Senate Republicans have released their supposed ObamaCare-repeal bill, the “Better Care Reconciliation Act.” Like its counterpart, the House-passed “American Health Care Act,” the Senate bill would not repeal ObamaCare. Indeed, it’s not even fair to call it a partial repeal or “ObamaCare-lite.”
The Senate bill fails to repeal ObamaCare’s major provisions. Its purported repeal and reform provisions, particularly those tied to Medicaid, are phony. Indeed, the bill would actually expand ObamaCare in significant respects.
Let’s start with what it will do to the cost, quality and stability of private health insurance.
ObamaCare’s “community rating” price controls are causing premiums to rise, coverage to get worse for the sick and insurance markets to collapse across the country. The Senate bill would modify those government price controls somewhat, allowing insurers to charge 64-year-olds five times what they charge 18-year-olds (as opposed to three times, under current law).
But these price controls would continue to make a mess of markets and cause insurers to flee. The bill would also preserve other ObamaCare mandates and regulations that contribute to higher premiums.
On top of that, the Senate bill wouldn’t even repeal the parts of ObamaCare Republicans claim it would. On paper, it would repeal ObamaCare’s expansion of Medicaid — but not until 2024.
There will be three federal election cycles, three new Congresses and potentially a brand new president between now and then. It is almost certain Democrats will control at least one of those Congresses, and could then rescind this “repeal” as if it never happened.
The rest of the bill’s supposed Medicaid cuts are no less phony. The bill wouldn’t cut traditional Medicaid by one penny. It would reduce the rate of growth in traditional Medicaid spending, but Medicaid spending would still grow, year after year, forever. Yet even those changes are phony. They would not take effect until 2025, giving four future Congresses the opportunity to rescind them.
Republicans have been promising full ObamaCare repeal for seven years. That means repealing all of ObamaCare’s regulations, mandates, bailouts and subsidies, including the entire Medicaid expansion. Instead, the Senate bill actually expands ObamaCare in at least two ways.
First, it expands eligibility for ObamaCare’s so-called “premium-assistance tax credits” to 2.6 million people in the 19 states that didn’t expand Medicaid, which is effectively a Medicaid expansion by other means.
Second, the bill would fund ObamaCare’s “cost-sharing” subsidies — something not even Democrats ever did. The Democratic Congress that enacted ObamaCare authorized but did not fund those subsidies — which, a federal judge ruled, makes the Obama and Trump administrations’ payment of those subsidies to insurers unconstitutional.
Rather than let those unconstitutional subsidies die, the Republican bill would expand ObamaCare beyond what a Democratic Congress created.
Finally, rather than let Democrats outdo them when it comes to budget gimmicks, Senate Republicans ordered the nonpartisan Congressional Budget Office to “score” their bill against spending and revenue projections that overestimate the number of exchange enrollees and exchange spending. Comparing their bill to inflated spending estimates allows Republicans to spend more ObamaCare money than honest budgeting would.
We may never know for sure, but Senate Republicans could be hiding that their bill would increase federal deficits and/or even increase actual spending on exchange subsidies.
Nevertheless, Senate Republicans will claim that their bill repeals ObamaCare and replaces it with free-market reforms. Perhaps the worst part is that ObamaCare supporters would be able to blame the ongoing harm their law causes on free markets rather than the actual culprit.
Michael F. Cannon is director of health policy studies at the Cato Institute. Send comments to email@example.com.