The GOP Health-Care Bill Is the Ultimate Reverse Robin Hood
If it becomes law, average households will lose money, and millionaires would get a windfall.
The American Health Care Act, which the House of Representatives passed Thursday afternoon, is a cruel bill, one that seems exquisitely designed to afflict the afflicted, comfort the comfortable, punish the sick, immiserate the poor, and move the United States—nearly alone among advanced countries without universal insurance—further away from a morally defensible health-care system.
Indeed, it is the very picture of a reverse-Robin Hood legislation, in which the poor and old would receive fewer benefits from the federal government, and these savings would be given back to the richest 1 percent as a large tax cut. This graph of tax and benefit changes from the Tax Policy Center tells the whole story.
Estimated Net Transfers (Benefits Minus Taxes) Under the AHCA, 2022
According to TPC analysis, households making less than $20,000 would lose at least $1,000 in benefits, on average. Households making more than $1 million would keep an extra $51,000 in post-tax income, on average. In other words: Under this bill, the median household would lose money, and millionaires would add the income-equivalent of a median household.
How does the AHCA get so much so wrong? Although the Congressional Budget Office has not scored the bill that Congress passed, the most significant components have already been analyzed, and there are three main parts.
First, on taxes, the bill would undo the tax penalty associated with the individual mandate and repeal Obamacare’s taxes, including the 3.8 percent surtax on investment income and a 0.9 percent surtax on wages for households making more than $250,000. Second, it would phase out the Medicaid expansion and cut funding to the program, depriving up to 14 million people of health-care by 2026, according to the CBO. Third, it would allow insurers to charge more for patients who are older and sicker—including those with pre-existing conditions, like cancer, diabetes, or even injuries from domestic violence—while allowing young, healthy, high-income adults to save money on skimpier insurance.
House Speaker Paul Ryan and other Republicans have defended the bill with vague allusions to choice, freedom, and cheaper premiums, but the bill itself is a violation of practically every promise from President Donald Trump and many of the 217 Republicans who voted for it. Rather than protect Medicaid, as Trump promised, it cuts Medicaid severely. Rather than cover “everybody,” as Trump promised, it will deprive about 24 million people of health-care, which is just shy of the population of Texas. Rather than protect coverage for people with preexisting conditions, as Trump promised, it will force many sick patients to pay thousands of dollars extra to buy insurance. Rather than ensure that the rich do not get a tax cut, as Treasury Secretary Steve Mnuchin pledged in an interview last November, this bill creates a $600 billion tax cut that goes entirely to high-income households. Rather than make insurance more affordable, as Republicans have promised over and over, an early 60-something making less than $27,000 would go from paying a few thousand dollars max on a premium and out-of-pocket expenses to spending half his or her income on insurance.
Obamacare has issues. Premiums are rising faster than anticipated in some states, and big-name insurers are pulling out, or threatening to pull out, of the exchanges. The rising cost of coverage in some areas could discourage healthy young people to leave the insurance market entirely, even at risk of paying a penalty, which could drive up insurance costs even more for less-healthy people. Although the Congressional Budget Office predicts that the recent round of premium hikes might resolve itself, there is a clear political mandate to improve the status quo.
But the Republican replacement bill improves nothing. It doesn’t reduce premiums for the sick, or expand coverage. It just takes a pool of federal funds used to expand coverage to lower- and middle-class families and transfers it back to rich Americans. If Obamacare is unpopular in name, while its provisions are well-liked, its replacement is popular only in name, and its provisions are despised.
The problem with Obamacare, Ryan said in March, “is the people who are healthy pay for the people who are sick. It’s not working.” For all the deception around the AHCA, this is the truest summary of conservatives’ objection to the Affordable Care Act and the modern social safety net—that it is, somehow, immoral for American individuals to be compelled, against their will, to part with their income for the purpose of creating an insurance pool to protect the vulnerable. This is the only philosophy that justifies this reverse Robin Hood bill. But this is not an attempt to fix anything that is wrong with the health-care system; it is an attempt to undo the effort to cover the poor with the income of the rich. It is American exceptionalism of the worst kind.