This story was updated June 22, 2017.
There's a simple explanation for the haste with which the Senate is moving to pass a law that will have devastating consequences for the health of the tens of millions of Americans. They need the money.
Under budget reconciliation rules, Republicans cannot enact their tax cut package—one that will shower most of its largesse on large corporations and wealthy individuals—without coming up with offsetting budget cuts. The majority in Congress has put those tax cuts—offered at a time when the stock market is near its all-time high and unemployment has fallen to 4.3%—above continued stability for one-sixth of the U.S. economy.
Lingering hopes that moderates might stop this unnecessary cruelty were dashed yesterday when suburban Atlanta voters rejected sending Washington a message. Karen Handel's narrow victory in the heavily Republican 6th District came despite local opinion polls showing a large majority opposed the American Health Care Act. Moderate challenger Jon Ossoff had made AHCA opposition the centerpiece of his campaign.
House Majority Leader Paul Ryan (R-Wis.) told CNBC yesterday he hopes to put a tax cut bill on the president's desk this fall. The healthcare bill's reduction in the "baseline" was an important building block for that legislation, he said.
Or, to put it in terms a grandmother whose nursing home care is paid by Medicaid could understand, the $800 billion that will be cut from Medicaid's projected growth over the next decade will be used to give tax breaks to those who have benefited most from the bounty of the U.S. economy.
Ryan's and Senate Majority Leader Mitch McConnell's haste is also being dictated by political events. The special counsel's investigation of Russian meddling in the 2016 election and the overwhelmingly negative polls on the AHCA will continue to dominate the news cycle. Despite Handel's victory, they understand Democrats are likely to make big gains next year, and possibly regain control of the House.
But if all goes according to plan, by then the damage will be done. While the AHCA's cuts won't be felt until after 2020, states will need to begin planning right away for the new reality. Well before the Democrats even have a chance to regain control of both the White House and Congress and pass the legislation necessary to reverse the cuts, states will be edging perilously close to the day when they receive less federal support for Medicaid, which provides coverage for more than 1 in 5 Americans.
The impact will vary among the states, which get anywhere from 50% to 74% of its overall Medicaid budget from the feds. The 31 states that expanded Medicaid under the Affordable Care Act will get hit the worst, with nine of them, including Vice President Mike Pence's Indiana, required to institute an immediate rollback of the expansion once federal support falls below 90% of its cost. Medicaid accounted for over 60% of the newly insured under the ACA.
States will need to develop strategies based on four unattractive options. They can either cut back eligibility; eliminate some nonmandatory services; cut rates to providers (already just two-thirds of Medicare rates in average); raise taxes; or adopt some combination of the four.
The odds of raising taxes in most states are slim. Republicans control most statehouses, and almost none of the federal tax breaks they plan to adopt will trickle down to middle-class families, making them less likely to be in a tax-raising mood.
And let's not forget the human cost. Expanding Medicaid saved lives—a 6.1% reduction in mortality each year, according to one study. That translates into tens of thousands fewer deaths each year among the 14 million people new to the program.
After a decade of struggle to make limited progress, the U.S. is on the cusp of a giant leap backwards. Under the AHCA, lower-income Americans will be in worse shape than before Barack Obama became president.
