The newest version of the Senate plan to repeal and replace the Affordable Care Act is insupportable. It has small improvements worth noting, but not enough to justify its passage.
The best part of Senate Majority Leader Mitch McConnell’s revised plan, released Thursday, would let people use money from their tax-free health savings accounts to pay for insurance. It’s a travesty that premium payments are not tax-free for people who buy their own coverage, but they are for both the employer and employee contributions to job-provided health insurance. Other improvements include an added $45 billion to treat opioid addiction and $70 billion extra to help states hold down premiums and other costs.
But the plan would still decimate Medicaid, knocking an estimated 15 million people off the rolls. It would keep in place a 3.8 percent Affordable Care Act tax on many higher-earning individuals, even as drug, insurance and medical device companies keep their tax cuts. And it includes an amendment from Sen. Ted Cruz that would let insurers sell substandard plans people could use federal subsidies to buy, as long as the companies also offer comprehensive ones. That means healthy young people buying skimpy coverage, and an elderly and ill pool of customers buying much more expensive broad plans. It’s such a destructive idea that the insurance companies that would be freed to offer the new products oppose the option wholeheartedly.
Alternate voices in GOP debate
But all is not lost. A competing and very different plan also was offered Thursday by Republican Sens. Lindsey Graham and Bill Cassidy, a physician. The Graham-Cassidy plan, which the two say they will offer as an amendment if McConnell’s plan doesn’t get enough support, is intriguing. It would allocate $500 billion for Medicaid to allow states to pursue their own strategies and rules for covering the poor. And it would pay for the additional Medicaid funding by keeping that 3.8 percent income tax on high earners. This is traditionally how Medicaid worked, with states covering as they chose and the federal government paying much of the tab. Such differences were never fully eliminated by the Affordable Care Act, as 19 states did not take the Medicaid expansion money Obamacare offered to cover more low-income residents. And this is a compromise many Democrats could accept, as long as their states could maintain their regulations.
Although both of these visions need to be scored by the Congressional Budget Office, neither is good enough to be the blueprint for our nation’s health care system.
Compromise might be possible
Both parties always knew the Affordable Care Act had flaws. Both plans show an openness to compromise. McConnell’s new proposal points to an increasingly thoughtful environment on policy. If that can be nurtured, compromise might be possible and passage plausible.
The hard-line approach to ending Obamacare by simply decimating coverage and slashing taxes hasn’t proved popular enough to pass. To repeal and replace the Affordable Care Act, the GOP might have to improve it, even if that means picking up Democratic moderates and alienating GOP hard-liners. Which is, actually, how the best legislation works.