"Better Care also repeals virtually all of the
ACA’s taxes on wealthy individuals and
corporations, effecting one of the largest
redistributions of wealth from the poor to rich
in US history."
US Senate health care bill guts Medicaid, slashes taxes for the wealthy
By Kate Randall
23 June 2017
23 June 2017
US Senate Republicans unveiled on Thursday the Better Care Reconciliation Act, their version of a plan to “repeal and replace” the Affordable Care Act (ACA), the Obama administration’s signature domestic legislation. The US House passed its own version, the American Health Care Act (AHCA), early last month.
Like the House plan, the Senate version guts Medicaid, the health insurance program for the poor and disabled jointly administered by the federal government and the states, slashing its funding by hundreds of billions of dollars. It would mark the effective end of the program, which currently covers 75 million Americans, as a guaranteed program based on need.
Better Care also repeals virtually all of the ACA’s taxes on wealthy individuals and corporations, effecting one of the largest redistributions of wealth from the poor to rich in US history. These tax cuts would be paid for by slashing health care coverage and raising costs for the vast majority of ordinary Americans, in particular targeting the poor, the elderly, the disabled, and those with preexisting conditions and disabilities.
The plan was drafted in secrecy by a “working group” of 13 senators, a process drawing criticism from both Republican and Democratic senators. As of Thursday evening, a group of four ultra-right Republican senators said they would not sign on to the bill, as it was not draconian enough, while other more moderate Senate Republicans said they needed to study the bill before making a decision.
However, it is likely that Majority Leader Mitch McConnell will be able to garner the votes of 50 out of 52 Republican senators to pass the legislation with a simple majority, counting on the vote of Vice President Mike Pence to break a tie. The bill would then be sent to a conference with the House, where a final version would be agreed, before being sent to President Trump to sign. Senate leaders hope to receive a scoring on the bill from the Congressional Budget Office (CBO) early next week and vote on it before the July 4 recess.
The Senate bill would convert Medicaid to a “per capita cap” funding system, in which states would get a lump sum from the federal government for each enrollee. States could also choose to receive a block grant instead, not tied to the number of Medicaid enrollees. This would effectively end Medicaid as an “entitlement” program, so-called because the funding is expanded automatically as people qualify on the basis of need.
The legislation would also change the way federal payments to Medicaid are calculated. The Senate bill would tether funding growth to the Medical Consumer Price Index plus 1 percentage point through 2025, then change over to the urban Consumer Price Index (CPI). This would amount to a funding cut to Medicaid, as the cost of health care typically goes up faster than the CPI.
The bill would also end the expansion of Medicaid under Obamacare by 2021. This extended coverage to an estimated 14 million people, mainly low-income adults earning below 138 percent of the poverty line (about $15,000 for an individual), in the 31 states plus the District of Columbia that opted to participate in the expansion.
Better Care defunds Planned Parenthood for one year, meaning Medicaid patients could no longer seek treatment of any kind at the nonprofit organization’s clinics. This will result in forgone screenings, less access to contraceptive and abortion services, and more unintended pregnancies, as well as maternal and infant deaths.
CBO scoring of the House bill, which makes similar cuts, estimated it would slash overall funding to Medicaid by $880 billion over a decade. The cutbacks would force states to remove people from Medicaid, reduce the range of services covered, and cut reimbursements to doctors, hospitals and drug companies.
The Senate bill cuts taxes on net investment income for wealthy people, repeals an ACA Medicare tax on wealthy people, and eliminates taxes on health insurers, medical device companies and tanning salons.
Better Care repeals a 3.8 percent tax on net investment income (capital gains, dividends, etc.) for individuals making more than $200,000 a year or for couples making more than $250,000. In one of the bill’s most brazen giveaways to the rich, this repeal is not only immediate, but retroactive to capital gains made earlier this year.
The Tax Policy Center estimates that around 90 percent of the tax cuts will go to households with more than $700,000 in annual income, the top 1 percent, who will be freed from the 3.8 percent tax, along with a 0.9 percent payroll surtax on their salaries.
Smaller subsidies, skimpier coverage
The bill would make much less generous subsidies available to low- and middle-income people to purchase health insurance (people earning less than 350 percent of the poverty line, compared to the ACA’s 400 percent cutoff). Individuals earning less than $41,580 and families of four making less than $85,050 would be covered. However, the size of the tax credits would be tied to what it takes to purchase insurance with poorer coverage.
Insurance companies would be able to charge older adults not yet eligible for Medicare five times more than younger people, compared to three times more under Obamacare. The bill would also change the definition of “affordable” insurance. For example, a 60-year-old who earns $35,640 a year would be required to spend 16.2 percent of annual income, or $5,773, before receiving any assistance from the government. Overall, working-class families would pay higher premiums, deductibles and out-of-pocket costs for health insurance that covers much less.
Essential benefits and preexisting conditions
The Senate bill would allow states to seek a waiver from ACA requirements for insurers to cover essential benefits, such as maternity care, prescription drugs, substance abuse and mental health services, emergency care, and other vital services.
While Senate Republicans claim their legislation keeps in place protections for those with preexisting conditions, in practice insurers would be able to skirt these protections by simply offering plans that don’t cover a range of preconditions, such as diabetes, cancer, prenatal care, etc.
Such waivers could also affect those with employer-sponsored insurance. For example, large employers in a waiver state could restrict services, impose lifetime limits on health care costs and eliminate out-of-pocket caps from their plans.
Better Care eliminates the individual mandate, which requires those without coverage from their employer or from a government program to purchase insurance or pay a tax penalty. Due to the “reconciliation” process, the bill cannot eliminate the mandate, but it reduces the penalty to zero. Employers with 50 or more employers would also not be penalized if they fail to provide insurance to their workers.
While gutting the mandates, the Senate plan keeps the insurance marketplaces set up under the ACA intact, but insurance will be more expensive and cover less.
While Republicans in both the Senate and House, as well as the Trump administration, have set as their goal repealing and replacing Obamacare, both the AHCA and the Better Care Reconciliation Act keep the ACA’s basic structure in place—all while repealing taxes for the wealthy, gutting Medicaid and raising costs and cutting services for working and middle-class people.
This is in part the result of the procedure chosen for repeal. Lacking the 60 votes to overcome a Senate filibuster, the Republican leadership chose to employ “reconciliation,” which is limited to a single bill each year, and requires only a simple majority. The rules governing reconciliation are arcane, and prevent changes in policy that have no fiscal impact, such as a ban on insurance companies covering abortion, which was dropped from the Senate bill.
But in the final analysis, there was no need to repeal Obamacare outright, since it accomplishes many of the goals agreed on by both capitalist parties. As the WSWS has maintained from the start, Obamacare was aimed at cutting costs for the government and corporations while rationing health care for the vast majority. Whatever version of “Trumpcare” eventually emerges from Congress for the president to sign will take the tendencies already present in the Affordable Care Act, then strip off the limited concessions it offered in the way of Medicaid expansion, essential services and other inadequate protections.
Obamacare took as its starting point the entrenched for-profit system of health care delivery in America, which is based on enriching the insurance companies, the pharmaceutical companies and the giant hospital chains.
With this as its basis, the ACA had as its aim the development of an even more openly class-based health care system than what previously existed, in which workers and their families are left with rising costs, cut-rate care, or no coverage at all, and the super-rich and privileged upper-middle-class layer avail themselves of the best medical care that money can buy.
As we wrote last year, through its tax credit system and marketplace exchanges, “[T]he ACA essentially establishes a voucher system, whereby minimal government subsidies are given to individuals to purchase private health insurance. It thereby serves as a model for the future privatization of the key government programs, Medicare and Medicaid, wrenched from the ruling class through bitter working class struggles in the last century.”
The Democrats have predictably denounced the Senate plan as a boondoggle for the rich, with House Minority Leader Nancy Pelosi and Senate Minority Leader Chuck Schumer railing against the tax breaks for the rich and the millions who stand to lose coverage.
But they have little to offer in way of an alternative, except the maintenance of the Obamacare status quo, or “working with” the Republicans to fix it. That is because they believe in the underlying premise that health care in America must remain at the mercy of the for-profit health care industry, and that the provision of health care must conform to the interests of the capitalist market.
As the WSWS wrote in July 2009, more than six months before the ACA became law, the Obama administration’s “drive for an overhaul of the health care system, far from representing a reform designed to provide universal coverage and increased access to quality care, marks an unprecedented attack on health care for the working population. It is an effort to roll back social gains associated with the enactment of Medicare in 1965.”
The Republicans’ attack on Medicaid, embodied in both the AHCA and the Better Care bill, marks a further step in this direction.
The Democrats’ fraudulent opposition to Trumpcare
By Kate Randall
21 June 2017
Senate Republicans are working feverishly to pass their version of a bill to “repeal and replace” the Affordable Care Act (ACA), having set themselves an arbitrary deadline of securing its passage before the July 4 congressional recess. Early last month, House Republicans passed the American Health Care Act (AHCA), celebrating in the White House Rose Garden with President Trump, who said of the bill, “It’s a great plan, and I believe it’s going to get better.”
A group of 13 Republicans senators is working behind closed doors on the Senate version of the legislation. Senate Majority Leader Mitch McConnell plans to push the legislation—which concerns one-sixth of the US economy, and which will affect the health and lives of tens of millions of Americans—with no committee hearings, no public mark-up (drafting and editing) of the bill, and only limited debate.
It is no secret that the clandestine nature of the Senate “working group’s” negotiations is due to the AHCA’s wide unpopularity, with a recent poll showing that only 20 percent of Americans approve of it while 57 percent disapprove. The broad opposition is due to its draconian features, particularly the gutting of Medicaid, the social insurance program for the poor jointly funded by the federal government and the states. The AHCA would effectively end Medicaid as a guaranteed benefit based on need by placing a per-capita cap on overall spending.
The AHCA would slash $824 billion from Medicaid and would end the ACA’s expansion of Medicaid to low-income adults, causing 14 million newly insured people to lose their benefits over a decade. All told, the Congressional Budget Office estimates that 23 million people would become uninsured in 10 years under the AHCA. At the same time, the bill would slash taxes for corporations and wealthy individuals, while boosting the already multibillion-dollar profits of the health care industry.
McConnell has an additional reason for secrecy, since any divisions within the Republican caucus threaten passage of the bill, and concessions made to far-right senators like Ted Cruz and Rand Paul could provoke opposition from a group of “moderates” from states with large Medicaid populations, and vice versa.
Under the “reconciliation” process chosen for the health care legislation, the Republican leadership can push through the bill despite holding only a narrow 52-48 majority, providing they lose no more than two Republicans, with Vice President Mike Pence casting a tie-breaking vote.
Senate Democrats profess outrage over the closed-door nature of the Republicans’ deliberations. They staged a talk-a-thon on the Senate floor Monday night, stalling chamber proceedings through a series of parliamentary maneuvers. A few senators live-streamed their “search” for the elusive legislation, driving around the capital. All of these stunts amount to so much hot air. The Democrats are incapable of mounting a true opposition to the Republicans’ vicious assault on the health care of ordinary Americans because they share their class objectives.
Numerous media commentaries have pointed to the Democrats’ “powerless” position to oppose the Republicans’ plan, due to the Republicans’ 52-48 Senate majority. This is only valid in terms of parliamentary arithmetic: the vast majority of the American people oppose the House bill and will oppose the Senate bill once they learn its provisions. But the Democratic Party is unwilling and unable to mobilize this popular opposition.
Every Senate Democrat, including so-called independent and self-professed “democratic socialist” Bernie Sanders, portrays Obamacare as a progressive social reform, or at least a “step in the right direction,” concealing the reactionary and anti-working-class character of the Affordable Care Act.
Obamacare was aimed from the start at cutting costs for the government and corporations while rationing health care for the vast majority. In that sense, the Republicans have invented nothing new. Whatever version of “Trumpcare” eventually passes the Senate will only take the tendencies already present in Obamacare and make them worse: imposing more and more of the cost of health care on individual workers and their families.
The logic of this process, under both Democrats and Republicans, is the development of an openly two-class health care system: the best health care money can buy for the super-rich and a privileged upper-middle-class layer; and for the vast majority of the population, a cut-rate system, starved for funds and personnel, offering inadequate and overpriced care, if any at all.
In response to Trump and the Republicans’ howls that the ACA is “failing” and “imploding”—through rising premiums and deductibles and dwindling networks of insurers—the Democrats beg for a seat at the table to “fix” Obamacare. This is a euphemism for making further concessions to the demands of the insurance companies and other corporate interests by further restricting subsidies for low-income purchasers of insurance plans, cutting business taxes and implementing other regressive measures.
Any health care overhaul hatched in Washington will be based on the for-profit health care system, enriching the insurance companies, drug companies, hospital chains and medical device companies and the CEOs that run them.
Looking beyond the Democrats’ bluster, working people need to actually take stock of what is at stake in the Republicans’ plan. The most fundamental attack is the gutting of Medicaid, one of the last social reforms wrested from the ruling elite through working-class struggle. While limited in nature, Medicaid guaranteed the right to health insurance and medical services for the poor and for children and disabled people, and provided funding for nursing care for the elderly based on need. Medicaid emerged as part of the “Great Society” and “War on Poverty” under the Johnson administration, alongside landmark legislation such as the Civil Rights Act and the Food Stamp Act, both in 1964, and the Voting Rights Act of 1965.
The assault on health care exemplified by the Republicans’ reactionary legislation is of a piece with the ruling elite’s attack on all the social rights of the working class—the right to a job, education, decent housing, a secure retirement, access to the arts and culture, and a healthy and safe environment.
Congressional Democrats have chosen to oppose the Trump administration not over the destruction of social conditions, but over Trump’s alleged “softness” toward Russia. They are working in alliance with the dominant factions of the intelligence apparatus to whip up a war fever against Russia in an attempt to condition the public for an escalation of the wars in the Middle East as well as a military confrontation with Iran and nuclear-armed Russia. Incapable of opposing the most reactionary presidency in US history on anything resembling a progressive or democratic basis, they have positioned themselves to the right of Trump on issues of imperialist foreign policy.
Whatever form it takes, the health care legislation that the Republicans are able to pass through Congress and place on the president’s desk to sign will be one of the most reactionary pieces of legislation in modern history. The ruling elite sees the attack on Medicaid as the first shot in their war on Medicare and Social Security and wants to see all of these social programs privatized or ended outright. In the final analysis, both big-business parties agree that health care must be limited to what is compatible with the profit interests of corporate America.
The working class must fight for its own class interests. The crisis in health care requires a socialist solution, which takes as its point of departure the needs of working people and society as a whole, not the wealth and profits of a tiny minority.
The establishment of a system of universal, free health care for all requires placing the entire health care system—the private insurers, pharmaceuticals, giant health care chains—under public ownership, managed democratically to serve human needs, not profit. Such a fight requires the mobilization of the working class as a revolutionary force, independent of and opposed to both the Democratic and Republican parties.
TIME TO CLOSE OUR BORDERS TO NARCOMEX?