Sun Sentinel Palm Beach Edition
For senators, tax cuts or coverage?
Policy expert says lawmakers “can’t do both” in Senate version of health care bill.
WASHINGTON — As they take up the campaign to replace the Affordable Care Act, Senate Republicans face a crucial choice between cutting taxes or preserving health coverage for millions of Americans, two competing demands that may yet derail the GOP push to roll back the 2010 health care law also known as Obamacare.
House Republicans, who passed their own ACA repeal measure last week, skirted the dilemma by cutting both taxes and coverage.
Their bill — embraced by President Donald Trump — slashed hundreds of billions of dollars in taxes, a key goal of GOP leaders and the White House as they seek to set the stage for a larger tax overhaul later this year.
At the same time, the House legislation cut more than $1 trillion in health care assistance to low- and moderate-income Americans, a retrenchment the nonpartisan Congressional Budget Office estimates would nearly double the ranks of the uninsured over the next decade to nearly 50 million.
In the Senate, coverage losses on that scale are unacceptable to many rankand-file Republicans whose states have seen major coverage gains under Obamacare. That makes the preservation of benefits one of the biggest challenges confronting Senate Majority Leader Mitch McConnell, R-Ky., and other GOP leaders. “Coverage matters,” Sen. Bill Cassidy, R-La., said Tuesday on MSNBC’s “Morning Joe” program, noting the importance of preserving Medicaid spending in the current law. “To someone (who) is lower-income, you’re going to need those dollars to cover that person.”
Yet moderating cuts to Medicaid and other government health programs without driving up budget deficits could force Republican senators to also dial back the tax cuts that many in the GOP want.
“It’s not that complicated. … If you want to use money for tax reform, you can’t have it for health coverage,” said Gail Wilensky, a veteran Republican health policy expert who ran the Medicare and Medicaid programs under President George H.W. Bush. “You can’t do both.”
McConnell had convened a group of GOP senators — quickly panned for including only white men — to develop Obamacare replacement legislation, and that panel largely excluded Republican lawmakers who are most concerned about coverage, including Cassidy.
On Tuesday, McConnell invited all Republicans to join in crafting the bill, after facing criticism that women were being excluded.
The trade-off between cutting taxes and preserving Americans’ health protections reflects, in part, the legislative procedure that congressional Republicans have chosen to repeal the Affordable Care Act.
That process, known as budget reconciliation, allows Senate Republicans to pass their Obamacare repeal with a simple majority, rather than the 60-vote super-majority that is usually required to pass controversial legislation. (Republicans have only a 52-48 majority in the Senate.)
But to qualify for budget reconciliation under Senate rules, the bill must reduce the federal deficit over the next decade.
Tax cuts alone typically do the opposite, driving up budget deficits.
The tax cuts in the House Republican health care bill total more than $600 billion over the next decade, according to independent analyses by the Congressional Budget Office and the congressional Joint Committee on Taxation.
They include most of the major taxes enacted in the 2010 health law to fund the law’s program for extending health insurance to more than 20 million previously uninsured Americans.
But eliminating so many taxes isn’t cheap.
So the Republican health care bill — known as the American Health Care Act — slashes hundreds of billions of dollars in federal health care spending, including an estimated $880 billion in federal money for Medicaid, the state-run government health plan that currently covers some 100 million Americans.
That would effectively cut federal Medicaid spending by more than a quarter over the next decade, an unprecedented reduction that independent analyses suggest would force states to sharply limit coverage for poor patients.
The wealthiest Americans stand to get a large tax break. By 2023, families making more than $1 million would see their taxes decrease by an average of more than $50,000, an analysis by the independent Urban-Brookings Tax Policy Center suggests.
Whether GOP senators will be able to moderate the reductions in health care assistance remains unclear.
Nevertheless, Senate Republicans likely still have at least $100 billion in budget savings that could be used to boost aid without increasing the federal deficit.
“They have some money to play with,” said Rohit Kumar, a tax and health care adviser at consulting giant PwC.
The problem for Senate Republicans is that still may not be enough to prevent unprecedented losses in health insurance coverage.