The American Health Care Act, which House Republicans unveiled Monday night with White House support, is repeal and replace, kind of. It has some suspicious similarities to Obamacare. But it marks a sharp departure in at least one crucial respect: fiscal responsibility.
The bill would repeal a vast array of the Affordable Care Act's pay-fors — taxes on upper-income people and on health-care-related entities including drugs, insurance and medical devices. To finance the spending it still envisions, the bill would replace those by cutting Medicaid and other assistance to poor and near-poor people. This is not only heartless, it is reckless. Within a few years, governors will be pressing Congress to protect Medicaid. At that point, it is a decent bet lawmakers will simply choose their default option when faced with a politically tough situation: Make poor people suffer, and add to the debt.
Republicans may insist that they will hold the line, but their recent behavior offers little assurance. In an earlier draft of their Obamacare replacement bill, House leaders envisioned limiting the preferential tax treatment of employer-sponsored health benefits. This rational reform would have helped curb unsustainable increases in health-care costs, but it is not popular with anyone other than economists. So Republicans ditched it. Their bill also would delay Obamacare's principal cost-containment mechanism, the equally unpopular "Cadillac tax." This would represent the second time that tax will have been delayed, creating the precedent lawmakers will need to push it off in perpetuity.
Adding to this irresponsible picture, Republicans are marking up their bill without a full analysis from the Congressional Budget Office of its budgetary impact or — crucially — of how many people the proposal would (or would not) cover.
On the latter question, there is ample reason for concern. The bill would substantially reduce the amount of assistance that low-income people get to buy coverage on the individual insurance market, it would ramp up how much more insurers can charge older people relative to younger people, and it would remove Obamacare's crucial link between actual insurance costs and the federal assistance people get. Combined, these changes would push many needy people out of the individual insurance market. Republicans claim that Americans would have more flexibility in the sorts of insurance plans on offer, including cheaper "catastrophic-only" health-care policies, but that sort of coverage, with its high deductibles and limited benefits, is hardly useful to people barely scraping by now under Obamacare's much more generous system.
Passing the GOP's latest health-care reform proposal would enable a few members of Congress to boast that they rewrote Obamacare. It also would allow House Republican leaders to flex their legislative muscles in the face of their intransigent right wing. But a lot of poor people would pay a substantial price to give them that satisfaction. Chances are, so would the federal deficit.