to sign up for coverage — but you’ll have to wait six months before it pays for your chemotherapy.
Both the lockout period and the individual mandate are meant to discourage healthy people from waiting until they get sick to buy insurance. With the mandate, you pay a financial penalty for going uninsured. With the lockout period, you also pay a financial penalty, albeit one of uncertain scope: the full costs of any medical care you might need for six months.
They’re both similarly coercive. If you thought that the mandate was a big incursion on personal liberty, the lockout period should be at least as objectionable.
What about Obamacare’s regulations?
Because Republicans have only 52 votes in the Senate, they can’t break a Democratic filibuster. They are therefore using a process known as “reconciliation” that allows budget-related legislation to be passed by a bare majority.
But a reconciliation bill can include provisions that only directly affect federal revenue or federal spending, which means all those pesky Obamacare rules — including the ban on discriminating against people with preexisting conditions, the caps on out-of-pocket spending and the requirement to cover the essential health benefits — will remain intact.
If you care about freedom, maybe that’s a good thing: Maybe the sick and healthy, rich and poor alike should be equally free to buy health insurance. But if you think regulations are freedom-killing, you shouldn’t be happy about the Senate bill.
Surely, then, the bill at least liberates people from overpriced insurance? Quite to the contrary. Medicaid is the cheapest coverage around: For the disabled, poor and elderly who qualify, it’s essentially free. Yet the bill savagely cuts Medicaid. The Congressional Budget Office estimates that the cuts would lead 8 million people to lose Medicaid coverage by 2020, and 15 million by 2026.
These newly uninsured people could try to buy health plans on the exchanges. In contrast to Obamacare, the Senate bill allows people below the poverty level to use federal subsidies to buy private insurance. But the subsidies cover only premiums, not out-of-pocket spending.
And the premium subsidies will cover only the costs of health plans with very high deductibles — about $6,000 for an individual.
Poor people therefore would have the freedom to buy insurance with a deductible they cannot afford. As President Trump said about Obamacare, “The deductibles are so high that you really don’t have insurance, if you think about it.” CBO has thought about it, and it thinks that the Senate bill makes matters worse: “Few low-income people would purchase any plan.”
And while it’s true that the Senate bill eventually would reduce premiums for a typical exchange plan by about 20%, that’s only because the plans on offer would cover less than they do under Obamacare.
In addition, the Senate bill cuts financial support for premium payments. Today, a 64-year-old earning $26,500 per year has to pay just $1,700 to buy a standard exchange plan. Under the Senate bill, the same 64-year-old would have to pay $6,500 in premiums alone. And he’d still face a $6,000 deductible before his coverage kicked in. Lots of people will shed coverage rather than pay so much for health insurance.
All told, the CBO estimates that the Senate bill would push 22 million people off their health plans by 2026. Janice Joplin once sang, “Freedom’s just another word for nothing left to lose.” That should be the slogan for Republican reform.
Because the truth is the bill has nothing to do with freedom. It’s a vehicle for cutting Obamacare taxes, especially on the wealthy. Over the next decade, individuals who earn more than $200,000 and families that earn more than $250,000, will get a tax cut worth $230 billion. The bill also repeals taxes on health insurers, drug companies and medical device manufacturers; in total, the tax cuts amount to more than $750 billion over 10 years.
The need to pay for the tax cuts explains why the bill’s coverage numbers are so dismal.
The more you reduce federal support for health insurance, the more people will lose coverage. It’s really very simple. Obamacare taxed the rich to pay for insurance for the poor; the Senate bill zeroes out those taxes and thus eliminates the coverage gains.
Now that the Senate has shown its cards, it’s become apparent just how empty the Republican rhetoric was all along. Trumpcare may liberate wealthy people’s money from the taxman, but that’s about the only freedom it delivers.
Nicholas Bagley is a professor of law at the University of Michigan.