Shifting dollars from poor to rich is a key part of the Senate health bill

The Affordable Care Act gave health insurance to millions of Americans by shifting resources from the wealthy to the poor and by moving oversight from states to the federal government. The Senate bill introduced Thursday pushes back forcefully on both dimensions.

The bill is aligned with long-held Republican values, advancing states’ rights and paring back growing entitlement programs, while freeing individuals from requirements that they have insurance and emphasizing personal responsibility. Obamacare raised taxes on high earners and the health care industry, and essentially redistributed that income — in the form of health insurance or insurance subsidies — to many of the groups that have fared poorly over the last few decades.

The draft Senate bill, called the Better Care Reconciliation Act, would jettison those taxes while reducing federal funding for the care of low-income Americans. The bill’s largest benefits go to the wealthiest Americans, who have the most comfortable health care arrangements, and its biggest losses fall to poorer Americans who rely on government support. The bill preserves many of the structures of Obamacare, but rejects several of its central goals.

Under the bill, states would be able to apply for waivers that would let them eliminate consumer protection regulations, like rules that require all health plans to cover a basic package of benefits or that prevent insurance plans from limiting how much care they will cover in a given year.

States could get rid of the online marketplaces that help consumers compare similar health plans, and make a variety of other changes to the health insurance system. The standards for approval are quite permissive. Not every state would choose to eliminate such rules, of course. But several might.

“You can eliminate all those financial protections,” said IHPI member Nicholas Bagley, a law professor at the University of Michigan. “That would be huge.”

Americans with pre-existing conditions would continue to enjoy protection from discrimination: In contrast with the House health bill, insurers would not be allowed to charge higher prices to customers with a history of illness, even in states that wish to loosen insurance regulations.