What the Republicans’ Senate Health-Care Bill Means for America
On Thursday, Senate Republicans unveiled their bill to replace the Affordable Care Act. Below, New Yorker writers offer some initial reactions to the news.
The Senate bill is really three separate proposals. In the private-insurance market, it amounts to what Larry Levitt, a health-care expert at the Kaiser Family Foundation, calls “Obamacare-lite.” As for Medicaid—the federal program that provides health services to roughly seventy-five million Americans, most of whom are poor or elderly or are children—the bill involves much bigger, and more harmful, changes. Finally, the legislation would deliver a hefty tax cut to some of the wealthiest households in the country.
In the individual market, the bill offers somewhat more generous subsidies for people buying individual plans on government-run exchanges than the ones in the House G.O.P.’s American Health Care Act. Because the subsidies would be tied to income and the actual cost of insurance rather than age, they would be substantially bigger for old people, who face much higher premiums. This would alleviate one of the House bill’s politically toxic features, which was that people approaching retirement age could have faced huge price increases. In a cost-saving move, the threshold income for eligibility for subsidies would be reduced from four hundred per cent of the poverty line to three hundred and fifty per cent. This means that many individuals who earn forty to fifty thousand dollars a year would lose their subsidies, as would families earning roughly sixty thousand dollars to a hundred thousand dollars. (The exact thresholds depend on how many children the family has.) In addition, the Senate bill restores the prohibition on insurers denying people coverage because of preëxisting conditions. However, states would be able to opt out of this requirement, and others, by obtaining a federal waiver.
The Affordable Care Act’s biggest achievement came through its expansion of Medicaid and its sibling, the Children’s Health Insurance Plan. By raising the income-eligibility threshold for households and allowing states to cover low-income adults who don’t have children, some thirteen million people have been added to the Medicaid rolls since January, 2014. But the Senate bill would reverse this extension, over three years, starting in 2021. Additionally, it would drastically change the future financing of Medicaid, placing a cap on federal subsidies per person and putting strict limits on the subsidies’ future growth. (The funding formula is actually less generous than the one in the House legislation.) Like the House bill, these changes would cause millions of Americans to lose their health coverage. It would also generate hundreds of billions of dollars of cost savings over the next ten years. We’ll see some precise projections in the coming days, after the Congressional Budget Office releases its analysis of the bill. For some reason, the Republicans’ desire to slash Medicaid has received less coverage than their proposals for the private-insurance market have. This should be at the center of the political debate.
Now, on to that big tax cut for the rich. To help pay for its spending items, the Affordable Care Act obliged households that earn more than a quarter of a million dollars a year to pay a new 3.8-per-cent tax on their annual investment income, such as interest payments and capital gains, and a 0.9-per-cent surcharge on their ordinary income. Like the legislation passed in the House, the Senate bill eliminates these taxes—a major handout to the mega-rich. According to a recent analysis by the nonpartisan Tax Policy Center, the top 0.1 per cent of earners—i.e., households that make at least 3.9 million dollars a year—would receive a tax cut of more than two hundred thousand dollars. And, unlike other aspects of the bill, this one would go into effect immediately.
Over all, then, this bill largely sticks to the template laid down by House Speaker Paul Ryan and his colleagues. It modifies, but doesn’t abolish, the principle that the federal government should provide financial assistance to middle-income people who aren’t covered by their employers. It socks it to the poor, and it gives a handout to the rich.—John Cassidy
The prospects of the health-care-repeal bill rest with about a half-dozen uncommitted Republican senators, among them Rand Paul, of Kentucky, and Shelley Moore Capito, of West Virginia. These two are, in certain ways, opposites. Paul, an ideologue who sometimes seems like an undergraduate, is concerned that the bill leaves too much of Obamacare in place. Capito, a quieter and shrewder politician, worries that the bill will leave too many unprotected. What these two lawmakers have in common is the kind of territory they represent. In West Virginia, more than a hundred and fifty thousand people, about a tenth of the state’s population, gained insurance through Obamacare. In Kentucky, it was nearly half a million. People who live in these two states are as vulnerable to a repeal of the law as anyone in the country. But they are also places where the national Democratic Party is in bad decline. In November, Donald Trump won Kentucky by nearly thirty points. He won West Virginia by more than forty.
It will be a loud week. The Senate is planning to vote on its bill, which was just introduced to Republican senators, next Thursday, just a day before the chamber departs for its summer recess. Democrats and liberal groups will be working furiously to put pressure on the few undecided Republicans. By lunchtime on Thursday, Capitol Police were already removing protesters—some of them in wheelchairs—from outside Senate Majority Leader Mitch McConnell’s office. But in certain crucial cases—West Virginia and Kentucky among them—this pressure will be depressingly indirect. The hundreds of thousands of people in those states who stand to lose a great deal will have only a weak voice in this debate, because the party that is trying to protect them has only a weak local presence.
The talk about the direction of the Democratic Party often assumes an executive tone. Where should assets be deployed? What is the brand? But this week the geographic gap between the Party and the people it wants to represent seems enormous. “I promised voters that I would repeal—vote to repeal—Obamacare, and everything I hear sounds like Obamacare-lite,” Paul said on Wednesday. Capito, who has said that she has major concerns about the Republican plan, said on Wednesday night, “I don’t have any new news . . . that would cause me to change that sentiment.” That hesitancy matters. But the map matters, too.—Benjamin Wallace-Wells
On October 6, 1977, the House of Representatives voted, overwhelmingly, to pass the Labor Reform Act, which was designed to modernize the National Labor Relations Board. The N.L.R.B. was created, in 1935, to protect workers’ ability to organize into unions, but in the decades since it had become outdated and sclerotic, taking months or years to resolve even routine disputes. The Labor Reform Act was intended to increase the size of the N.L.R.B. and to speed up its processes. In the House, the measure was so uncontroversial that a couple of dozen Republican representatives joined with the Democrats to vote for the measure. It was expected to pass the Senate quickly.
Instead, a handful of Republicans in the Senate, led by Orrin Hatch, of Utah, launched a nearly yearlong effort to destroy the measure. Hatch helped mobilize a massive lobbying effort, in which planeloads of business owners flew to the Capitol to argue against the bill. Labor officials had their own campaign—but it was relatively meagre. Following a series of filibusters and other parliamentary maneuvers, the bill died in committee, in September, 1978. The fate of the Labor Reform Act in those eleven months, from triumphant House vote to quiet Senate collapse, heralded a transformation in American politics. The New Deal consensus—in which significant numbers of market-oriented Republicans agreed with Democrats that workers and those who couldn’t get work both needed protection, and that the economy functioned best when its growth was shared—began to collapse. This was the political dynamic that, soon after, brought about the election of Ronald Reagan. It helped make America a far worse place for working people and a far better one for rich people: trade, computer technology, and other changes allowed rich people to get richer without needing to insure that working-class Americans had buying power. Since that time, the U.S. economy has roughly doubled in size, but nearly all of the growth has accrued for the richest twenty per cent of Americans, and most of that to the richest one per cent.
In many ways, the anger that fuelled last year’s Presidential election could be seen as a response to this post-New Deal economic system. And these past two months—between the House’s passage of its Obamacare-repeal bill and the Senate’s presentation, on Thursday, of its own, nearly identical health-care measure—mark another shift in the country’s politics. This bill does openly what the Labor Reform Act did with considerable more subtlety: it takes hundreds of billions of dollars from the poorest and most vulnerable and gives it to the richest. It is, by any rational metric, the opposite of what our country needs at this moment. And savvy, self-protective Republican lawmakers feel no need to offer an explanation. This is not a health-care bill; it is a wealth grab by the wealthy. Political-opinion polls show that most Americans know that. Do Republicans care?—Adam Davidson
