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“Trumpcare” Part Two – cutting Virginians’ health care to fund tax breaks for the wealthy

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by Del. David Toscano

June 30, 2017

Donald Trump had it right when he described health care in the United States with the phrase, “It’s complicated.” And now Republicans at both national and state levels are discovering how complicated it is.

President Obama’s significant legislative achievement, the Affordable Care Act (ACA), has survived a number of legal challenges and been the law of the land since 2010. It made major changes in a healthcare industry that represents 18 percent of the GNP, providing substantial benefits to a wide variety of Americans, including thousands of Virginians. The percentage of Americans with health insurance has risen dramatically. The law allows families to cover their children on their health insurance plans through age 26, and prevents insurance companies from discriminating against people with pre-existing conditions.  ACA established certain “essential health benefits” that must be included in all insurance plans, and provided an incentive for states to include more people in their Medicaid programs. It established a mechanism by which working families could purchase health insurance on “insurance exchanges” and receive tax subsidies to assist them in doing so.

Trumpcare threatens to undo many of these provisions, and, in the process, provide a major tax break to the wealthiest people in the United States; the Congressional Budget Office (CBO) says that the Senate bill cuts taxes by $1 trillion over 10 years, with one-third of that amount going to the 100 wealthiest families in America. This is not “repeal and replace;” rather, it is an example of “cut and redistribute.”

In the last six years, Republicans in the House of Representatives have voted to repeal the ACA over 60 times, and, when President Trump was elected, they believed that the time had come to destroy the most significant piece of the Obama legacy.

On May 6, 2017, the House passed, by a 217 to 213 party line vote, a bill to repeal many elements of the ACA. The Senate has struggled ever since with how they would address the health plan. On June 22, 2017, after weeks of secret negotiations, the Senate GOP released its own version of repeal and replace. It remains to be seen whether their initiative can pass the Senate in its present form. No major health provider groups–not physicians, nurses, hospitals, or insurance providers–support these changes. The AARP opposes it because it will hurt seniors in significant and perilous ways; their premiums are projected to rise by over 20 percent.

Virginians Will Feel The Pain  
The implications for Virginia in the passage of either of these bills are likely to be substantial, particularly in the Medicaid field. Not only will 23 million Americans and over 400,000 Virginians lose insurance coverage, but the federal cuts in Medicaid will blow a $1.4 billion hole in our Virginia budget over the next seven years. It is projected that Trumpcare will raise premiums for individuals by as much as 20 percent, increase deductibles, and hit elderly and rural Americans the hardest–all to support a major tax break for the wealthy, many of whom already have insurance through their work.

The Republican mantra for years has been that “Obamacare is failing” because it leaves some people with burdensome health insurance costs, and that insurance companies are fleeing the marketplace in some parts of the country.

These assertions are largely false. While the ACA has problems, the facts are clear.  Health insurance coverage has been expanded by more than 20 million people. Increases in insurance costs since enactment of ACA have been well below historical trends, and lower than predicted when the law was adopted. Millions of people in need have been added to Medicaid in the states, with the result that they have access to care in ways that they did not have before.

The ACA is not perfect and there are certainly ways to improve it, which   have been detailed by many experts. But Republicans appear not to be as interested in fixing the problems as   they are in pushing the ACA into a “death spiral,” in hopes that citizens  will view the program as a failure and  as justification to eliminate it  altogether. They have been very effective in controlling the narrative      in this arena, but the public is catching on. Not only  is Trumpcare extremely unpopular, but in the eyes of Americans, Republicans now own the healthcare issue.

Huge Cuts In Medicaid Will Hurt Virginia MORE Than Most States
As state policy makers are discovering, Trumpcare will wreak havoc on the states, particularly in the area of Medicaid. Under the Republican plan, federal support for Medicaid will either be capped on a per-person basis or “block granted” to each state based on 2016 spending. Not only will the impacts be immediate, but CBO projects even more dramatic reductions in Medicaid in the next decade.

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Virginia  has been relatively frugal in its Medicaid spending  (we rate 47th in the country in spending per capita). Because of this, we will receive less money proportionally than other states under the new proposal, and our federal reimbursements will rise more slowly. The numbers of our citizens requiring assistance, however, will not. Since the largest share of Medicaid goes to help the elderly, and Virginia’s elderly population is likely to double by 2030, a cap on federal contributions will only place our state budget in greater peril. And when you consider that the increase in the elderly population is disproportionately felt in rural areas of the Commonwealth, we could see a cascading effect making those areas even more economically challenged than they are at present.

Uncomfortable Challenges Ahead
If Trumpcare is passed, Virginia will be faced with the uncomfortable options of removing recipients, eliminating benefits, reducing reimbursements to nursing homes, hospitals, and caregivers, cutting other portions of our budget, or enacting a tax increase.  Using 2016 as the baseline for Medicaid reimbursement would likely eliminate some of the programs that we recently enacted, including our Addiction Recovery and Treatment Services (ARTS) program designed to address Virginia’s opioid epidemic.  It would also jeopardize our bipartisan efforts to increase services for our intellectually and developmentally disabled citizens.

Whether Republican leadership in Virginia will summon the political will to oppose these policies is not yet clear.   Several leaders from Virginia’s budget committees have indicated their concern about the proposed ACA repeal, but, aside from these notable exceptions, there has been deafening silence. To remain silent in the face of proposals that will clearly hurt Virginia is a mistake, and we instead should be doing all that we can to educate our citizens and our leaders about the implications of a failure to stop the US Senate and House proposals.  We should not sacrifice access to insurance to fund tax benefits for the wealthy.

  • Quizzical

    Great article. Del. Toscano is really smart, and Virginia is going to need really smart leadership in the future.