Senate Healthcare Bill – Big Flim-Flam

Details of the Senate “Better Care Healthcare bill” have been released and its a disaster.  Like the House bill, the number one feature, and the only one that is thoroughly detailed is a tax cut for high-income earners.  The rest is flim-flam.  Senators are going to have a hard time explaining how it benefits the 98% of us that don’t earn half a million a year.

The greatest loss for consumers is on the changes to Medicaid.  I guess they figure that most people don’t understand Medicaid, so they put some extra money in for a few years to make it look good, but set up a mechanism for big cuts in the future.

The Medicare Logo
The Medicare Logo

Medicaid is the program that subsidizes some health services.  In Obamacare, it lowers the premium for many lower and middle-income policyholders.  Medicaid also pays for prenatal care and children’s insurance, help for diabetics, and nursing home care for those that can’t afford it.

Medicaid traditionally split the costs with the States 50/50.  Obamacare upped that to 90% for the 32 states that signed on to the Obamacare exchanges, but no change for the states that didn’t sign on. The Senate bill will continue the 90% share for a few more years, including the states that didn’t receive it before.  That’s the flim-flam part.  The extra support is rolled back in 2021, returning to pre-Obamacare levels within a few years after that.  So Congress can say that they’re offering benefits, but they won’t be there for long.

But the cuts go even further with block grants.  Block grants are another way to phase in benefit cuts and hiding from responsibility. These grants will give each state a fixed amount each year instead of the traditional percentage matches. The concept is promoted as “giving the States more flexibility,” but it’s easy to see how some States would try to reroute limited funds.  And the grants are most likely to cover less and less over time as the bill pegged increases to a stingy cost of living formula.  Medical inflation has been much higher than general inflation for 20+ years now with no signs of change.

The bill contains another fatal flaw in the way that it covers pre-existing conditions.  It sounds good just to say that “we’ll require the insurance companies to cover them,” but without the individual mandate providing a core of healthy people to balance costs, the premiums will skyrocket.  We see now how that’s worked under Obamacare.  Congress took away the risk corridor protections for insurance companies, and they’re all bailing out of the program.

A magicians hat and symbol of flim-flam
There’s no magic way to pay for quality healthcare.

There’s more flim-flam in the coverage levels.  Lower subsidies and the availability of skimpier policies are expected to reduce the coverage levels of all but the most expensive plans.  At the same time as the surcharge on the most deluxe “Cadillac” plans will be removed, the coverage of most other personal plans is expected to decrease.  I suppose that insurance that covers 50% of a person’s medical bills is better than nothing … get cancer, and you can file 50% bankruptcy!

We have a big problem here.  Healthcare is a basic need, but the price is running away from us.  It’s not going to get better by ignoring it, blaming insurance companies, or passing the costs on to the States.  Let’s not go backward.  Congress, please put politics aside and come up with an honest solution.