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Memo From Andy Slavitt: 3 Reasons Sen. Susan Collins Should Demand Health Repeal be Removed from the GOP Tax Bill

By December 5, 2017December 7th, 2017No Comments

To: Interested Parties

From: Andy Slavitt, Former Acting Administrator for the Centers for Medicare and Medicaid Services

Date: December 5, 2017

Subject: 3 Reasons Sen. Susan Collins Should Demand Health Repeal be Removed from the GOP Tax Bill

Last week, Sen. Susan Collins (R-ME) joined 50 of her Republican colleagues to pass a sneaky health care repeal bill under the guise of tax cuts to the wealthy and corporations. This legislation, if enacted into law, will result in13 million people losing their health coverage, raising premiums by ten percent, forcing higher costs on older Americans to pay more for their care, and jeopardizing Medicare. Here are three reasons why Sen. Collins should reconsider her vote as Congress considers a final bill.

First, This Tax Bill Hurts Mainers’ Health Care, Especially Older Mainers.The Senate tax bill repeals the provision in the Affordable Care Act (ACA) that requires most individuals to have health coverage, the consequences of which would increase the number of uninsured, raise costs and devastate insurance markets. This is why 19 leading patient groups — including the American Heart Association, the American Diabetes Association, and the American Cancer Society; six leading industry groups — including the America’s Health Insurance Plans, the American Academy of Family Physicians, the American Hospital Association, the American Medical Association, the Blue Cross Blue Shield Association and the Federation of American Hospitals; and more than 2,400 faith leaders opposed repealing this provision arguing it would have serious consequences for care, particularly for people with chronic or major health conditions.

One estimate shows in Maine alone, family premiums in the marketplace will increase on average by $2,350 in 2019, and 50,000 Mainers will lose coverage by 2025.

Older Mainers would not be spared. The AARP estimates a 64-year-old will have to pay $1,748 more in premiums because of health repeal, essentially an age tax for people over 50.

In her own words, Sen. Collins expressed concern about including health repeal in the tax bill, calling it the bill’s “biggest mistake.” Last month she said, “The fact is that, if you do pull this piece of the Affordable Care Act out, for some middle-income families, the increased premium is going to cancel out the tax cut that they would get.”

Second, This Bill Jeopardizes Medicare. This tax bill jeopardizes Medicare funding and therefore the guarantee for senior health care. The Congressional Budget Office said budgetary rules would trigger $25 billion in Medicare cutsas a result of the tax bill the Senate passed, which would result in a $120 million cut for Maine next year alone. Sen. Collins said she received a “personal commitment” from Senate Majority Leader Mitch McConnell (R-KY) that these Medicare cuts would not happen. McConnell and House Speaker Ryan said Congress previously waived these rules in the past, so there is no reason why they would not in the future.

But here is a reason: Republicans are already talking about the need to cut Medicare and Social Security to deal with the $1.5 trillion this tax bill adds to the national debt. On the chopping block: Medicare and Social Security. Speaker Paul Ryan (R-WI) recently said, “we’ve got a lot of work to do in cutting spending.” Sen. Marco Rubio (R-FL) was more explicit, saying, “We have to generate economic growth which generates revenue, while reducing spending. That will mean instituting structural changes to Social Security and Medicare for the future.”

Third, Sen. Collins’ Proposed Fixes To Health Repeal Won’t Undo The Harm Of Health Repeal, Even If They Do Pass. Sen. Susan Collins agreed to vote for the tax bill after getting assurances from Senate Majority Leader Mitch McConnell to consider two pieces of legislation she believes would mitigate some of the damage caused by repealing the ACA’s requirement most people have health insurance: the so-called Alexander-Murray and Collins-Nelson bills. However, they won’t work to undo the damage of increasing the number of uninsured, raising costs and destabilizing the markets. Here is why.

The Alexander-Murray bill temporarily funds cost-sharing reduction (CSR) payments that help lower people’s deductibles and other out-of-pocket costs. But that assumed that the marketplaces would not be upended by repealing the individual mandate. Passing Alexander-Murray after repealing health care is akin to installing guardrails on the highway after your car has gone over the cliff. The Congressional Budget Office concluded Alexander-Murray in light of health repeal would essentially be a fig leaf, writing, “the effects on premiums and the number of people with health insurance coverage would be similar.” Plus, the funding for Alexander-Murray would only help lower premiums for silver plan holders in 2019, according to the Center on Budget and Policy Priorities. What about people who chose other types of plans? Their premiums still go up 10 percent. What about after 2019? Premiums go up.

Next, the Collins-Nelson bill would temporarily fund a reinsurance program to mitigate the devastating impacts of health repeal. As the Center on Budgetfound, “Pairing mandate repeal with the Collins-Nelson bill, or a similar approach, thus would not change the fact that repealing the mandate would drive up uninsured rates. That would weaken access to care, health, and financial security for millions of people. It would also substantially raiseuncompensated care costs, which would ultimately be borne by providers, other health care consumers, and taxpayers.”

There Is No Guarantee These Bills Sen. Collins Is Proposing Will Become Law. A close reading of Senate Majority Leader Mitch McConnell’s assurances to Sen. Collins, coupled with past statements from Republican Leaders, raises serious doubts about whether the proposed legislation she wants would become law.

House Republicans have been very reluctant to consider the Alexander-Murray bill. Speaker Paul Ryan has not committed to passing it as part of the tax bill, and he previously opposed it. House conservatives called it a “nonstarter.” President Trump has been all over the map on this issue, from supporting to opposing to again supporting — so who knows what he would do.

Rep. Mark Meadows (R-NC), the chair of the influential House Freedom Caucus objected to passing the Collins-Nelson bill as part of the tax deal.

On ABC’s This Week, Sen. McConnell explained the assurances he gave Sen. Collins:

I’ve committed to Senator Collins to offer Alexander Murray and another bill that she and Senator Nelson from Florida are offering to one of these year-end bills that we’ll be doing in the next couple of weeks. The president is committed to signing it. And we intend to keep our commitment.

So, McConnell is only committing to offering the bills, not guaranteeing they will be included in must-pass legislation. He only mentions President Trump is committed to signing it, but fails to mention anything about the House.

The negative consequences this tax bill has to people’s health care is just one of long list of reasons why Sen. Collins should reconsider her vote as Congress considers a final proposal. There is still time for her to change her mind. We hope she does.