Quote:The Republican health-care bill threatens Trump's voters
John Harwood | @johnjharwood
3 Hours Ago
CNBC.com
"To the victor belong the spoils," candidate Donald Trump reminded 2016 voters. But the House Republican health bill turns that old maxim on its head.
Instead of broadly rewarding Trump's backers, the House bill hands huge benefits to the tiny share of his voters earning the highest incomes.
Their gains come at the expense of the much larger group of older, blue-collar whites who flocked to his "Make America Great Again" banner.
That redistribution of money from less-affluent Trump supporters to wealthy ones complicates the ability of Congress to deliver on "repeal-and-replace" promises. And it foreshadows tensions within Trump's coalition that will loom over later efforts to enact tax reform.
Lawmakers haven't received formal estimates from the Congressional Budget Office and Joint Committee on Taxation detailing the bill's impact on federal spending and insurance coverage. But its core provisions make some conclusions clear already.
Exit polls showed that just 10 percent of Trump's votes came from Americans earning $200,000 or more. Yet those voters would derive all benefits from the repeal of the two individual tax hikes targeting them: a 0.9 percent tax on their earnings, and a 3.8 percent tax on their investment income.
An even smaller group, the top 1 percent of earners, would receive an average tax cut of $33,000, according to the Tax Policy Center. The top 0.1 percent of earners would receive an average tax cut of $197,000.
But half of Trump's votes came from white voters without college degrees. And those less-affluent voters stand to lose in multiple ways if Congress rolls back Obamacare in favor of the House GOP plan.
An Urban Institute study found that Obamacare reduced the number of noncollege whites without insurance by 6.2 million between 2010 and 2015, a drop of 39 percent. In 20 of the 30 states that Trump won, more noncollege whites gained coverage than any other group.
Under the House GOP bill, those who have gained coverage would face higher costs because the bill's tax credits are generally smaller than premium subsidies through Obamacare exchange marketplaces.
An analysis led by Harvard health economist David Cutler estimates those increased costs will total an average of $2,409 in 2020.
Whites aged 45 or older provided 56 percent of Trump's votes. Older Obamacare enrollees would be hit particularly hard by the House bill because it curbs age-based insurance subsidies.
Enrollees aged 55 to 64, the Cutler study found, would face higher costs averaging $6,971 in 2020.
The House bill would also produce major reductions in spending on Medicaid, the expansion of which generated a large proportion of Obamacare's gains in insurance coverage. The liberal Center on Budget and Policy Priorities estimates the reduction in federal spending on the program at $370 billion over 10 years.
Medicaid has long been a target of Republican budget cutters, both because the party favors smaller government and because it provides health care to poor Americans who tend to support Democrats. Nationally, most Medicaid enrollees are nonwhite.
But in some key states that backed Trump, whites comprise a large majority of nonelderly Medicaid beneficiaries: 65 percent in Ohio, 60 percent in Wisconsin, 60 percent in Michigan. Those proportions are as high or higher in smaller Trump states such as West Virginia (89 percent), Montana (83 percent), Kentucky (77 percent) and Arkansas (62 percent).
The House GOP's reductions would affect all Medicaid beneficiaries, not just those added to the rolls under Obamacare. That includes more than 6 million senior citizens with incomes and assets low enough to qualify for the program.
Medicaid finances most nursing home care in the United States. Unlike the program's nonelderly beneficiaries, a 54 percent majority of beneficiaries aged 65 or older are white, according to the Kaiser Family Foundation.
That means the House bill would pinch Trump's blue-collar white supporters in two ways – crimping their own Medicaid coverage, and that of their elderly parents.
Fear of such consequences hardly deterred Trump supporters on Election Day. Eight in 10 of Trump's votes came from Americans who said Obamacare "went too far."
But some Republican lawmakers whose constituents would be affected have begun speaking up. Four Republican senators — including Rob Portman of Ohio and Shelley Moore Capito of West Virginia — signed a letter opposing the House bill's Medicaid provisions.
In Arkansas, the Urban Institute found Obamacare reduced the ranks of the uninsured by more than the national average. Sen. Tom Cotton has complained that the House is moving too quickly.
In Kentucky, Obamacare reduced the proportion of noncollege whites without insurance by 63.6 percent — the largest reduction of any state. Sen. Rand Paul, insisting the bill too closely resembles Obamacare, vows that conservatives will kill it.
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