By now, it’s well known that the Senate Trumpcare plan would force 22 million people to go without health insurance. That alone should be enough for Senators to reject this cruel proposal. But, that’s not all. The plan would also stuff the pockets of the health insurance industry to a tune of over $145 billion. The Republican plan is simply a way to rob Medicaid to boost already astronomical profits for their corporate donors.

All this week, Senate Majority Leader Mitch McConnell has reportedly been trying to “revamp” the Senate Trumpcare plan—the Better Care Reconciliation Act (BCRA)—to appease both conservative and moderate republicans as well as big donors. But the only way to maintain the billions of dollars in tax cuts and giveaways to insurance companies and the super-rich is to keep Medicaid on the chopping block.

While the Congressional Budget Office (CBO) reports a 26% cut to Medicaid by 2026, totaling $772 billion, the cuts would go much deeper: by 2036, Medicaid would be cut 35% because of the bill’s imposed caps on federal funding and the artificially tightfisted way in which the bill would calculate the Medicaid growth rate.

The federal savings from abandoning Medicaid would pay for the $541 billion in government losses from tax cuts for the wealthy. The bulk of these tax cuts would go to the top 1% of Americans.

Industry related tax cuts and giveaways in the Senate’s bill, however, stand out for their direct ties to GOP donors:


McConnell and fellow Republicans appear to be demonstrating their patronage to their donors in the health industry; insurance, pharmaceutical, and medical device companies will be among the few benefactors of the Senate’s “healthcare” bill. Notably, 4 of the top 10 contributors to McConnell are associated with healthcare and insurance.

The GOP plans to eliminate Obama-era checks on insurance executives that limit corporate tax deductions for executive pay, an effort that aimed to curb soaring salaries for insurance executives. Corporate tax deductions allow companies to reduce their tax responsibilities.

By limiting the amount of deductions, the Affordable Care Act (ACA) redirected money from corporate pockets to help fund health coverage for low- and middle-income individuals. Under the ACA, insurance companies are only allowed to deduct $500k for each executive, including stock options and bonuses; before, tax deductions often reached over $1 million per executive, not including stock options and other forms of compensation. In 2014, the 10 biggest insurance companies paid their top 57 executives upwards of $300 million. Once in place, the ACA rule only permitted 27% in deductions, instead of 96%, accumulating $72 million in government revenue, equivalent to providing health coverage for hundreds of thousands of more people. Yet, both the House and Senate bills reverse this rule, encouraging insurance companies to pay their CEOs even more, largely at the expense of Medicaid beneficiaries.

Not only would insurance executives – like the CEO of Kindred Healthcare, a top McConnell donor – stand to directly benefit from McConnell’s payout, but other provisions of the bill would give insurance companies an additional $145 billion, again at the expense of Medicaid, according to the Joint Committee on Taxation. The 13 Senate Republicans crafting the bill in secret (McConnell, Hatch, Alexander, Enzi, Thune, Gardner, Cotton, Cruz, Lee, Barasso, Cornyn, Portman, and Toomey) share campaign patronage with donors like Blue Cross/Blue Shield, Metlife, Fresenius Medical Care, and the Blackstone Group.

Insurance companies would not only receive tax breaks, but they would be the sole beneficiary of a provision in the Senate Trumpcare plan that would repeal the ACA’s minimum Medical Loss Ratio requirement, also known as the 80/20 rule. Under the ACA, for every dollar that an insurance company receives in healthcare premiums, the company has to spend at least 80 cents on providing healthcare to enrollees. Companies can take only 20 cents of consumer dollars for administrative costs or company profits. Insurers who do not meet the 80/20 target have to give back a portion of the premiums to consumers. More than $2.4 billion in rebates were paid to consumers between 2011, when the law went into effect, and 2014. In 2014, alone, 3.7 million families received a rebate.

The BCRA would eliminate the 80/20 rule and allow each state to set its own standards. That means that insurance companies will be able to pocket more of the money paid by consumers, giving an incentive to raise premiums. That money will not go to healthcare but will go to improving multi-million dollar corporations’ bottom lines.

Pharmaceutical companies will also see bigger returns, nearing $26 billion within the next decade from McConnell’s proposal. Major drug makers like Pfizer, Amgen, Astrazeneca, Gilead Sciences, and Cardinal Health also back many of the bill’s craftsmen.

Lobbying groups with clients that include Aetna and Pfizer have already begun PACs funding the 2018 congressional races for Members of Congress like Dean Heller, the Nevada Republican senator wielding a lot of power in determining the future of healthcare in the United States.

These tax cuts will take money and life-saving care from those who need it most to directly benefit the big-money campaign donors the Republican Party caters to instead of the constituents they were elected to represent. And, in the process of giving their donors tax cuts, people will die.



Written with contribution from Amanda Gavcovich.

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