Experts say the Senate health care bill is even worse for poor people than the House bill

Experts say the Senate health care bill is even worse for poor people than the House bill
Senate Majority leader Mitch McConnell J. Scott Applewhite/AP
Senate Majority leader Mitch McConnell J. Scott Applewhite/AP

Last week, President Donald Trump tore into the House's health care bill, reportedly telling GOP Senators that the legislation was too "mean" and encouraged the upper chamber to be "more generous" with its version.

But Trump, who previously insisted he was "100% behind" the bill, doesn't seem to have gotten that message across: On Thursday, Senate Republicans finally released their long-awaited health care bill — and the news was not good for low-income and poor Americans.

Ahead of Thursday's release, most political observers expected that the Senate version of the bill would moderate some of the harsher provisions in the House bill. Instead, the bill makes even deeper cuts to Medicaid.

Before the Affordable Care Act passed, Medicaid offered health care to anyone below the poverty line, and it was paid for by a combination of state and federal funding. The ACA expanded the number of people eligible for Medicaid to anyone making below 138% of the federal poverty line in states that elected to accept the expansion. It also provided additional funds to cover the costs of those new enrollees.

Senate Minority Leader Chuck Schumer (D-N.Y) writes "Mean-er" on a reported quote by President Donald Trump in response to the release of the Republicans' healthcare bill.
Senate Minority Leader Chuck Schumer (D-N.Y) writes "Mean-er" on a reported quote by President Donald Trump in response to the release of the Republicans' healthcare bill. Andrew Harnik/AP

Both the House and Senate bills significantly roll back the ACA's Medicaid expansion by the beginning of 2021 and also reduce the total amount of Medicaid funding that states get for their entire Medicaid population.

But what is most surprising about the Senate version of the bill is that it cuts the overall amount of Medicaid funding even deeper than the House bill does, which is likely to result in even more people losing coverage over the long run.

Senate Republicans achieved this by using a more conservative formula to determine the cap in federal Medicaid spending year to year.

"[The House bill] was still going to result in significant cuts to state Medicaid programs. But what has changed in this bill is they are now growing that cap at a much, much lower rate," Matt Fiedler a fellow at the non-partisan Center for Health Policy and Economic Studies at the Brookings Institution, said. “On the Medicaid side, there is no doubt that the cuts are far deeper, particularly over the long run.”

The "long run" nature of those cuts is key. Robert Greenstein, president of the left-leaning Center on Budget and Policy Priorities said that the number of people who will lose coverage as a result of the Senate’s deep Medicaid cuts likely won’t be reflected in the forthcoming CBO score because the bulk of the damage will happen outside the CBO’s ten year window of analysis.

"To be sure, we expect CBO’s coverage loss number to be less than 23 million but still quite high" Greenstein said in a call with reporters, referring to the number of people who would lose insurance under the House bill. "But let me caution you: That 23 million number is the number in the tenth year. Over time the Senate bill would do even more damage than the draconian House bill."

Prior to Thursday, several Republican senators, including Sen. Rob Portman (R-Ohio), Sen. Shelley Moore Capito (R-W.V.), Cory Gardner (R-Co.), and Lisa Murkowski (R-Alaska) had signaled their concern that the House bill went too far in cuts to Medicaid.

So why did the Senate bill end up cutting Medicaid even deeper than the House? Fiedler says the most likely answer is tax cuts.

Capitol Police arrest a protestor against the Senate Republican's draft healthcare bill outside the office of Senate Majority Leader Mitch McConnell's office.
Capitol Police arrest a protestor against the Senate Republican's draft healthcare bill outside the office of Senate Majority Leader Mitch McConnell's office. Saul Loeb/Getty Images

"Conservatives, ultimately correctly, see a linkage between how much the federal government spends on health insurance and how much the federal government has to raise in revenue over the long run," Fiedler said. "I think the big payoff in the Medicaid cuts is that there's room to cut a variety of taxes."

Both the House and Senate versions of the bill include a substantial tax cut for wealthier Americans and the health care industry. What's more, the Senate bill also includes some retroactive cuts for taxes that have already been paid. Republicans have also expressed considerable interest in pursuing comprehensive tax reform as soon as they pass a health care bill. Deeper cuts to Medicaid would allow them to pursue even more aggressive tax cuts using the revenue saved over the long run.

And if the health care bill is any indication, it will likely be wealthier Americans who will see the lion's share of benefits from those cuts.