Pennywise, Pound Foolish: Takeaways from the Senate Health Care Bill (Better Healthcare Reconciliation Act)

Posted June 26, 2017

This commentary was authored by Kimberley Isett, associate professor in the School of Public Policy in the Ivan Allen College of Liberal Arts at Georgia Tech.

To borrow an observation from the 45th president of the United States, healthcare is complex. The general complexities of producing a healthy society are further compounded by the commodification of healthcare in this country. This commodification conflates health and economic decisions for both individuals and governments. Fundamentally, treating healthcare like a commodity is the direct cause that, despite the U.S. spending a larger portion of GDP (about 20%) than any other industrialized nation on healthcare, our outcomes are closer to emerging economies than our economic peers. 

Central to our health outcomes is access to care. Access to care is comprised of many things: Are there facilities (hospitals, clinics) to get care? Are there providers (doctors, nurses) to give care? Are there excessively long waits to receive care; are the distances to travel to get care excessive? Is the necessary technology to diagnose and treat available? Finally, is there an available payer for care?

If you do not have access to care, you cannot get it. The last of these kinds of access — payment for care — is the type of access that the Affordable Care Act (ACA) expanded for millions of Americans. And it is that which is primarily at stake in the Senate’s new bill. To be clear, financial access does not guarantee, or even facilitate, the other kinds of access mentioned above, but it does make them possible. So although financial access is not sufficient, it is a necessary condition for receiving health care in this country.

So how does the current Senate bill affect access? In several ways:

·       Greater than $800 billion in cuts to Federal monies, along with spending caps to limit the financial liability of the Federal government will force states to either make up the difference or cut roles to meet their constitutional balanced budget requirements. These cuts are greater than in the House version of the bill. 
Result: the 14 million people newly covered under the Affordable Care Act expansion will be in jeopardy for being cut from Medicaid.

·       Tax subsidies are cut and deductibles are likely to rise. This will price many individuals out of the new insurance markets.
Result: More individuals too poor to afford insurance in the marketplace but “too rich” to qualify for Medicaid will be left uninsured.

·       Although individuals with pre-existing conditions cannot be denied coverage, waivers to provide “essential services” like maternity and mental health care have been made easier to obtain. So individuals can get insurance, but it won’t cover basic healthcare needs. Community rating is also in jeopardy. Community rating requires insurers to charge rates based on a population, not individual backgrounds. This protects sicker individuals from being charged more for insurance.
Result: Those individuals who have known healthcare needs will be forced to pay more for less coverage. This will result in huge disparities in care and large (and likely, growing) premiums for individuals who are unlikely to be able to bear the burden.

Not only does financial access to health care decrease as a direct consequence of this bill, but access to health care facilities will also decrease as a secondary outcome of the bill. Why? Because rural hospitals are already in jeopardy of closing. These hospitals often serve the sickest and poorest among us who rely heavily on Medicaid. If Medicaid coverage shrinks, hospitals won’t get paid. If hospitals don’t get paid, they cannot operate and must close. Then these rural populations are virtually left without any access to health care providers at all. This is already in near crisis proportions in Georgia. The new bill would hasten the already troubling trends.

Currently, with the expanded coverage under the ACA, one quarter of Americans struggle to pay health care bills. This number will grow if the Senate bill passes. A recent Kaiser Health Tracking poll showed that the ACA had a 51 percent favorable rating among Americans. And few Americans report that repealing and replacing the current healthcare act is a top priority. In fact, support for repeal and replace among both Republicans and President Trump’s supporters has decreased 12 - 14 percent. Yet, in the first five months of this new administration we are seeing a second attempt to do just that. 

Estimates suggest an additional 22 million individuals will be left uninsured by this bill. Reducing financial access to care will increase the burden on families to pay for exorbitant medical care costs. It will also force individuals to delay care until they are sick enough to use emergency care and not be turned away. If these individuals cannot pay for health insurance, they surely will not be able to pay for the cost of catastrophic care. Those catastrophic care expenses are borne by someone. Guess who? All of us — through higher charges on procedures to help hospitals recoup costs, and through government aid (usually local tax dollars) to offset all of the uncompensated care. So society pays one way or another. The question is, how transparent do you want your bill to be?