Week Ending October 13, 2017
President Trump Takes Single Most Damaging Step to Sabotage the Affordable Care Act
For months, insurance companies have warned that ending cost-sharing reduction payments under the Affordable Care Act (ACA) would be the single most damaging step that President Trump could take to undermine the ACA market and the health law. Nonetheless, late Thursday, the White House confirmed that President Trump would be ending these payments. Cost-sharing reduction payments are made each month to insurance companies that are required by law to reduce deductibles and copays for low-income families who purchase ACA plans. Ending these payments is expected to cause some insurance companies to decide not to offer ACA coverage in 2018, just as the enrollment period for 2018 is set to begin. Coverage may not be available for many who rely on the ACA. Others will see their insurance premiums go up 20 percent.
But this is not the only act of sabotage that the administration announced this week. Also on Thursday, President Trump signed an executive order (EO) directing federal agencies to rewrite key health care regulations to allow health insurance companies to offer plans that do not meet state patient protection regulations or state financial solvency laws. The EO would also allow the sale of plans that do not meet the consumer protections in the ACA, including rules that require plans to cover people with pre-existing conditions and that prohibit annual and lifetime limits on benefits. These changes will not occur immediately, but are designed to unravel the ACA’s core protections and further destabilize the market for those who do not have access to health insurance through their jobs.
These actions are the most recent in a series of steps taken by the Trump administration to cause the ACA market to collapse. Previously, the administration had reduced the open enrollment period to sign up for 2018 coverage by half; severely reduced the ability to enroll on Sundays when workers have time to enroll and when many houses of worship provide enrollment assistance; reduced advertising for ACA enrollment by 90 percent; and cut funding for nonprofit organizations who help individuals sign up for coverage.
Unable to win enactment of legislation to repeal the ACA, President Trump is using his executive authority to dismantle the law and threaten the health coverage of 9 million people who obtain health insurance through the ACA market. While Sens. Lamar Alexander (R-TN) and Patty Murray (D-WA) have been working on legislation to ensure that cost-sharing reduction payments continue, it is not clear that Republican leaders in the House or Senate would move legislation forward.
U.S. House Approves Disaster Relief Package for Texas, Florida, Puerto Rico – More Federal Funding & Assistance Needed
On Thursday, the House voted 353 to 69 to approve a $36-billion emergency package of federal funding to provide disaster relief, recovery, and rebuilding for residents affected by hurricanes in Texas, Florida, Puerto Rico, and by wildfires in western states. The package includes $4.9 billion in loans vitally needed to overcome the Commonwealth of Puerto Rico’s short-term liquidity crisis, and to ensure Puerto Rico has money needed to provide vital public services, fund pensions, and pay salaries to public sector workers. These workers include AFSCME members who are involved in disaster relief efforts.
While this package is a start, it is inadequate for the dire needs in Puerto Rico. AFSCME continues to advocate for more federal aid, including funding for Puerto Rico’s Medicaid program.
The Senate is expected to vote next week on this specific package in order to enact this relief as soon as possible and deliver it to those in need. Nonetheless, key congressional leaders and members of Congress from affected areas have vowed to return to this issue to ensure the needs of their communities are met.
White House Releases List of Demands for DREAM Act Negotiation
The White House sent Congress a list of demands as a condition of support for legislation to protect “Dreamers” from deportation, or many immigrants who were brought to the U.S. as children. Democratic Leaders in Congress instantly declared those demands “non-starters.” They include major changes to current immigration law as well as funds to build a wall along the Mexico border. Many consider the demands a poison-pill tactic to kill efforts to protect Dreamers.
Congressional GOP leaders remain quiet on the possibility of a vote on protections for Dreamers. AFSCME supports immediate passage of the DREAM Act, which would provide protection from deportation and a clear path to citizenship.
Senate Budget Vote Likely Next Week
Senate Republican leaders plan to hold a vote on a budget resolution next week. Like the budget resolution recently passed by the House, the Senate budget outlines drastic cuts in spending in order to fund tax cuts for the wealthy and for corporations. It includes procedures that would allow tax cut and spending cut legislation to be pushed through the Senate under expedited procedures that limit the ability of Democrats and moderate Republicans to influence the legislation.
The Senate budget cuts federal spending deeply by $5 trillion over 10 years with cuts of at least $473 billion to Medicare, $1 trillion to Medicaid, and $800 billion to non-defense discretionary needs such as education, infrastructure and law enforcement. These record-setting, deep cuts bring federal investment in public services to its lowest level in decades, adjusted for inflation. All of these cuts are proposed in order to pay for trillions in tax cuts that overwhelmingly benefit the rich and corporations.
The Republican leadership’s tax plan was developed with the White House and would grant large tax breaks to millionaires and reduce taxes paid by large, profitable corporations. The plan loses $2.4 trillion in federal revenue over 10 years. These tax cuts are not paid for by closing tax loopholes or limiting deductions, but instead add to the deficit. Highlights of the plan include a $249-billion giveaway to the richest 5,500 estates each year by repealing the federal estate tax, which currently applies only to estates exceeding $11 million per couple. The plan also reduces the maximum tax rate for corporations from 35 percent to 20 percent and repeals the alternative minimum tax, which ensures that the wealthiest Americans who use tax loopholes pay at least some federal income tax. The tax cut plan would lower tax rates on the business income of many entities that are described as small businesses but are frequently very large. Multinational corporations with profits stashed offshore could get as much as a $600-billion tax cut from new breaks.
Some middle-class families would actually see a tax hike under the GOP plan. For example, the plan repeals the deduction for state and local government taxes paid by individuals. This deduction not only benefits many middle-class families, but helps state and local governments maintain their tax revenues for public services.
If the Senate approves its budget, House and Senate leaders will need to reconcile differences in their budgets and vote on a final, compromise budget.
Social Security Benefits to Increase by 2 Percent in 2018
On Friday, the Social Security Administration announced a 2 percent cost-of-living-adjustment in Social Security benefits for 2018. For many retirees and people with disabilities, Social Security benefits are their only source of income. For them, the increased living costs, especially for prescription drugs and other health care services, are a challenge. While this COLA is welcome, AFSCME continues to urge Congress to boost and expand Social Security benefits, including an improved COLA that better reflects the actual living costs of beneficiaries.
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