If you watched any television in 2010, you might recall that the Affordable Care Act cut $500 billion from Medicare over a decade.
You probably learned that because House Republicans’ campaign committee blanketed the country with ads attacking Democrats for cutting $500 billion from Medicare.
“Let’s save Medicare,” the National Republican Congressional Committee said in one typical ad urging the election of a Republican majority.
Seven years later, Republicans are fully in charge in Washington, and a “repeal” plan being considered by the House of Representatives this week would undo large parts of Obamacare.
But it would leave the Medicare cuts in place. Womp womp.
Republicans can’t help break lots of promises
People oppose Obamacare for a variety of reasons, and Republicans capitalized on all those reasons in their campaign against the law. In doing so, they made more promises than they could deliver on.
Republicans would say in one breath that Obamacare cost the government too much money and that premiums were too high, in part because its regulations required insurance to pay for too much. In another breath, they would say that deductibles and copayments under Obamacare insurance plans were too high – even though reducing those deductibles and copayments would require premiums to go up.
Obamacare was financed by raising taxes and cutting Medicare. So Republicans decried the tax increases, and they decried the Medicare cuts even more loudly.
But because Republicans (mostly) acknowledge the need to maintain some sort of health-insurance subsidy as a replacement for Obamacare, which will cost money, they won’t be able to undo all the tax increases and all the Medicare cuts without exploding the deficit. Yet Republicans are also opposed to deficits.
Now that Republicans run the government, we are seeing which set of concerns they choose to prioritize, given limited available resources.
The unsurprising answer is that Republicans will make a priority of repealing substantially all the tax increases in Obamacare, most of which fall on people who make over $200,000 a year. If House Speaker Paul Ryan gets his way, people who hated Obamacare because of the taxes it imposed will get nearly everything they wanted.
But much of the rest of the law would stay in place. And people who hated the law for non-tax reasons – they thought insurance premiums were too high, they didn’t like being penalized for not having insurance, they didn’t like cuts to Medicare – mostly wouldn’t get what they were expecting.
Cuts for Medicare participants are here to stay
The House Republicans’ plan would retain Obamacare’s cuts to Medicare, including reductions to rates providers are paid for caring for Medicare patients and the elimination of bonus benefits once enjoyed by participants in private Medicare Advantage plans.
You might assume that’s because the plan is not a full Obamacare repeal – as Sen. Rand Paul complains, it’s “Obamacare lite.”
Yet the “full” repeal plan touted by conservatives, which passed Congress in 2015 and was vetoed by President Obama, and which Paul said he would reintroduce in this Congress, also kept in place the cuts to Medicare benefits.
Lots of other Obamacare complaints are also unaddressed by the House plan
A lot of people don’t like the individual mandate in Obamacare. The House plan would repeal the existing mandate but replace it with another one payable directly to insurance companies – a 30% penalty premium if you let your health insurance lapse.
Other people were upset about Obamacare because their healthcare costs went up – perhaps for reasons related to Obamacare, perhaps for other reasons. Yet this plan has no apparent architecture for cost control. Republicans’ major cost-control idea, a cap on the tax benefit for health insurance, might have helped discourage spending growth in the long run but was scrapped in negotiations over the plan.
Of course, what consumers really care about is healthcare costs borne by them, not global costs. The Republicans’ plan offers more generous healthcare subsidies to some consumers. But it also cuts the subsidies enjoyed by many, especially people who live in rural areas with high healthcare costs, and people between 50 and 64 – both disproportionately Republican groups.
The few people who like this plan care mostly about tax cuts
Because the House plan addresses so few of the objections to Obamacare, and because it would at the same time cut benefits created by Obamacare that many people rely on, the rollout of the plan has gone poorly.
Moderate Republican senators are wary of big cuts to Medicaid, while conservative groups like Heritage Action for America and FreedomWorks say the plan leaves too much of Obamacare’s benefits infrastructure in place. Defectors from the far right and from the center threaten passage of the plan.
But a few players have praised the plan: The Wall Street Journal editorial board, the Chamber of Commerce, and the antitax advocate Grover Norquist, to name a few.
What these people praising it have in common is that they are mostly interested in healthcare policy because healthcare spending is paid for with taxes, and the plan would cut taxes, including by reducing capital-gains taxes on high earners by 3.8 percentage points.
The biggest new tax under Obamacare is on people making over $200,000, but there are also taxes on health-insurance premiums, medical devices, branded pharmaceuticals, tanning services, and more. If you operate a tanning salon, this plan has what you wanted out of Obamacare’s “repeal.”
It matters which half of the loaf you get
You will see Republican leaders argue that various factors constrain what Republicans can deliver on healthcare – for example, the popularity of the requirement that insurers cover people with preexisting conditions, and the limitations on what can pass the Senate with a simple majority.
Take this plan, they will say, because it’s better than the status quo and we can do more later.
But the question is, better for whom?
This Obamacare-repeal plan leaves out much of the wish list of the anti-Obamacare coalition. It lacks most of the deregulatory provisions that were supposed to make insurance cheaper and offset the reductions in subsidies offered to many Americans. It would likely result in millions of Americans losing health insurance. It offers no restoration of Medicare benefits to the seniors who were activated to vote Republican over Medicare cuts in the 2010 election.
Yet curiously, some groups did not have to compromise: wealthy people, medical-device manufacturers, pharmaceutical companies, tanning salons.
Funny how that works, even in President Trump’s newly populist Republican Party.
Update: An earlier version of this article said the House Republicans’ replacement plan would keep only about 95% of Medicare cuts from the Affordable Care Act and would undo some cuts to Medicare payments made to hospitals to compensate them for providing care to uninsured people. This is incorrect; the replacement plan would undo cuts to such hospital payments under Medicaid, not the payments under Medicare.