Op-Ed Columnist: This Tax Bill Is Now a Health Care Bill

Less health insurance for some, more tax cuts for others.

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Republican leaders in the Senate somehow needed to find an extra few hundred billion dollars.

They needed to find that money because they want to cut taxes on the wealthy — and cut them deeply. By the time the Senate leaders had finished coming up with all of their top-end tax cuts last week, their bill was projected to cost more than the House had previously committed to spending.

So how could the Senate solve its shortfall?

One option would have been to cut taxes a little less for the wealthy. That is not the option the Senate leaders chose.

Instead, they said yesterday that they would be getting rid of the individual mandate — the federal rule, in the Affordable Care Act, that requires people to have health insurance or pay a fine. The politics of scrapping the mandate have long been tempting. Many people don’t like being required to buy anything.

But health economists believe the mandate to be important. Without it, more people will choose to risk not having insurance. Others won’t even realize they are eligible for Medicaid or federally subsidized insurance plans, because they won’t be nudged to look for a plan.

The net result will be fewer middle- and low-income people signing up for insurance. Because fewer of them will sign up, the federal government will spend less money on their medical care. And because the federal government will spend less on them, it will have more money to spend on — you guessed it — tax cuts for the wealthy.

For more on the mandate, I recommend this piece by Margot Sanger-Katz of The Times and another by Dylan Scott and Sarah Kliff of Vox. They explain an additional problem with scrapping the mandate: Insurance premiums will rise, because the pool of the insured will be sicker.

Some Democrats believe the Republican leaders have made a tactical mistake, because progressive activists are more passionate about health care than tax policy. “This is turning a tax bill into a health care bill,” Ron Wyden, the Oregon Democrat, said yesterday. “The Bat signal has gone out to the Obamacare activists,” tweeted Democratic strategist Brian Fallon.

Related, in a conversation about the future of conservatism, Henry Olsen tells Ross Douthat: “The G.O.P. remains intellectually wedded to dying dogma. The congressional party really wants to do nothing other than cut taxes for businesspeople and the top bracket based on what can only be called religious devotion to supply-side theory.”

And Sahil Kapur of Bloomberg notes that the new version of the Senate tax bill, released last night, has yet more bad news for the non-wealthy. “Big deal: New Senate GOP tax bill sunsets middle-class tax cuts—rate reductions, standard deduction increase, child tax credit hike,” he writes. “However, the corporate tax cut from 35% to 20% is permanent.”

In The Times. Jeff Sessions spent much of a congressional hearing yesterday “as he has all the others he’s sat through this year — by not recalling things that one would think most people would,” argues The Times’s editorial board. Besides contacts with and conversations about Russian officials during the 2016 campaign, the editorial asks, “What else are you forgetting, Mr. Attorney General?”

America tied for first. I recommend a column by David Ignatius in today’s Washington Post, about President Trump’s Asia trip. “Trump’s trip may indeed prove to be historic, but probably not in the way he intends,” Ignatius writes. “It may signal a U.S. accommodation to rising Chinese power, plus a desire to mend fences with a belligerent Russia — with few evident security gains for the United States.”

Uwe Reinhardt. One of the giants of health economics, Uwe Reinhardt, died yesterday. You can read some of his many Times pieces over the years. At the Incidental Economist blog, Austin Frakt remembered Reinhardt with a post titled, “Giant, mensch, knife twister.”