Senate GOP healthcare plan is the next man-made disaster

By any objective analysis, the Better Care Reconciliation Act (BCRA) is an abhorrent piece of legislation. Americans want health care to be cheaper and better. Indeed, many studies show that American medicine costs far too much for what it delivers. Rather than addressing these problems, however, the BCRA makes them worse. It covers fewer people and makes care worse for those who are insured.

At the heart of the BCRA is the goal of taking money away from low- and middle-income people. The BCRA reduces Medicaid spending and insurance subsidies by over $1 trillion in the next decade. With less money for insurance subsidies, fewer people will be covered.

The Congressional Budget Office predicts the decline will be 22 million. Republicans howl at estimates, but no one has yet explained how to take $1 trillion away from low- and middle-income people without having their health coverage suffer.

{mosads}The irony of taking insurance away from struggling workers is that rising economic anxiety was a major reason why many voters pulled the lever for Trump in 2016 and for the Republican Congress in several recent elections. Now that they are in control of the presidency and Congress, the first major act of the Republican Party is to slap those that backed them.

Even those with insurance will be harmed. The BCRA bases tax credits on a plan with greatly-increased cost-sharing. The CBO estimates that deductibles will increase by over $2,000 for people buying through the exchanges. Further, states would be allowed to opt out of regulations that allow less-healthy people to buy insurance at reasonable rates, driving up rates even more for the less healthy.

We know what happens when out-of-pocket costs rise: people use less care. This fact by itself is not controversial. Indeed, many Republicans have long argued that people should pay more for the medical care they receive. The problem is that when cost-sharing increases, people cut back on valuable services as well as less-valuable ones. Significantly fewer people with chronic disease use medical care when out-of-pocket costs are lower, even when such care is highly recommended.

The inevitable consequence of less coverage and higher cost-sharing is increased incidence of untreated disease, more physical and behavioral health problems and increased mortality. The past two decades have seen an unprecedented rise in death rates for traditional “middle America”: non-Hispanic whites, especially those without a college degree.

The BCRA will further this trend. Recent estimates suggest the coverage changes in the BCRA will lead to about 26,000 more deaths annually. This is nearly equal to annual deaths from opioid-related drugs in the United States. It is the equivalent of five times the number of American casualties in the Iraq War, or to a completely full 747 airplane crashing every nine days.

To be sure, there are some winners under the BCRA. Healthy, rich people will be better off — at least while they remain healthy and rich. The ACA asks the healthy to pay more so that the sick can pay less. The BCRA reverses this. Alas, we all get sick at some point. The healthy rich win temporarily, but it averages out over time.

The real winners under the BCRA are the very wealthy — those paying the income surcharge on investment income and other taxes and fees that are used to fund the ACA’s subsidies. Estimates are that the richest 0.1 percent of tax filers would receive tax cuts averaging over $200,000 per return. No Republicans have yet explained why this policy is essential in a bill to improve the health system.

The enormity of the BCRA’s failure explains why the vast bulk of economists, public health officials, and medical care organizations oppose the BCRA. No credible analysis has been conducted that shows any health benefits to the BCRA.

Of course, highlighting the mendacity of the BCRA does not mean that the ACA is perfect. There are many areas in which the ACA needs improvement, from encouraging insurers to stay in rural areas, to continuing the quest to lower overall medical costs. Unfortunately, the debate about the BCRA is sucking all the attention that could instead be devoted to improving health care.

In the end, the GOP argument for passing the BCRA is remarkably devoid of content: “The health bill needs to pass because we said we would pass a health bill.” It is true that voters punish parties that fail to deliver on their promises. But it is also true that voters punish those in power when made bad things happen to them.

David M. Cutler is the Otto Eckstein professor of applied economics at Harvard University. Cutler served on the Council of Economic Advisers and the National Economic Council during the Clinton administration and has advised the presidential campaigns of Bill Bradley, John Kerry and Barack Obama, as well as being senior health care advisor for the Obama presidential campaign.

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