The Unconscionable Cruelty of Trumpcare:
Understanding the Better Care Reconciliation Act
“Americans are right to be stunned — because this bill is a mess. And so was the process that was used to get it over the finish line. Americans are outraged by the last-minute, closed-door, sweetheart deals that were made to gain the slimmest margin for passage of a bill that’s about their health care.” — Mitch McConnell, Dec. 22, 2009
While Mitch McConnell’s statement above was made about the Affordable Care Act (ACA), it aptly summarizes the critiques levied against Senate Republicans’ own healthcare bill, the Better Care Reconciliation Act (BCRA). Democrats passed the ACA after dozens of committee hearings, discussions with Republicans, and meetings with healthcare industry stakeholders, but Senate Republicans are on the brink of passing legislation that was developed in secret by 13 male Senators from 10 states. The reason for the GOP’s secrecy around this healthcare legislation is clear: the bill they have developed is both staggeringly unpopular and bad for the health and economic security of millions of Americans.
McConnell finally released a “discussion draft” of his healthcare bill on Thursday, June 22, a mere week before a potential Senate floor vote; a revised version of the bill was released the following Monday. In contrast with the ACA, which clocked in at a hefty 974 pages, the BCRA is a relatively slim 145, leaving plenty of room for McConnell to stuff it with pork to appeal to his wavering colleagues.
On June 26, the nonpartisan Congressional Budget Office (CBO) released its analysis of the BCRA’s effects on the federal budget, health insurance coverage, and health insurance costs. Their findings confirm what BCRA critics already knew — the bill will cause 22 additional people to lose insurance coverage by 2026, causing disproportionate harm to lower-income and sicker people to finance a $700 billion tax cut to the wealthiest Americans.
But the devastating effects of the BCRA go far beyond coverage loss. Here are some of its other unconscionably cruel aspects…
Cuts to Medicaid
The BCRA’s most obvious attacks on low-income people are through the bill’s cuts to Medicaid. Medicaid is a massive health insurance program that covers 69 million people, including low-income adults and families, children and adults with disabilities, and low-income adults over 65. The majority of Medicaid spending goes to people with physical and intellectual disabilities, whose costs constitute about one-third of Medicaid’s budget. Medicaid is also a major source of funding for labor and delivery (paying for about half of all births in the U.S.) and for nursing homes (covering the costs of about 62% of all nursing home residents). The CBO estimates BCRA’s changes to Medicaid would cause 15 million people to lose coverage by 2026, while forcing states to cut services for those who remain enrolled in the program.
The BCRA attacks Medicaid coverage in two ways. First, BCRA establishes a per capita spending cap for Medicaid starting in 2020. The spending cap would change Medicaid from an open-ended entitlement program to a program where states get a set amount of federal dollars for each Medicaid beneficiary they cover. From 2020 to 2025, Medicaid spending cap amounts would increase based on an inflation factor. This inflation factor’s growth is predicted to be slower than the predicted rate of spending growth for many Medicaid consumers. Medicaid spending caps would grow even more slowly based on an even less generous inflation factor starting in 2025, exacerbating the gap between Medicaid beneficiaries’ needs and the federal funding allocated to them. States will have several options to fill this funding gap: shift the costs onto their state budgets, cut spending by reducing payments to Medicaid providers and insurers, eliminating “optional” services like in-home nursing care, restricting eligibility, and finding more efficient ways to deliver services. Children with disabilities are exempted from spending caps, but an absolute reduction in Medicaid spending means that everyone covered by Medicaid will likely see reduced access to services and stricter eligibility requirements. The CBO cannot estimate exactly how states will respond to spending caps, but there is no question that Medicaid’s restructuring will limit access to Medicaid and cause states to offer less generous benefits.
The BCRA also harms Medicaid enrollees by winding down federal funding for Medicaid expansion. Under the ACA, states had the option to expand Medicaid eligibility to include low-income adults, with the federal government paying the full costs of Medicaid expansion through 2017 and covering 90% of those costs from 2018–2020. However, the BCRA would wind down Medicaid expansion over 3 years starting in 2021. By 2024, the federal government would no longer provide any extra funding for the 11 million Americans covered under the Medicaid expansion. Medicaid expansion states would have to find the money to cover these new costs under their own state budgets or simply stop offering Medicaid to these enrollees. As the CBO notes, many states will likely begin winding down Medicaid expansion as soon as federal funding starts to decrease or possibly even before that.
Between these two provisions, BCRA would cut Medicaid funding by $772 billion, or 26%, by 2026 (despite Donald Trump’s explicit campaign promises to leave Medicaid untouched), disproportionately harming low-income people, older adults, and people with disabilities who rely on this program for services.
One group for whom Trump specifically vowed to provide treatment access will be especially hard-hit by Medicaid cuts under BCRA — people with substance use disorders, including opioid addiction. Although the bill sets aside $2 billion in funding to address the opioid crisis, this funding is laughably inadequate to replace the essential services that people with substance use disorders currently receive through Medicaid. Public health experts have noted that Medicaid expansion was often the only avenue into treatment for adults with addiction, and fear that withdrawal of expansion funding will leave these people without access to care. Studies have shown that Medicaid expansion directly helped people struggling with addiction by increasing their access to medication-assisted therapy, the most effective method of substance use disorder treatment. About 3 in 10 people with opioid addiction are insured via Medicaid, and an estimated 2.8 million people with substance use disorders would lose their healthcare under ACA repeal.
Changes to the Individual Insurance Market
The BCRA also causes trouble in the nongroup market (i.e. insurance plans sold to individuals through the exchanges). First, while the CBO concludes the bill would cause premiums for the lowest-cost bronze plans to decrease overall in the long-term, out of pocket healthcare spending would exceed premium savings, shifting costs from insurance companies to consumers. The CBO also predicts dramatic increases in deductibles, further driving up costs for bronze plan buyers. For consumers who choose to buy silver plans, which cover a higher percentage of healthcare costs and have lower deductibles, premiums will simply go up. The nonpartisan Kaiser Family Foundation predicts that in 2020, premium costs for silver plans would increase by 74% on average. While premium increases would be modest for younger enrollees (10% for those under 18 and 17% for those 18 to 34), average premiums for those ages 55–64 would more than double.
In states that choose to waive the requirement that insurers cover essential health benefits, insurers will provide less generous marketplace plans, forcing consumers to spend more out of pocket on healthcare. States can also choose to waive the ban on lifetime and annual spending limits, which could further increase out of pocket spending, especially for consumers with chronic medical conditions, disabilities, and other costly conditions like complicated pregnancies. Low-income people will be disproportionately affected by individual market changes, as they will be unable to afford both the cheaper bronze plans’ high deductibles and the lower-deductible silver plans’ higher premiums. Many of these people will simply stop buying insurance, leaving them at risk for financial ruin if they get sick or injured.
The BCRA will also cause individual market instability, a problem that Republicans have long claimed ACA repeal would resolve (despite extensive evidence that marketplace problems have been caused by GOP sabotage and threats to the ACA, not the ACA itself). By repealing the individual insurance mandate, BCRA will cause many young, healthy people to exit the insurance market altogether. While the BCRA includes an incentive to discourage a market exit — a mandatory six-month waiting period to buy insurance for those who didn’t have insurance the previous year — healthcare experts estimate this provision will be a relatively weak incentive that will mostly keep sick people from getting timely healthcare. Consequently, insurers will stop offering exchange plans altogether in some areas, especially in those that already have sicker populations.
Changes to Employer-Based Insurance
The BCRA’s effects on employer-provided insurance are less direct but still potentially dramatic. By repealing the employer insurance mandate, the BCRA removes the requirement that large employers offer insurance AND the requirement that this insurance meet specific standards. These standards include mandatory coverage of dependents under age 26; no-cost preventive services, including contraception and annual checkups; limits on deductibles; bans on lifetime and annual spending limits; and minimum coverage requirements for essential health benefits like maternity care, mental health services, pharmacy services, and hospital care.
The BCRA estimates that 4 million people will immediately lose insurance as employers stop offering coverage, with millions more losing coverage in subsequent years. Those who do remain insured might end up paying the same amount or more for reduced coverage. They could also find themselves saddled with thousands of dollars in healthcare costs after reaching reinstated lifetime spending caps, which were the norm for most employer-based insurance pre-ACA.
Tax Cuts for the Wealthy
A federal budget rule known as pay-as-you-go, or simply PAYGO, requires than any tax cuts be covered by tax increases or mandatory spending cuts elsewhere in the budget. The BRCA’s dramatic cuts to Medicaid and individual market subsidies are necessary to cover the cost of its $700 billion in tax cuts. The bill eliminates both a surtax on high-income taxpayers’ investment incomes and an annual fee on insurance companies immediately. In 2023, the bill repeals the Hospital Insurance Payroll Tax Rate for certain high-income taxpayers. The bill also indefinitely delays the imposition of tax penalties on employers offering plans with high premiums.
Unsurprisingly, these cuts overwhelmingly benefit richer consumers, with the top 1% of American earners (i.e. those earning $875,000 or more annually) getting almost 45% of the total tax savings. The top 0.1% of earners in the US (i.e. people making $5 million or more a year) would receive an average annual tax cut of almost a quarter of a million dollars by 2026.
Cuts to Medicaid, the defunding of Planned Parenthood, and even the elimination of the Prevention and Public Health Fund (which provides crucial funding for public health services like immunization campaigns and rapid responses to disease outbreaks and bioterrorism) — all of these changes are just a cover for the true purpose of the BCRA. As the CBO’s analysis demonstrates, Senate Republicans crafted their ACA repeal plan behind closed doors because the bill’s purpose is not to improve healthcare but rather to deliver tax cuts to the ultra-rich while leaving millions of other Americans behind.
Resisting Trumpcare: How to Fight Back
Constituents have already succeeded in forcing a delayed vote on BCRA until after the July recess. Thanks to pressure from calls, emails, letters, and protests, five Republican senators refused to even vote to begin floor debate on the bill! However, the healthcare fight is far from over. We have every reason to believe McConnell will spend recess trying to round up the votes he needs to pass Trumpcare. Turn up the heat on your Senators (yes, even the Democrats) by continuing to call them about the BCRA during the July 4th recess and beyond!
Visit us at 5calls.org for continuously-updated scripts on Trumpcare. Spend 5 minutes. Make 5 calls. Make your voice heard!
