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For House GOP Health Bill, Deficit Reduction and Coverage Loss for Millions Go Together

March 15, 2017 at 3:30 PM

The White House and Republican congressional leaders seem conflicted about whether to praise or criticize the Congressional Budget Office’s (CBO) analysis of the House bill to repeal the Affordable Care Act (ACA). Bill proponents like House Speaker Paul Ryan and White House Press Secretary Sean Spicer are touting CBO’s finding that it would reduce the deficit by $337 billion over ten years, but they’re challenging the finding that it would increase the number of uninsured by 24 million by 2026. The proponents, however, can’t have it both ways: the very policies that reduce the deficit also reduce coverage.

The House bill would reduce the deficit by cutting Medicaid by $880 billion and providing $312 billion less in subsidies over the next ten years. But those same cuts inevitably would cause tens of millions of people to lose coverage.

In fact, the deficit reduction in the bill required such deep health care cuts because Republicans have insisted on also eliminating nearly all of the ACA’s revenue provisions — thereby giving large tax cuts to wealthy households and drug and insurance companies. That means, from the start, reducing the deficit required finding $600 billion in savings to offset the cost of these tax breaks. Those tax cuts include repealing two Medicare taxes that only affect high-income households — providing an average tax cut of nearly $50,000 to millionaires, while accelerating insolvency of Medicare’s Hospital Insurance trust fund by three years. (Another $200 billion goes to offset the elimination of penalties for employers who don’t offer health insurance or individuals who don’t buy it.)

The final result is exactly what CBO shows: some deficit reduction alongside large tax cuts for the wealthy, financed by deep cuts to health coverage for low- and moderate-income families, especially Medicaid beneficiaries. (See chart.)