Republican leaders get twitchy when critics say the Senate’s Obamacare repeal bill would give benefits to the rich, while taking from the poor and middle class.
But that’s exactly what the legislation would do, according to a new report. And the numbers are more lopsided than you might imagine.
The report comes from the Urban Institute’s Health Policy Center and the Urban-Brookings Tax Policy Center, two well-respected and nonpartisan think tanks in Washington. To get a better sense of whom the Senate bill would help ― and whom it would hurt ― researchers decided to zero in on how the Senate bill would change “net government transfers.”
That’s a fancy way of saying the researchers looked at the combined effect of the bill’s big spending and revenue changes ― like cutting Medicaid, reducing the value of tax credits for people who buy coverage on their own, and repealing taxes the Affordable Care Act put in place.
The results were stark.
Individuals and families making less than $75,000 a year would end up losing money, on average, because they are the ones who today get coverage from Medicaid or rely heavily on tax credits.
Not surprisingly, it’s the lowest income groups that would take the hardest hits.
Among the individuals and families with incomes of $10,000 to $20,000 a year, the average loss would equal roughly 13 percent of annual income. Among the poorest of the poor, the ones making even less than $10,000 a year, the average loss would be equal to a whopping 61.7 of annual income.
Altogether, the “losers” ― the ones whose average incomes would fall in the new analysis ― represent something close to two-thirds of the population. (It’s difficult to be more precise because of the particular population unit the Tax Policy Center uses for its calculations.)
For the rest of the population, the bill’s tax and spending changes would mean more money in their pockets, on average, although the relative change would be smaller than for poorer groups ― and, really, the only ones to see significant changes at all would be those making more than $200,000 a year.
The new report is one of the most thorough examinations yet of how the Senate bill would affect different parts of the population. Even so, it comes with an important caveat. It does not take into account changes to insurance regulations, which would also have significant effects on individuals.
Because insurers would have more flexibility to vary premiums by age, for example, young people could buy the same policies as they could find today for less money ― but older consumers would have to pay more. Looser requirements on benefits could give healthy people access to cheaper coverage, while leaving those with serious medical needs on the hook for larger, even crippling out-of-pocket expenses.
“I think that it is fair to say that much larger percentages of the population would eventually experience losses.”
But experts have said previously that, even allowing for these additional changes, the number of people worse off financially from the Senate bill would probably outnumber those better off ― and by quite a large margin. Linda Blumberg, Urban Institute senior fellow and co-author on the new report, told HuffPost she has the same view.
“I think that it is fair to say that much larger percentages of the population would eventually experience losses ― of money or access to care ― once faced with a health problem that either requires much higher out-of-pocket payments due to higher cost-sharing plans or where there benefit is actually excluded from coverage under a waiver and so the care is paid for completely out of pocket or not received at all,” Blumberg said.
The basis for Tuesday’s analysis was the Better Care Reconciliation Act, which Senate GOP leaders released last month but have since said they would amend, to mollify members of their caucus unwilling to vote for the legislation in its current form. One possibility is they might keep some of the Affordable Care Act’s tax changes, or at least postpone their repeal.
Such a move would reduce the bill’s benefits for the rich. But whether it would help the poor and middle class would depend entirely on how Senate leaders redistribute the money.