By Tory Newmyer
March 14, 2017

The bad news for the GOP’s Obamacare replacement proposal is that it reserves its good news mostly for upper-income earners and insurance executives. The rest would land body blows on people who helped form the core of President Trump’s base. That, in so many words, is the conclusion of the nonpartisan Congressional Budget Office, which released its official assessment of the bill’s likely impact Monday. It found the House Republican plan would cut healthcare coverage for 24 million Americans by 2026, with 14 million dropping off insurance rolls next year alone. The package would shave 10% off of premium increases (after a spike in the first two years) and reduce the deficit by $337 billion over the next decade. But it does so in the context of a wealth transfer from the working and middle classes to the rich that also shifts the burden from younger, healthier consumers to older, sicker ones. It would squeeze $880 billion from Medicaid, the federal health program for lower-income people, and reduce tax credits for middle-income earners to buy insurance; and it would hand roughly that same amount right back out the door by cutting $883 billion in taxes that Obamacare imposed to help pay for its coverage expansion. The CBO doesn’t break down who benefits from the tax cut, but other analyses show it would flow heavily to top earners, with $144 billion going to those with incomes over $1 million. Typical, low-income seniors, meanwhile, would see premiums sky-rocket: A 64-year-old earning $26,500 a year, for example, would pay $14,600 for coverage under the new plan, up from $1,700 now, per the CBO.

It doesn’t take an advanced degree to decode how this will play politically. Front-page headlines this morning from the states in the blue-collar belt that delivered Trump’s victory tell the story: The Oakland Press, in Michigan: “Analysts: 24M would lose coverage under bill;” The Milwaukee Journal Sentinel, in Wisconsin: “Millions more would not be insured with GOP’s health plan;” and The Lebanon Daily News, in Pennsylvania: “CBO analysis: ‘Obamacare’ replacement to leave 24M uninsured.” The CBO report dropped like a bomb on Capitol Hill yesterday afternoon, sending House Republican leaders scrambling to hold the pieces of the package together. Initial reviews from their own rank-and-file have been harsh. And several Senate Republicans likewise are demanding major changes.

Whither Trump’s team? Outside the White House yesterday evening, Health and Human Services Secretary Tom Price said the administration disagrees “strenuously” with CBO’s take, though that office is led by an economist Price handpicked for the job. Trump has so far embraced the bill. But the CBO report challenges his guarantee that the Obamacare replacement would ensure “better health care for more people at a lesser cost” while providing “insurance for everybody.” Given the Congressional GOP’s divisions, a White House intervention seems increasingly urgent. It’s less clear what, if anything, can gather enough support from Republicans to make it to Trump’s desk.

Tory Newmyer


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