House Republicans vote to slash more than $1 trillion from federal health insurance while giving giant tax cut to nation's wealthiest

Ben Horowitz
May 16, 2017
Earlier this month, Republicans in the U.S. House of Representatives voted to cut roughly $1 trillion of support for Americans' health care while giving hundreds of billions of dollars in tax breaks to millionaires and insurance companies. The version of the American Health Care Act (AHCA) that passed the House would also gut many of the Affordable Care Act's protections for people with "pre-existing conditions," allowing insurers to charge people more for being pregnant or surviving cancer.

As the AHCA heads to the Senate, lawmakers must re-focus on health reform that improves the health care situation. They should build on the strengths of the Affordable Care Act rather than reversing the historic coverage gains made in the past several years. Health reform that moves us in the right direction must maintain or increase the number of Americans with health insurance, lower health insurance premiums and deductibles, and preserve or strengthen protections for pre-existing conditions and benefit standards.

As it stands, the AHCA would make the country's health landscape worse. The full impact of the AHCA remains unclear because House Republicans chose to vote before the non-partisan Congressional Budget Office (CBO) could complete an analysis. However, here's what we know the bill would do:
  • Slash access to affordable health insurance for low-income workers, people with disabilities, seniors, children, parents and others. The AHCA contains $800 billion in cuts to Medicaid over the next 10 years. Medicaid provides quality coverage to the lowest-income Americans, and its costs are growing more slowly than those in private employer plans. No amount of alleged "flexibility" for states regarding their Medicaid programs will counter this dramatic loss in resources. As a result, health care coverage for 1.2 million Minnesotans will be put at risk as Minnesota loses $2.5 billion in federal funding by FY 2021.
  • Dramatically increase the number of uninsured Americans. In March, the CBO estimated that 24 million people would no longer have insurance by 2026 if the original AHCA passed.
  • Gut protections for people with pre-existing conditions. In the new bill, people with pre-existing conditions like hypertension or diabetes could be charged higher premiums by insurance companies, who will once again be allowed to discriminate their pricing based on such factors. This will be particularly hard on older Americans. More than four of every five Americans aged 55 to 64 has at least one pre-existing condition. On top of the higher costs they will face for health conditions that are often beyond their control, the bill also allows older Americans to be charged five times as much for health insurance premiums as their younger neighbors.
  • Inadequately fund high-risk pools, a health care idea that has failed in the past. People with severe medical conditions would be sent into high-risk pools, but these would be underfunded. Because the bill does not allocate enough funding to sustainably support these efforts, such pools would face the same problems such policy interventions faced in the past. Our sickest neighbors will face exorbitant premiums, too-low lifetime limits, and reductions in benefits.
  • Cut taxes for millionaires and the medical industry. Over 10 years, the AHCA provides $275 billion in cuts that will only benefit households earning more than $200,000; the largest cuts will go to households with incomes over $1 million. On top of that, over the same time period, the bill provides $145 billion in tax cuts to insurers and medical device companies while simultaneously allowing insurers to charge sick people higher costs for their care. And these tax cuts would be just the start. As Majority Leader Paul Ryan has said, one goal of the AHCA is making further tax cuts for corporations possible.
  • Weaken and reduce employer-sponsored health insurance. The CBO projected that 7 million fewer Americans would be covered by their employers as a result of the original AHCA proposal. Under the latest version, employees of large companies could face additional risks. Current law allows large employers to choose which state's health insurance regulations they'd like to follow when they craft their employee benefits. So, if just one state were to use the AHCA's provision that allows a waiver of the ACA's requirements that prohibit lifetime limits, large employers everywhere would be allowed to institute lifetime limits within their insurance plans, placing workers at large companies at great financial risk.
We'll continue to keep you in the loop on the latest developments in the national health care debate here on Minnesota Budget Bites. Stay tuned for an update once the Congressional Budget Office releases their analysis of the version of the AHCA that has already passed the House of Representatives.

-Ben Horowitz