A poison pill we shouldn’t swallow
IF ENACTED, the American Health Care Act (AHCA) will be the most devastating attack on New Deal/Great Society programs that the United States has seen in the last 40 years. It will shape the experience of working-class life, as well as the political, ideological, and economic terrain of class struggle more than perhaps any other single piece of legislation in the post-financial crisis era.
To fully capture the bill's implications, we must recognize how we got to this moment and how this history can shape our resistance efforts. The AHCA's predecessor, the Affordable Care Act (ACA, better known as Obamacare), midwifed the current legislation in ways that unions, health-care justice organizations, and the left must understand. The far right capitalized on Obamacare's failures, convincing significant sections of U.S. society to support more extreme forms of austerity.
Paradoxically, the rightward trend in mainstream American politics offers the U.S. left a historic opportunity to build mass resistance to neoliberalism.
HOUSE SPEAKER Paul Ryan and President Donald Trump would like us to believe the AHCA "repeals and replaces" Obamacare. It doesn't. Much of the ACA's framework would stay in place: Most importantly, Trumpcare maintains the provisions that subsidize private insurance costs, though through tax credits.
To get the bill passed, Trump and Ryan are squeezing it through the budget reconciliation process, a filibuster-proof system that only requires a simple majority vote. This strategy restricts the AHCA to funding provisions, leaving important regulations on the health-insurance industry intact. This represents the bill's only virtue; these regulations, along with Medicaid expansion, were pretty much the ACA's only progressive elements.
What the AHCA does, however, is drastically modify the procurement and allocation of roughly $500 billion in annual health-care spending. While it doesn't alter the programs this money funds--Medicaid and Medicare, insurance subsidies and a vast network of health-care institutions--it does qualitatively change where that money comes from, how much is available, and where it goes.
Put simply, Trumpcare takes funding away from the poorest Americans and transfers it to the richest.
As with the ACA, the media has largely focused on how the AHCA will affect coverage. Its changes are, indeed, profound. The Congressional Budget Office (CBO) has predicted that 26 million people will lose health coverage over the next 10 years, returning the overall number of uninsured people in the United States to more than 50 million.
Most of these people will be working and non-working poor people cut from Medicaid's rolls. But a sizeable chunk will be those who can no longer afford their premiums because of the AHCA's subsidy changes.
Under the proposed bill, tax credits are pegged to age, not income. Further, Trumpcare drastically reduces these discounts, so most beneficiaries will pay significantly more for their health insurance.
People in their 20s will receive a $2,000 annual subsidy. Their insurance will be fairly cheap, but the available plans will belong to the "low premium, high deductible and co-pay" category that already plagued the ACA exchanges. The AHCA also allows insurance companies to charge older people five times more than younger folks, and the tax credit for Americans aged 60 and above will total just under $5,000.
Precisely the people who need coverage the most won't be able to afford it. And that's on purpose. The AHCA aims to stabilize the insurance markets in the absence of the individual mandate by getting older patients with higher costs to drop out. Once you lose coverage, you have to pay a 30 percent surcharge to your insurance company to sign back up.
These 50 million uninsured Americans will undoubtedly delay necessary medical treatments and flood emergency rooms for care. There, they'll be joined by people who do have insurance, but, thanks to high deductibles and overcrowded facilities, now rely on urgent care for many of their health-care needs. Public health providers, already severely weakened by the Affordable Care Act, will become extremely overburdened.
BEYOND THIS wholesale reduction in coverage, the changes to funding streams and what they will do to the viability of entire sections of American health care is even more catastrophic.
Disemboweling Medicaid is the economic and ideological axis on which this legislation turns. Currently, the federal government allocates Medicaid funding to states based on utilization. Each state determines the scope of benefits and pays about 25-50 percent of the total, with the federal government covering the rest. Essentially, how much health care is used determines the amount of federal funding.
The AHCA would instead give states a fixed amount based on the number of enrollees, an amount that the government will intentionally set very low. States with higher per-capita health-care expenditures--because they have sicker populations, because their property values are higher and for a host of other reasons--will have to figure out how to make up the difference.
Trumpcare also freezes all federal matching funds for new Medicaid enrollees after 2020. The CBO report estimates that this will reduce federal Medicaid expenditures by a staggering $880 billion over 10 years. This guts a key element of the U.S. social safety net to an unprecedented degree.
The resulting fiscal crisis will turn every state budget fight into an all-out war. Politicians will have to choose between enacting huge tax increases or approving equally huge cuts to Medicaid and other state-funded programs. Without a serious movement for taxing the rich, the latter will prevail.
The New York State Department of Health, for instance, estimates that the AHCA will cost the state $4.5 billion over the next four years. That figure includes reducing Medicaid enrollees ($1.6 billion), eliminating funding for undocumented immigrants ($1.5 billion), and cutting direct funding to other programs ($1.4 billion); these figures are probably low estimates, as they do not incorporate the impact of per-capita funding, which will significantly increase the state's expenditures.
THE AHCA would eliminate almost every tax-based funding mechanism the ACA created. For the most part, Obamacare's funding had a progressive structure, meaning that higher-income people paid higher tax rates. Trumpcare does away with these provisions, turning it into a massive tax cut for the wealthy. Eliminating the Medicare tax surcharge alone will cost the program $117 billion by 2026. (This after the ACA already slashed federal Medicare expenditures by an average of $60 billion per year.)
It's a sobering fact that a bill that includes the largest tax cuts for the wealthy since the Bush era will end up reducing the federal budget deficit. This net gain comes from deep cuts to federal health-care funding.
The giant vacuum of wealth extraction from the bottom to the top will create a new epidemic of hospital and clinic closures and more consolidations and mergers, leaving private equity firms and the relatively more solvent academic medical centers to pick at now-bankrupt facilities' carcasses. In other words, like everything about Trump's first one hundred days, this is not a drill.
Just as they did when introducing the barrage of executive orders, the GOP and Trump have tried to justify this Robin-Hood-in-reverse barbarism by using racialized, gendered, and anti-poor scapegoating. This bill is premised on the belief that health care is not a right, and that it you want state benefits, you should be forced to work for them.
This argument will likely take shape in state legislation that ties Medicaid to work requirements. Indeed, Arkansas is already trying to apply Clinton-era welfare-to-work strategies to Medicaid.
The AHCA will also defund Planned Parenthood, immediately crippling the institution that performs over a third of all abortions in the United States as well as providing other critical reproductive and women's health services. This move not only reduces federal spending for health care, but also shores up anti-abortion support for health-care austerity, returns some favors to the Christian right, and scapegoats women.
Overall, the AHCA belongs with the rest of Trump's proposals so far: it massively favors the wealthy over the working class; it mines public goods for private profit; and it scapegoats historically marginalized groups to get the job done.
AS HORRIFIC as the AHCA is, it's important to understand that it stands on Obamacare's shoulders.
The ACA fundamentally restructured health-care funding, reducing Medicare reimbursements and eliminating federal funding for the uninsured (known as Disproportionate Share Hospital funding). This helped stratify hospital care, buoying large academic medical centers that treat people with good insurance while undermining safety-net hospitals that rely on Medicaid and Medicare funds to care for the uninsured. For instance, the largest public hospital system in the country, New York City Health and Hospitals, now faces a $2 billion per year structural deficit.
Moreover, Obamacare advanced the neoliberal method of public-private partnerships in health care, funneling hundreds of billions of federal tax revenue into the health insurance industry.
The ACA promised to reduce health-care costs, but many participants found their plans unaffordable and their out-of-pocket costs rising. Because costs didn't decline, the bill gave health insurance companies license to raise premiums and limit benefits.
The best part of Obamacare, the Medicaid expansion, provided increased health care coverage, but it couldn't guarantee genuine access because funding cuts sent the doctors and hospitals that accept Medicaid reeling. This allowed Republicans to portray the ACA as the failure of socialized medicine, even though it was anything but.
Consequently, we are now in the midst of a worldwide political dynamic in which far-right-wing forces capitalize on genuine working-class resentment of neoliberal economic restructuring that, more often than not, was implemented by liberals and social democrats.
The political lesson is clear: you can't fight the right from the center. This is not only true electorally--although the abject failure of the Clinton campaign serves as remarkably convincing evidence. It's also true in terms of the kinds of reforms we fight for and the political vehicles we use in these struggles.
The corporate-controlled Democratic Party is not offering a political alternative to Trump and Trumpism. Obama wouldn't back a single-payer, Medicare-for-all plan that would have actually controlled costs and provided improved and universal access. This failure directly resulted in Trumpcare.
IN THE face of the largest reduction to federal health-care spending since Medicaid and Medicare were introduced, it may seem ridiculous to call for a single-payer system, which would represent the most expansive increase in federal funding. But especially at the state level, the opening is larger now than at any point since the ACA was passed.
New York and California offer significant opportunities to build a real movement. Both of these states have a relatively wealthy tax base, active single-payer legislation moving through their legislatures, and strong nurses' unions throwing their full weight behind the effort. Both state governors are neoliberal Democrats who will soon be saddled with the serious political burden of massive federal funding cuts. Both should be looking for drastic solutions. In New York at least, Gov. Andrew Cuomo is eyeing the 2020 presidential race and, in the wake of the Sanders campaign, could be looking to shore up some progressive credentials.
But as everything after 2008 has clearly shown, crisis won't be enough to convince corporate-owned politicians to change course. Only massive pressure from below can make that happen. Even though the nurses' unions, with organizations like Physicians for a National Health Program, Health Care for All, and the Labor Campaign for Single Payer have done impressive work, the fight for universal Medicare hasn't reached the necessary level of a social movement.
For one, the rest of the labor movement needs to join the fight. The connection between the single-payer movement and large health-care unions like SEIU and AFSCME should be obvious, as these unions will be severely impacted by the changes in health-care funding. But this is true for the rest of the labor movement as well, given that most unions find themselves mired in protracted contract battles over who should cover rising health-care costs.
The AFL-CIO stridently opposes Trumpcare, but supported the Affordable Care Act. Its interest in single-payer has been half-hearted at best, thanks to its political allegiances to the Democratic Party establishment. This can change, but an organized, rank-and-file effort needs to be made.
Trumpcare faces unprecedented opposition from AARP, the American Medical Association, and the American Hospital Association as well as from dozens of other medical organizations. While this will help weaken its support, these forces are unlikely to join the single-payer movement anytime soon.
But new possibilities have recently opened up, as palpable, hyper-politicized, mass resistance to Trump's overall agenda is beginning to take shape.
The Women's March on January 21 was the largest day of action in American history and helped spawn a nationwide defense of Planned Parenthood. Organized actions took place in over 150 cities, with marches of 5,000-6,000 in San Jose and Minneapolis. Given that the AHCA will take away Planned Parenthood's public funding, the single-payer movement can directly connect with these activists. The Women's Strike on International Women's Day helped buttress the idea that women's liberation and economic power are intimately connected.
Similarly, a significant movement in defense of immigrants has emerged. Starting with the airport protests against the first Muslim ban, continuing with the Yemeni-owned bodega strike, and flowing into A Day Without An Immigrant protests, these actions have given the consequences of Trump's ruthless policies a human face and highlighted immigrant communities' agency and economic power. This movement should include the fight for immigrant health care, which Obamacare threw under the bus and the AHCA further threatens.
Bringing these movements together will have profound organizational effects and will help shore up the ideological resistance to neoliberalism. Scapegoating has always played a central role in neoliberal transfers of wealth. The single-payer movement should explicitly take up the racialized and gendered scapegoating embedded in Trumpcare to further underline who does and who does not benefit from Trump's agenda.
The AHCA's effects will reach deep into the lives of working-class people and produce additional anger and disillusionment. The left's ability to provide a viable political alternative will help determine where this frustration gets channeled. We must consider this dynamic both in choosing the reforms we demand and in building the organizations to fight for them. Luckily, there hasn't been a better opportunity to develop a real left alternative.
First published at Jacobin.