Ted Cruz: 1. Humanity: 0.
That is, sadly, the simplest way I can summarize the latest version of the Senate health care bill, which Republicans unveiled Thursday afternoon. Not much has fundamentally changed about the legislation, which still amounts to a large tax cut financed by shearing away large swaths of the social safety net. But it does represent a big win for the senator from Texas, as it includes a version of his proposal to let insurers sell cut-rate, unregulated coverage as long as they also offer plans that comply with all of Obamacare’s mandates.
Cruz, who is attempting to morph from the most hated man in the Senate into a conservative dealmaker, is very pleased with this development. He now supports the bill. His conservative buddy Mike Lee of Utah, who also pressed for the amendment, may get to yes as well, though he’s still officially undecided.
There is far less in the legislation to assuage the concerns of moderate Republicans, or for that matter lower-income Americans and middle class cancer patients who might fear for their health coverage. All of the draconian Medicaid cuts? Those are still there. The skimpy tax credits meant to help people buy private coverage? Still meager. The completely bonkers waivers that, as one widely respected health policy expert put it, could feasibly let state lawmakers spend their Obamacare funding on “cocaine and hookers” instead of health care? Still right there in the legislative text.
On the other hand, the new bill doesn’t include quite as many tax cuts for the wealthy. So it’s got that going for it.
The Cruz amendment is an odd piece of legislative maneuvering. Again: Under it, insurers can sell whatever kind of threadbare coverage they want if they also offer health plans that abide by all of the Affordable Care Act’s rules, meaning those products would cover the ACA’s expansive essential health benefits and couldn’t discriminate against customers with pre-existing conditions. It partially achieves the conservative goal of slaying Obamacare’s various consumer protections in order to let insurance carriers market cheapo coverage. But it also throws a bone to moderates, since it doesn’t entirely abandon sick Americans to the fangs of the free market.
There are some obvious problems with this approach. Young and physically well Americans will likely buy inexpensive, unregulated insurance plans, which will cost them relatively less since they’ll be priced based on health and won’t have to cover extensive benefits like mental health and maternity care. Many sick individuals, meanwhile, will need to buy Obamacare-compliant plans—which could send the cost of that coverage skyward.
This might not be such a concern for poorer customers, since they’ll receive subsidies that cap their premiums as a percentage of their incomes. (For them, it acts like a high-risk pool with unlimited funding, which isn’t so terrible.) But Americans who earn too much to qualify for those tax credits—they cut off at 350 percent of the poverty line, or about $71,000 for a family of three today—will get stuck paying full price. So if you’re sick and middle-to-upper-middle class and insured on the individual market, you’re stuck paying full fare for some very expensive coverage. The Kaiser Family Foundation has estimated that about 1.5 million Americans could end up in that boat.
Notably, the insurance industry itself seems to believe splitting the market this way could be a horrible, infeasible idea. “Unfortunately, this proposal would fracture and segment insurance markets into separate risk pools and create an un-level playing field that would lead to widespread adverse selection and unstable health insurance markets,” the trade group America’s Health Insurance Plans said in a memo that made the rounds earlier this week. The Blue Cross Blue Shield Association was similarly critical.
There are some reasons to think that the version of the Cruz amendment that showed up in Thursday’s draft wouldn’t be quite such a boondoggle. For one, the draft bill includes an additional $70 billion to help insurers with the cost of especially ill or high-risk patients, which should keep premiums down a bit. (It also bulks up the market stabilization fund that was already in the legislation by an additional $70 billion, which should help keep a lid on premiums.) Beyond that, the market probably won’t divide entirely into two tiers. The Senate doesn’t provide subsidies to buy unregulated insurance plans, so even if they’re healthy, lower-income Americans might be better off buying Obamacare-compliant coverage. That will balance out the health profile of the customer pool a bit.
Still, we’re talking about a plan designed to make healthy people pay less for their insurance and sick people pay more. That will probably be the ultimate outcome. I don’t know how many people not named Ted Cruz will be pleased with that.
And that brings us back to the rest of the bill, which gives moderates vanishingly little. Because cutting taxes on the wealthy while slashing Medicaid was a transparent act of class warfare on the poor, the legislation no longer nixes Obamacare’s tax on investment earnings or the additional Medicare tax on high earners. It also kicks in an extra $45 billion toward opioid treatment.
Beyond that? There’s not much. The bill’s insurance tax credits are still designed to buy low-end, high-deductible coverage, meaning poorer adults likely won’t be able to afford to use the health plans they purchase. The aforementioned waivers—which are theoretically meant to encourage health care “innovation”—still give states almost incredible latitude to divert federal money to god knows what. Meanwhile, Medicaid still gets brutalized—just as before, the bill ends Obamacare’s expansion of the program and throttles its traditional funding stream over time. Republican leaders have softened their approach a tiny bit around the edges by carving out exceptions meant to deal with public health emergencies, for instance, but the basic thrust hasn’t changed.
Of course, Medicaid has supposedly been the single biggest concern for senators like Maine’s Susan Collins, Nevada’s Dean Heller, West Virginia’s Shelley Moore Capito, and Ohio’s Rob Portman. Which is as it should be. We’re talking about America’s largest health insurance program, after all, a piece of the safety net that serves vulnerable populations like the elderly, disabled, and children. The individual market, which so much of the Obamacare debate has focused on, is a shrub by comparison.
If Republican moderates cave now and abandon their fight over the single most significant aspect of this legislation, they’ll show what a weak and insignificant faction of their party they truly are. They’ll show that the only GOPers who really matter are men like Ted Cruz.
