The “Skinny” Repeal of the ACA Is Back

Republicans in the Senate want to cut taxes so much for rich people and corporations that the federal deficit would go way up. That means they need to reduce government spending or find new revenue to offset the cuts. Their latest idea is to bring back the “skinny” repeal of the Affordable Care Act. The repeal would be “skinny”, because the only thing being repealed would be the “individual mandate”, the requirement that people have health insurance or pay a fine.

But why would getting rid of the individual mandate help offset tax cuts? The reason is that millions of low-income people would no longer buy health insurance, so the government would no longer need to give money to help them afford it. Right now, the government spends millions of dollars on health insurance subsidies for people who couldn’t otherwise get it. If those people don’t have health insurance anymore, the subsidies won’t be paid.

Unfortunately, there are serious problems with this approach. From The Washington Post:

Repealing the mandate would undermine … key parts of the Affordable Care Act. The health care law banned insurance companies from discriminating against people with pre-existing health conditions. But in order to prevent people from waiting to buy insurance until they got sick, the law … imposed financial penalties [the individual mandate] for individuals who did not maintain health insurance coverage.

Health experts say eliminating the mandate would destabilize the individual insurances markets set up by the Affordable Care Act, as they would be full of people with high health care costs but have far fewer of the healthy people that insurance companies bank on. In response, insurance companies would likely either massively raise premiums or pull out of the marketplaces entirely.

A powerful group of stakeholders, including the major health insurance and hospital insurance lobbies and two influential doctors’ groups, wrote a letter to leaders from both parties arguing that they should retain the individual mandate.

“There will be serious consequences if Congress simply repeals the mandate while leaving the insurance reforms in place: millions more will be uninsured or face higher premiums, challenging their ability to access the care they need,” the groups wrote.

The Congressional Budget Office (CBO), among others, analyzed “skinny” repeal earlier this year. Their conclusions led three Republican senators to vote against it on the night of July 27th (it was in all the papers). Maybe the same three will defeat it again if it’s part of the Republican tax bill, but there might be more pressure on them to accept it this time.

Meanwhile, Republicans in the House of Representatives have their own version of the tax legislation. Today, the CBO had something to say on that. From Yahoo Finance:

If the House GOP tax plan passes, it is projected to cut revenue significantly, likely increasing the deficit by $1.456 trillion from 2018 to 2027, according to the Joint Committee on Taxation and Congressional Budget Office.

… the CBO explained that without any more money to offset the fall in revenue, the Office of Management and Budget (OMB) would be required to issue a “sequestration order” to reduce spending in 2018 by $136 billion.

The effects of this sequestration order would trigger automatic cuts to various programs, including Medicare. According to the CBO, this could be as much as 4% for Medicare, which amounts to $25 billion in 2018. Furthermore, all non-exempt programs would be eliminated, which include some farming subsidies, border security, and student loan help.

So, in order to give the wealthy and corporations an enormous tax cut, Republicans will either raise insurance premiums for millions of average Americans or apply major spending cuts to programs like Medicare (or do both). This is in addition to increasing taxes on millions of people who itemize their deductions because they have big medical bills or live in states or cities with high taxes. All of this will happen while they increase the deficit by $1,456,000,000,000, give or take several billion. 

On the plus side, the president, his family, the billionaires in the Cabinet and lots of other plutocrats, including many CEO’s, will have a lot more money in their very deep pockets, a few dollars of which will trickle down to the rest of us. Inequality will increase, people will die too soon, but that’s all right, because I’ve got mine, Jack!