The fatal flaw in the new Obamacare-repeal bill

Rick Newman
Columnist

Senators have just a few days to vote on the Cassidy-Graham bill, the third and final Republican effort this year to dismantle the 2010 Affordable Care Act. They have to vote by Sept. 30, because after that Senate rules will require 60 votes to pass the bill, instead of the 51 required now — and the Republicans running Congress will never get 60.

The bill is endangered, since three Republican senators — Rand Paul of Kentucky, Susan Collins of Maine and John McCain of Arizona — have said they won’t vote for it, leaving just 50 possible yeas. But a vote is still likely and horse-trading could bring one of the three recalcitrant Republicans on board. President Donald Trump is pushing hard for the bill and will undoubtedly pound the Senate until a vote — and probably after a vote, too.

It’s politically risky to repeal Obamacare, as the ACA is known, since a majority of Americans now favor the law. But the Cassidy-Graham bill is practically booby-trapped to fail. It wasn’t introduced until Sept. 13, which won’t leave the Congressional Budget Office enough time to do its customary analysis on the ramifications of the bill. But third-party researchers have been running the numbers, and they’re going from bad to worse.

Sen. Bill Cassidy, R-La., center, joined by, from left, Sen. Lindsey Graham, R-S.C., Sen. Roy Blunt, R-Mo., Sen. John Barrasso, R-Wyo., Sen. John Thune, R-S.D., and Senate Majority Leader Mitch McConnell, R-Ky., speaks to reporters as he pushes a last-ditch effort to repeal Obamacare. (AP Photo/J. Scott Applewhite)

The latest analysis, from the nonpartisan Brookings Institution, finds that Cassidy-Graham would reduce the number of Americans with insurance by about 21 million through 2026. But after that, another 11 million would lose coverage, for a total of 32 million additional uninsured.

Why? Because the bill includes some funding for people no longer covered under the Affordable Care Act through 2026, but no funding at all after that. Meanwhile, it would impose new limits on the maximum amount states can spend on Medicaid, the health program from the poor. That would cut enrollment in Medicaid over the long run, despite population growth.

More Americans will be uninsured

For perspective, Obamacare, as the ACA is known, has extended coverage to about 20 million Americans who didn’t have insurance before the law went into effect in 2014. So repealing it and putting in place the new rules under Cassidy-Graham would actually leave more people uninsured after 2026 than there were before anybody ever heard of Obamacare. It wouldn’t just undo the ACA, it would also reduce safety-net precautions put in place well before the ACA came along.

Cassidy-Graham assumes that Congress would come up with a new plan to deal with those 11 million Americans hanging in the balance between now and 2026. Does this strike anybody as a good idea? The last time Congress had to deal with sunset laws on this scale was in 2012, when a huge set of temporary tax cuts enacted a decade earlier was due to expire. Fed Chairman Ben Bernanke warned that the economy was in danger of careening over a “fiscal cliff,” which required down-to-the-wire negotiations in Washington, while markets gyrated. Congress averted disaster, but also demonstrated its growing capacity for doing the wrong thing right up till the last second, when there’s no other choice.

Cassidy-Graham would set another fiscal time bomb, with the added bonus of doing actual harm to real people by in effect canceling their health insurance. It would also generate far more uncertainty in the health care industry than we have even now, a curious maneuver for a Republican party that is supposedly pro-business. Nobody in Washington seems to care, but every policy battle and threat of disruption imposes costs on insurers and providers that they pass on to consumers. There are other reasons health care costs are soaring, but the continual threat of plug-pulling in Washington is one of them.

Overall health care funding will decline

The Brookings analysis darkens an already gloomy picture of the health care landscape were Cassidy-Graham to pass. An analysis by Avalere Health found that the bill would cut overall funding for health care by $215 billion through 2026, which is why so many people would lose coverage. After that, federal health care funding would plunge because of the absence of spending provisions. Another study, by AARP, found the law could raise the cost of health insurance for a low-income 60-year-old by more than $16,000 per year. The plan would also give states the option to “waive” rules that prevent insurers from denying coverage to people with pre-existing conditions. A provision preventing insurers from doing that is one of the more popular elements of the ACA.

The two prior GOP efforts to repeal Obamacare this year failed by thin margins, as a handful of Republicans voted against them. So perhaps this one will, too, given that its effects on ordinary people would be even harsher than prior bill, and harder to defend when election time comes around in 2018 and 2020. Maybe the time bomb in the Cassidy-Graham bill is really meant to blow up before it passes.

Confidential tip line: rickjnewman@yahoo.com. Encrypted communication available.

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Rick Newman is the author of four books, including Rebounders: How Winners Pivot from Setback to Success. Follow him on Twitter: @rickjnewman

 

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