Senate Healthcare Bill Will Cause 22 Million to Lose Health Insurance, Tens of Thousands to Die

Posted June 28, 2017

MP3 Interview with Gerald Friedman, professor of economics at the University of Massachusetts, conducted by Scott Harris

health

After the Republican-controlled House of Representatives managed to narrowly pass a long-promised bill to repeal and replace Obamacare, the U.S. Senate unveiled their version of the legislation on June 22, which had been written in strict secrecy. Like the House bill, the Senate’s “Better Care Reconciliation Act” would dramatically reduce funding for Medicaid, forcing states to downsize their programs and decrease the number of recipients, who will then lose coverage. While the Senate bill would maintain some of Obamacare's subsidies, they will be greatly reduced, particularly for older Americans.

Both the House and Senate legislation would repeal the mandate for Americans to buy insurance and most employers to offer it. As a result of the elimination of Obamacare taxes, those in the top 1 percent, who earn $875,000 annually and more, would receive average tax savings of $45,500 a year.

The non-partisan Congressional Budget Office analysis of the Senate bill found that 22 million more people would lose health insurance coverage by 2026, with 15 million losing their coverage in 2018. The CBO also estimated that premiums and out-of-pocket expenses would increase for many low-income people and for people nearing retirement age. After a growing number of Republican Senators announced their opposition to the bill, Senate Majority Leader Mitch McConnell postponed a vote on the legislation that he had scheduled for before the July 4 holiday recess. Between The Lines’ Scott Harris spoke with Gerald Friedman, professor of Economics at the University of Massachusetts, Amherst, who served as an economic adviser to Vermont Sen. Bernie Sanders during his presidential campaign. Here, Friedman examines key elements in the Senate bill and its likely impact on life and death healthcare issues for millions of Americans.

GERALD FRIEDMAN: We've seen three bills. The first House bill which never came to a vote. The second House bill that passed and now the Senate bill. They've had in common, eliminating all the taxes associated with the Affordable Care Act. That is the priority for the Republicans. These are the taxes that are paid by the wealthiest one percent or so of Americans. Those earning over $250,000 a year and a lot of people don't realize that there were taxes associated with the Affordable Care Act, because most people don't pay them. And these bills all eliminate these taxes, although there's some variance in whether the taxes will be eliminated immediately or after a year. That generates a reduction in revenue for the federal government of about $600 billion over 10 years. Now, under the rules, if you are going to cut taxes by that much, you need to cut spending by that much. And the Republicans are happy to do this, because the second thing the bills have in common are cuts to Medicaid.

And these cuts to Medicaid, which Medicaids covers about 20 percent of the American public now and reducing Medicaid is a big deal because most of the spending on Medicaid goes to children, goes to the elderly, nursing homes and goes to the disabled. So you're cutting Medicaid, you're cutting health care for many of the most needy Americans.

Each time they've come at this, each of the three bills, the cuts to Medicaid have grown larger. The current Senate bill cuts Medicaid over 10 years by about $800 billion, basically taking $500 billion, $600 billion out of Medicaid and giving it to the rich.

Also, the CBO scoring has a 10-year window. They've backloaded the cuts to Medicaid so they will be growing even more. They're cutting 20 percent of Medicaid spending over the next 10 years. It's going to be more than 20 percent in the ten years after that.

The third element is eliminating or transforming the subsidies provided in the Affordable Care Act for working people to buy health insurance. Poor people were put on Medicaid and in many states like Connecticut and New York, they did a Medicaid expansion, and low-income people are on Medicaid. Above that, about 138 percent of the poverty line, people who didn't have health insurance were given subsidies under the Affordable Care Act to buy health insurance. The Republicans have transformed those subsidies and each of the bills are a little bit different.

The House bill on this is a little bit worse because it got rid of those subsidies linked to income entirely and instead provides subsidies linked to age, which means that higher-income people at different ages would be getting subsidies. So not only are you cutting taxes on the rich, but you're giving money to rich people and taking it out of working people.

BETWEEN THE LINES: Professor Friedman, I have read some studies that correlate the uninsured people in this country with an increase in the rate of deaths that occur when the families don't have health insurance. What are the estimates here, given the CBO scores of both the House and Senate bill of 23 million and 22 million people without health insurance over the next decade? What are the numbers of people that will likely die because of the lack of health insurance?

GERALD FRIEDMAN: A rough rule of thumb and using a conservative projection, is a thousand people die for every million people without health insurance. If you go on that number, then 2018, when they project 15 million people will not have health insurance, there'd be 15,000 additional deaths, which is more than the peak for the Vietnam War for the United States. By the end of the period, when 22 million people are projected not to have health insurance, there'd be 22,000 deaths.

On average over the 10-year period, there'd be about 18,000 extra deaths, or about almost 200,000 extra deaths in the United States over this 10-year period. That's a conservative number, first, because I think the CBO is downplaying the number of people who lose health insurance, and second, because it's not taking in account the number of people who will die because they have inadequate health insurance. I mean, the health insurance plan that has a $5,000 deductible and an actuarial value of 54 percent, is not enough insurance for people to actually see the doctor or fill prescriptions.

I've estimated, using county data, that there about four people who die because they have inadequate insurance; they're underinsured for every person who dies because they don't have any insurance. If you assume that that will hold here and that the number of people dying because their insurance coverage gets worse under this, you know, the insurance coverage doesn't have essential benefits they need, etc. – then we could be looking out over 10 years as many as 800,000 Americans dying because of inadequate insurance or lack of insurance altogether.

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