A stinginess problem

The Senate health care bill takes matters from worse to bad

The Obamacare replacement that the House sent to the Senate might as well have had a note scrawled across its pages: Save us from ourselves.

And the Senate bill, which just emerged from Mitch McConnell’s underground laboratories into the light of day, does indeed improve upon the House’s bill in several important ways. But is that enough to make the new version an electoral winner for Republicans? Probably not: At best one might say that it’s a political suicide attempt that’s somewhat less likely to succeed. Is it enough to make it sound public policy? Again, I think not: There are good ideas worked in, but still too much needless callousness.

The best argument for the bill is twofold. First, it officially reconciles the Republican Party to the idea that the government should provide support for working-class health insurance — a necessary and overdue reconciliation. Second, it takes part of Obamacare’s basic structure — tax credits, pegged to income, to enable the lower-middle class and near poor to afford coverage — and uses it to further two of the more compelling conservative health policy objectives: higher-deductible plans (which tend to reduce health care cost inflation) rather than comprehensive ones (which exacerbate it), and subsidies for private insurance rather than Medicaid for the nearpoor, because private coverage may deliver better health.

So far, so reasonable. Also reasonable: a loosening of age-based price controls to make the exchanges more viable, and the fact that the Senate bill’s income-based credits are less stingy than the House bill’s flat credit, and thus less likely to leave the poor and old with impossible premiums to pay.

But stinginess is still the essential problem for the Senate’s alternative. Highdeductible insurance plans make less sense the poorer you get, which is why they should ideally be encouraged from the top of the income ladder down — through a cap on the tax subsidy for employer-provided insurance, ideally, a sound conservative idea left at the altar by this bill.

Pushing them from the bottom of society only makes sense if you’re also willing to prefund health savings accounts for the near-poor, so that they can actually hope to pay their out-of-pocket costs. But this costs money that Republicans prefer to reserve for tax cuts. So the bill’s attempted transition from Medicaid to private coverage would inevitably leave the people transitioning worse off, with deductibles that they couldn’t pay even if their choice of doctors were technically better.

Meanwhile, the middleclass Americans most justifiably aggrieved by Obamacare — the people just above the subsidy cutoff, buying unsubsidized insurance that Obamacare made less affordable — will gain little from the bill, and because the subsidy ceiling is lowered (from 400 percent of poverty to 350 percent) their ranks will actually increase.

The House bill, flawed in so many respects, at least made an effort on this front, since its flat subsidy was available to the people currently getting hosed by Obamacare prices. But maintaining a smaller version of that subsidy would have, once again, cost money, so instead the health care law’s biggest losers will continue to lose out.

Politically, then, it’s very hard to see a clear constituency for this bill, apart from the mostly wealthy voters who will appreciate its rollback of Obamacare’s tax increases. Because it preserves more reasonable subsidies than the House bill and because its Medicaid drawdown happens in the distant 2020s — which is to say, perhaps never — it might not be an outright political catastrophe. But it’s still the act of a party dedicated primarily to rescuing the rich from their tax rates, rather than stewarding the common good.

The best conservative health policy analysis proceeds from the controversial but, I think, correct perspective that much health spending is wasted and that people do not value or benefit from insurance as much as liberal technocrats presume. That analysis lends support to some of the provisions in this bill. But a more holistic, less plutocratic conservatism would not stop there: In an environment where deindustrialization and social breakdown have driven the working class Trumpward, saying we should not oversubsidize their health insurance should be followed by saying so that we can find other ways to help them.

Which the Republican Party could do, if it so chose. It could pass this bill, flaws and all, and then use the projected cost savings for a tax reform that doesn’t just use, say, a small child tax credit as a fig leaf for a huge upperbracket tax cut, but that’s actually organized around payroll tax cuts, refundable child tax credits, a larger earned-income tax credit, and other measures that would make up for the thinning of working-class insurance coverage with more cash in paychecks and bank accounts.

If that happens, I will recant my opposition to this bill. But I don’t expect any such recantation to be required, because the Republican Party remains what it is, not what the country needs it to become.

Ross Douthat is a columnist for The New York Times.