Senate health care bill should pass as is

The much-ballyhooed Senate Republicans' health care reform — officially the Better Care Reconciliation Act of 2017 and better known as "Obamacare" repeal-and-replace — is now the center of public debate. Much of the discussion has focused on issues of timing — the "secretive" process by which the bill was developed, the putative "jamming" of the bill forward for a floor vote and now a delay of the vote until after the July 4 recess. But to begin: What's actually in the BCRA?

If you start from the perspective of the Affordable Care Act — that it should be illegal to be uninsured and that there should be no limit to the amount of taxpayer money subsidizing coverage — the BCRA is a sharp departure. But it makes sense to change course. After all, the single most amazing thing about the ACA is that it made it illegal to be uninsured, topped that off with hefty coverage subsidies and still failed miserably to hit its coverage goals.

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The BCRA addresses the reality that the ACA infringed personal freedoms, was an economic burden (enacted when the United States was suffering the aftereffects of the Great Recession), was irresponsible budget policy and fell well short of its goals. The BCRA cuts $700 billion in taxes and reduces the regulatory burden. Instead of worsening the country's already daunting debt outlook, it reforms two entitlement programs and reduces the 10-year deficit. Additionally, within the constraints of fiscal reality, it focuses Medicaid funding and individual insurance subsidies to offer coverage opportunities to the neediest Americans.

The starting point is stabilizing the broken ACA markets by providing subsidies to cover the out-of-pocket costs of low-income individuals for 2018 and 2019. The BCRA devotes $50 billion to a short-term stabilization fund, part of $86 billion dedicated to insurance markets in the first four years.

Individuals will be eligible for subsidies to purchase insurance, but those subsidies are restricted to those with incomes below 350 percent of the federal poverty line — tighter targeting than the ACA. In addition, the subsidies reflect not only the incomes of purchasers but also their ages. This structure will attract younger individuals, assist older workers and help balance risk pools, which proved to be the Achilles' heel of the ACA.

The subsidies will be available to anyone under the income limit, thereby filling the ACA's Medicaid coverage gaps. Medicaid financing will move from the open-ended draw on taxpayer dollars that has fueled unsustainable growth to "per capita allotments" — fixed amounts for each type of beneficiary. (There is also an option for states to elect a block grant.) This serves to put this piece of the social safety net on a sustainable financial path — in sharp contrast to Medicare, Social Security and the other financially challenged programs.

But this is not a budget-driven, slash-and-burn exercise. Compared with historical Medicaid growth, the allotments are generously over- indexed for inflation in the early years, with the inflation adjustment gradually slowed later on. This reflects an abundance of caution and is worlds away from any rhetoric that refers to "draconian" Medicaid cuts.

Critics will disagree and quickly point out that the nonpartisan Congressional Budget Office projected that the BCRA would reduce the number of insured people by 22 million over 10 years. But a closer look at those numbers reveals that this is in large part about the flaws of the ACA. In 2018, the BCRA makes no changes to "Obamacare" other than to stabilize the "Obamacare" markets and eliminate the individual mandate. Result? Fifteen million Americans immediately flee the individual, employer and Medicaid markets and choose to be uninsured.

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Moreover, the CBO is required to compare the BCRA with current law. For Medicaid, that means it must assume that the financially unsustainable entitlement will continue to swell to cover about 5 million more people, accounting for the bulk of the remaining 7 million uninsured. Not likely. For the individual ACA markets, it means the CBO assumes that enrollment rises by 30 percent over the next 10 years — a sharp contrast to the reality of insurer after insurer walking away.

Much of the criticism of the BCRA was directed at the legislative process. While hardly following a civics textbook, ultimately this will not matter. From the outset, Democrats announced their opposition to any bill repealing "Obamacare," thus ceding their right to shape such legislation. At that point, the die was essentially cast. The resulting legislation would inevitably migrate to the ideological midpoint of the Senate Republican caucus, regardless of whether there were four markups or 400. The BCRA as released is exactly what a committee process would have produced. Democrats' complaints that the bill was being rushed to a vote ring hollow. How much time do they need to vote no?

Finally, politics predictably forced Senate Majority Leader Mitch McConnell, R-Ky., to delay a vote to buy time to make changes to the bill. But he should (and probably will) resist the temptation to make anything more than cosmetic changes. The BCRA that he has is the BCRA that should pass.

Douglas Holtz-Eakin is president of the American Action Forum and former director of the Congressional Budget Office.

The views expressed here are the writer's and are not necessarily endorsed by Alaska Dispatch News, which welcomes a broad range of viewpoints. To submit a piece for consideration, email commentary@alaskadispatch.com. Send submissions shorter than 200 words to letters@alaskadispatch.com.