The Senate version of the American Health Care Act institutes deeper Medicaid cuts than the House bill to help pay the cost of its expensive tax credits. The House version holds the program to the inflation rate plus one percent — which is historically lower than medical costs have risen, meaning that the program would have to curtail benefits for its beneficiaries, who tend to be poor and very sick. The Senate bill would cut growth down to the inflation rate, without the extra one percent.

The most important design feature is that the Senate bill retains all the tax cuts in the House bill. By eliminating nearly a trillion dollars in revenue, it necessarily creates a trillion dollars in cuts for coverage subsidies.


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