The Cruelest, Most Dishonest Part of the Republican Healthcare Plan

Healthcare policy can be complicated, but the simple truth is that Republicans don't want the government to provide insurance to poor people.

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May 8 2017, 5:57pm

Photo of Republicans celebrating the AHCA passing the House by Cheriss May/NurPhoto via Getty Images

One of the most important things about the American Health Care Act (AHCA), the bill passed in the House on Thursday that would strip away many of the benefits and regulations of the Affordable Care Act (ACA), is what it would do to Medicaid. If the AHCA became law, it would strip $880 billion over ten years from the program that provides health services to the poor, especially needy populations like children, new mothers, and the chronically ill. This is a big, big deal—one of the centerpieces of the bill—and it's telling that Republicans are arguing that it won't be that important.

On Sunday, Health and Human Services Secretary Tom Price went on CNN's Face the Nation and said that taking $880 billion from Medicaid won't hurt patients, that it will actually help them by giving states more freedom to administer their individual Medicaid programs. On ABC's This Week, House Speaker Paul Ryan characterized the lost $880 billion as "giving the states the ability to customize Medicaid to meet the particular needs of their vulnerable populations" and claimed that care would be improved because the AHCA would also end "the micromanagement of Medicaid by the federal government."

Explaining what the hell they're talking about will take a minute. Because the $880 billion is not a straightforward cut. Currently, how Medicaid works is the federal government matches state funding to provide care to low-income people and others who need a lot of medical treatment; in exchange, the federal government hands down some requirements for how this money should be spent. Republicans argue that these requirements are burdensome and instead want a "block grant" system where the federal government gives states a set amount of money to spend as they wish, with less oversight. Under the AHCA, that amount would be capped based on how many people each state has enrolled in Medicaid.

Though that part of the bill wouldn't kick in until 2020, the new limit would force states to make hard decisions.

"With less federal reimbursement for Medicaid, states would need to decide whether to commit more of their own resources to finance the program at current-law levels or whether to reduce spending by cutting payments to health care providers and health plans, eliminating optional services, restricting eligibility for enrollment, or (to the extent feasible) arriving at more efficient methods for delivering services," reads a Congressional Budget Office report on an old version of the AHCA. (The current version of the bill hasn't been analyzed by the CBO, but the parts about Medicaid haven't changed.)

Basically, the federal government would spend less on insuring poor people because fewer poor people would be able to get insurance.

Additionally, the AHCA would scrap the parts of the ACA that give more federal money to the states to provide care to new Medicaid enrollees, making Medicaid expansion less attractive. Again, a lot would depend on what states would decide to do, and the law wouldn't take full effect until a few years from now. But according to the CBO, 9 million fewer people would have Medicaid by 2020 as a result of the AHCA, and that number would rise to 14 million by 2026. Basically, the federal government would spend less on insuring poor people because fewer poor people would be able to get insurance.

The new restrictions on Medicaid spending would hurt even states like Texas that didn't expand the program as the ACA allowed. Children would be disproportionately affected since so many of them rely on Medicaid; so would people with chronic conditions who pay for care with a combination of Medicaid and Medicare, which provides insurance for seniors and people with disabilities. Less Medicaid money would also hurt the hospital industry—meanwhile, more low-income people who lacked insurance would be coming to emergency rooms for treatment. Those people might not be denied access to medicine, but they might be forced into bankruptcy by healthcare costs. Oh, and the AHCA would also stop Medicaid funds from going to Planned Parenthood for at least a year, which would lead to a lot of women going without the organization's services.

What do Republicans want to do with the savings caused by all of this disruption? Cut taxes for the rich.

The GOP Establishment has wanted to "reform"—a.k.a. cut—Medicaid, Medicare, and Social Security for years, supposedly on the grounds that these entitlement programs are going to become unaffordable over time. That's why Donald Trump's campaign not to cut those programs was news, though since he endorses the AHCA it's obvious that that promise was something we weren't supposed to take him literally or seriously on. Paul Ryan once joked he was dreaming about converting Medicaid into block grants way back when he was going to conservative keggers in his 20s.

Not all Republicans are onboard with this provision in the AHCA, however. "By repealing Obamacare's Medicaid expansion and replacing it with a flat tax credit that doesn't provide enough assistance to the working poor, millions with incomes above the poverty line are going to lose their insurance under Ryancare," wrote Avik Roy, a former healthcare policy adviser to Mitt Romney who supports other parts of the AHCA. Many other experts are wary about these changes to Medicaid, as are Republican senators in states that have expanded Medicaid. It's a part of the bill that very likely won't get past the Senate, which is good news for the tens of millions of poor or high-need people who rely on the program.

But the inclusion of such harsh spending cuts as a key part of a reform plan says a lot about the philosophy that many Republicans embrace. They are eager to expand military spending and put more money into border security (though few want a wall). They're perfectly fine with the surveillance state, unless of course it's politically convenient for them to be against it. Tax cuts that balloon the deficit? They'll pay for themselves, whatever. But when the federal government is helping more poor people access healthcare, all of a sudden Republicans are the voice of fiscal restraint. In the words of Democratic senator Kamala Harris, "What the fuck is that?"

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