NESRI Media Center

The latest on the attacks on health care

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Publication Date: 
January 27, 2017

News is coming hard and fast out of Washington. In the realm of health care alone, the Affordable Care Act, Medicaid, and reproductive care are all under immediate attack (with Medicare and other programs, as we have written, also in the crosshairs). We know it's hard to keep up with, so we wrote this summary of where things stand now and what we should expect in the weeks ahead.

What’s going on?

President Trump and Congress have declared that changing how health care is paid for is one of their top priorities. They’ve made clear that they are moving quickly to repeal the Affordable Care Act (ACA) and cut funding for Medicaid and reproductive health care. They have already taken some actions, and are moving quickly to attack all three of these parts of our health care system. News is developing by the day and even by the hour.

Two weeks ago both the Senate and the House passed budget resolutions in which they set themselves a deadline of today (Friday, January 27th) to pass a full repeal bill. A few senators have already released possible plans this week, and Republicans in Congress are meeting in Philadelphia today, joined by President Trump, to try to reach a consensus on what policies and legislative strategy they will pursue. There are signals that legislators are giving themselves until early this spring to develop a replacement plan.

We don’t know yet what exact policies Congressional leaders will push, but a number of Republican proposals from recent years—and plans in the last days and weeks from Senators Susan Collins and Bill Cassidy, Senator Rand Paul, and the conservative Republican Study Committee—give us a good sense of what to expect. We should expect a bill (or a series of bills) that dismantles and replaces key pieces of the ACA and makes major changes to Medicaid and reproductive health funding. All of the proposals on the table boil down to budget cuts and loosened regulations that will slash health care access for millions of people. Not everyone will be affected, but tens of millions of people will, and these reforms will specifically harm people in our communities who have the least money and people with the greatest medical needs.

What might replace the ACA?

It is easy for Congress to repeal the ACA. It is much harder to come up with a replacement. There is literally no way for an insurance market to guarantee everyone health care coverage and access: that’s just not what markets do.[1] House Speaker Paul Ryan and other Congressional leaders have made clear that their big goal with repealing the ACA is to cut federal spending (and to cut taxes for the wealthy and corporations). We know that they could reduce federal spending on health care by creating a universal, publicly financed health care system and getting rid of the predatory private insurers, but they’re not going to do that. It is impossible to reduce federal spending and to maintain current levels of insurance coverage, so something has to give.

Congress can’t simply cut subsidies because that would send the already tumultuous ACA marketplaces into a tailspin, and they refuse to use public regulations to rein in the exorbitant prices charged by hospital and pharmaceutical corporations. Their only remaining option is to reduce health care spending by reducing people’s access to care. They can do that in one of two ways.

One approach Congress might take is to make the insurance that people have skimpier by allowing insurance companies to exclude more and more care from what they cover. The other option is to slowly push people off of insurance over time through rules that basically punish poor people and people with more medical needs. Examples of these rules include work requirements and continuous coverage requirements, both of which are impossible for people to meet if they have chronic health conditions that prevent them from working continuously, have an incarceration record, work jobs without benefits, stay home to care for loved ones, or can’t find jobs because state and federal policies neither guarantee work with dignity nor income as basic human rights.

This, of course, is not how Congress will frame what they are doing. They will say that they are preserving health insurance coverage, removing onerous regulations, and giving people incentives to do the right things. We have to call them out and reveal the real effects of their inhumane policies.

What will happen to Medicaid?

Congressional leaders and President Trump are in agreement that they want to cut Medicaid funding by using “block grants.” Right now, the federal government pays states based on the actual cost of Medicaid, so when more people enroll and medical costs go up, states get more money. With a block grant, Congress would instead give each state a fixed sum for Medicaid spending. This would have the effect of immediately slashing billions of dollars in Medicaid money in year one, and would keep cutting more and more every year. This choking off of Medicaid funding would force states to start cutting people’s care by doing things like pushing people out of the program, raising costs (premiums, copays and deductibles) to reduce people’s access, and cutting what Medicaid covers. All of this would be a disaster. Medicaid is currently an entitlement that is guaranteed as a right to everyone who meets the requirements. Block granting would end that.

The good news is that turning Medicaid into a block grant program would require 60 votes in the Senate, which means Republicans would have to win Democratic votes. A strong popular resistance to block granting Medicaid could stop this from happening.

What’s happening to reproductive care?

Congress has pledged that their ACA repeal will also cut federal funding for Planned Parenthood. In addition, President Trump has already signed an executive order banning federal funds from going to any international organizations that provide abortion services. (This executive order has become a ritual in Washington: every Republican president signs it when they enter office, and every Democratic president cancels it.)

How soon will all of this take effect?

Congress plans to pass legislation in the coming weeks, but most people are guessing that they will delay most of the effects until after the November 2018 midterm election. They know that if people realize that what they’re doing is cutting people’s health care access in order to give tax breaks to the wealthy and to big corporations, people will be angry, and they don’t want to risk political fallout before the election. The good news is that means everyone’s health insurance and Medicaid is probably safe for one or two years. It’s too soon for any of us to predict what will happen beyond that.

What about Medicare?

Changes to Medicare aren’t on the table right now, but some members of Congress have signaled that they may try to make changes to the program as soon as this spring. They want to privatize Medicare by taking public dollars and turning them into vouchers that would be paid to private insurance companies. Wealthy people would be fine, because they have enough money to pay for comprehensive insurance and to cover out-of-pocket costs, but vouchers would limit access to care for everyone else by forcing people onto plans with narrow networks, high out of pocket costs, and limited coverage.

 


[1] In markets, sellers (in this market, insurance companies) set prices high to make profits. This excludes people who can’t or don’t want to pay that much. Both the Republican and Democratic Parties are committed to market-based insurance, but because our society is so unequal and a lot of us don’t have enough money to pay what insurance companies charge, the only way that policies can expand insurance coverage through the market is by subsidizing and regulating the market. The ACA does this by providing subsidies to both individuals and insurance companies, and it uses regulations to require insurers to do things like cover children up to the age of 26; stop discriminating against people with pre-existing conditions, against women, older people, and others; and using a tax penalty to try to incentivize everyone to get insurance. The ways that the ACA subsidized and regulated the insurance market brought improvements over what we had before: more people now have insurance, and all plans offer at least a basic minimum of coverage. But because a market is designed to make profits for insurers, not to guarantee universal, equitable health care access, no market-based insurance system can never fulfill the human right to health care.