Don’t Rob Medicaid & the ACA to Pay for Tax Cuts

Don’t Rob Medicaid & the ACA to Pay for Tax Cuts

Senate Republicans decided this week to wade back into the health care debate by including a repeal of the Affordable Care Act’s individual mandate in their tax cut bill. As noted in a previous blog, this bill, as well as the House bill, creates a massive give-away to the already wealthy and corporations.

The Senate bill would reduce the penalty for not having insurance to $0, effectively repealing the mandate. The result would be more than 13 million people losing their health insurance over the next 10 years. This includes 5 million individuals losing Medicaid. Therefore, the Senate affirmatively chose to pay for its ridiculous tax cuts by taking health coverage away from many of the lowest income individuals.

Cutting 5 million off Medicaid, plus another 5 million from marketplaces, and another 3 million from employer and other coverage, saves the Senate nearly $340 billion. How? Millions would not enroll in Medicaid, saving the federal government $179 billion. This also hits states’ budgets since the federal government pays, on average, 62 percent of Medicaid costs. Medicaid funding helps support hospitals, health centers, and many other aspects of the health system. Less money coming in through Medicaid and more uninsured individuals puts more pressure on the health system when these individuals need health care for which they may be unable to pay.

As if that is not bad enough, the impact goes beyond Medicaid. Millions more would not enroll in marketplace coverage, saving the federal government money by not paying their tax credits to reduce premiums. Further, according to the Congressional Budget Office, all individuals buying marketplace coverage would pay about 10 percent more in premiums as healthier individuals leave the risk pool. As noted by the Center on Budget and Policy Priorities, that amounts to a premium increase of hundreds of dollars per year for about 7 million mostly middle-income consumers, and more than $1,000 per year for many older people.

In addition, with rising premiums and millions of individuals dropping out, the individual market would face further instability. Given this administration’s ongoing sabotage of the marketplaces (stopping cost sharing reductions, eliminating 90% of outreach spending, slashing navigator funding by 40%, etc.), this repeal may be the tipping point for even more insurers to opt out of the market altogether. Not to mention that it gives the Republicans a victory in their never-ending quest to completely repeal the ACA.

These tax cut bills are so misguided that 400 millionaires and billionaires sent a letter actually asking Congress not to cut their taxes. Additionally, a group representing the major insurers, physicians and hospitals across the country, including America’s Health Insurance Plans, American Academy of Family Physicians, American Hospital Association, American Medical Association, Blue Cross Blue Shield Association, and Federation of American Hospitals, came out opposing the repeal of the individual mandate.

We cannot let these bills become law. Call your representatives and senators to tell them you oppose repealing the individual mandate and to oppose any tax bill that benefits the wealthy and corporations at the expense of low-income (and middle-income) individuals. We have stopped them from repealing the ACA and decimating Medicaid before; let’s step up our efforts together to notch another win.

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