The hotly-anticipated Senate Republican health care bill came out on Thursday morning. The airwaves quickly filled up with predictable talking points from both sides. But once the dust settles, it will emerge that the Senate bill will have far-reaching effects on American health care: for the better. 
 
 Substantial improvements to the House bill 
 
 In March, when House Republicans published their bill to replace Obamacare—the American Health Care Act—I described it in Forbes this way: “GOP’s Obamacare Replacement Will Make Coverage Unaffordable For Millions—Otherwise, It’s Great.” I meant it. There were great things about the House bill, in particular its far-reaching reforms of the Medicaid program. 
 
 But Paul Ryan’s bill contained a fatal flaw. Its flat tax credits, which provided identical assistance to the poor and the wealthy, would price millions of near-elderly low-income workers out of the insurance market and trap millions more in poverty. 
 
 FREOPP.org 
 
 Fortunately, buried in the House bill was a way out of the morass. Section 202 of the bill contains a transitional schedule of tax credits that was meant to serve as a bridge between the old Obamacare system, ending in 2017, and the new Paul Ryan system, beginning in 2020. 
 
 It turns out that if you simply kept that bridge in force, and tossed overboard the Paul Ryan flat tax credit, you’d solve all of these problems with the House bill. By making that change, the near-elderly working poor would be able to afford coverage, and the poverty trap would be eliminated. 
 
 FREOPP.org 
 
 And that’s precisely what the Senate bill did! Section 102 of the Senate bill—the Better Care Reconciliation Act of 2017—closely mirrors Section 202 of the House bill, with age- and means-tested tax credits up to 350 percent of the Federal Poverty Level. 
 
 Making this change not only solves the problems I described above. It also makes it easier to reform the Medicaid program. 
 
 The centerpiece of the @FREOPP plan (https://t.co/jy8EM7Gbtf)—means-tested, age-adjusted tax credits—is in the Senate bill. This is huge. — Avik Roy (@Avik) June 22, 2017 
 
 Real Medicaid reforms 
 
 The Senate bill includes and refines the best part of the House bill: its reforms of Medicaid, the dysfunctional government-run health care program for the poor whose enrollees have no better health outcomes than the uninsured. 
 
 Because the Senate bill’s tax credits are robustly means-tested and available to those below the poverty line, the bill is able to repeal Obamacare’s Medicaid expansion while offering higher-quality coverage to individuals who signed up for Medicaid under the expansion. 
 
 The reason that Medicaid’s health outcomes are so poor is because the outdated 1965 Medicaid law places a laundry list of constraints on states’ ability to manage their Medicaid programs. As a result, the main tool states have to keep Medicaid costs under control is to pay doctors and hospitals less and less each year for the same care. Hence, many doctors don’t take Medicaid, and Medicaid enrollees struggle to gain access to care. 
 
 The Better Care Reconciliation Act of 2017 addresses these problems in several ways. 
 
 First, the bill repeals Obamacare’s Medicaid expansion, and replaces it with tax credits so that low-income Americans can buy the coverage of their choice at an affordable price. 
 
 Second, the bill gives states a new set of tools to make their Medicaid programs. For example, under Obamacare, states are only allowed to check if someone is eligible for Medicaid once a year, even if that enrollee has moved to a different state, or becomes no longer eligible, or is no longer alive. Jonathan Ingram of the Foundation for Government Accountability, in a recent report, recommended allowing states to redetermine eligibility more frequently and thereby culling their rolls of ineligible individuals. 
 
 Third, the bill puts the legacy Medicaid program on a long-term per-capita cap tied to medical inflation through 2025, and conventional inflation (CPI-U) thereafter. This change is important, because Medicaid per-enrollee spending is growing at a slightly slower rate than Medical inflation; hence, making the program sustainable requires the use of CPI-U. The fiscal sustainability of Medicaid is essential to making sure that those who depend on the program can know it will be there for them in the future. 
 
 Innovation at the state level 
 
 A third area where the Senate bill does extremely well is in giving states the latitude to come up with new ways to serve their needy populations with better results and lower costs. 
 
 We’ve talked already about the new flexibility that states will have with their Medicaid programs. They’ll have even more flexibility to open up their private insurance markets to innovation and competition, through a new set of “Section 1332” waivers in which the validity of the waiver applications will be assumed by the federal government so long as the plan doesn’t increase federal spending. 
 
 Furthermore, the bill offers states around $100 billion in stability and innovation grants that states can use to shore up their insurance markets, by providing extra assistance to the needy or the sick. 
 
 The Senate must fix its individual mandate replacement 
 
 There’s one key flaw in the Senate bill. It had been originally reported that the bill would contain a six-month waiting period for those who did not sign up during open enrollment each winter. Such a waiting period is important to ensure that people don’t jump in and out of the insurance pool when they're sick or healthy, respectively. 
 
 But no such waiting period was included in the bill, reportedly because the Senate is still trying to work out how such a waiting period would work within Senate parliamentary rules. That will worsen the bill’s score from the Congressional Budget Office, which is already likely to claim that the bill will cover at least 18 million fewer Americans, due to the CBO’s belief that repealing the individual mandate will alone have that effect. 
 
 Addressing right-wing complaints 
 
 Some on the right are complaining that the Better Care Reconciliation Act doesn’t do enough to repeal Obamacare, echoing those on the left in 2010 who complained that Obamacare wasn’t a single-payer bill. 
 
 Full repeal was never going to be possible in a Senate where Republicans did not control 60 votes. And furthermore, we have learned that moderate Republicans in both the House and the Senate have no appetite to fully deregulate Obamacare at the federal level. 
 
 But any Republican conservative in the Senate who is thinking of voting “no” on this bill: how many times in your life will you have the opportunity to vote for a bill that fundamentally transforms two entitlement programs? How often will you get to vote for a bill that cuts spending by hundreds of billions of dollars? How often will you get a chance to make a difference for millions of your constituents who are struggling under the weight of rising premiums and exploding deductibles? 
 
 As Sen. John Cornyn (R., Tex.) put it on Thursday, “it’s time to put up or shut up.” 
 
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 FOLLOW @Avik on Twitter, Google+, and YouTube, and The Apothecary on Facebook. Or, sign up to receive a weekly e-mail digest of articles from The Apothecary. Read Transcending Obamacare, Avik’s plan to replace Obamacare, at FREOPP.org. 
 
 INVESTORS’ NOTE: The biggest publicly-traded health insurance companies include UnitedHealth (NYSE:UNH), Anthem (NYSE:ANTM), Aetna (NYSE:AET), Molina (NYSE:MOH), and Centene (NYSE:CNC). ||||| If Senate Majority Leader Mitch McConnell believes it when he says "Obamacare is collapsing under its own weight," he should not give it a lick of fresh paint but should tear it down and rebuild it. 
 
 His bill, crafted in back rooms by a handful of anonymous committee staffers, leaves in place Obamacare's basic infrastructure whiling tinkering with a few details and bailing out insurers. 
 
 The Better Care Reconciliation Act isn't a bill to reform healthcare. This is a bill to notionally repeal Obamacare while propping the insurance market up through the next election. It's an exercise in political box-checking and ass-covering. 
 
 Under the BCRA, which was first revealed to the public, including to senators, on Thursday, the healthcare system would operate roughly the same way it does under Obamacare, just with slightly looser regulations and slightly lower costs. The individual market would still be heavily regulated by Washington, with insurers limited in their ability to price plans according to risk. 
 
 The Republican bill would also preserve and expand subsidies for the insurance industry, which the GOP used to attack. A central feature of Obamacare was the premium support for middle-class people buying insurance on the individual market. The Senate bill preserves this. 
 
 "At a fundamental level," libertarian healthcare expert Peter Suderman argued aptly in Reason magazine, "the Senate plan accepts Obamacare's premises about the nature of health insurance and the individual market. It works from the assumption that the only way to make expensive health insurance cheaper is to subsidize it through the federal government." 
 
 Conservatives and libertarians believe there are other ways to make healthcare affordable. Market forces can exert downward pressure on the price of both insurance and healthcare. These forces were suppressed before 2010, and Obamacare didn't make things better. But this Senate bill doesn't do much either. 
 
 Republicans don't do anything to take away the privileges of employer-sponsored health insurance, even though that system dampens competition among insurers. And the bill doesn't empower consumers to buy insurance across state lines. 
 
 Nothing in this legislation reverses Obamacare's policy of pushing consolidation among physician practices and hospitals. The bill doesn't try to pick apart unneeded and costly regulation on the scope of practice. Nothing in the Better Care bill reduces prescription drug prices, which are kept high through government policy. 
 
 Instead of using market forces to lower prices, the GOP bill just subsidizes health insurance and health insurers. Just a few months ago, Republicans in Congress were suing former President Barack Obama for trying to funnel unappropriated money to insurers through an Obamacare program called Cost-Sharing Reductions, or CSRs. (In short, insurers waive the copays and deductibles for lower-income customers, and taxpayers cover the cost.) The Republican bill would pay back insurers for the Obama-era payments blocked by the GOP suit and would pay the CSR payments in future. This isn't repeal of Obamacare. This is codification of Obamacare. 
 
 One innovation by Republicans in this bill is a brand-new fund to subsidize insurers, a "stabilization fund" to the tune of $50 billion over the next four years. This is a straightforward bailout, intended to keep insurers from leaving the marketplace during the next three years — that is, through the next presidential election. 
 
 There's a reasonable argument for a stabilization fund that would smooth the path from Obamacare's broken exchanges to a new, workable system. But this bill doesn't head toward or build a workable system. It neither provides significant structural support to Obamacare's individual market nor tears down Obama's edifice and replaces it with something better. 
 
 If Republicans believe the bridge is collapsing, this bill suggests they're happy to let it crumble, as long as it stays standing until they can get across it. ||||| Senate Republicans released their draft bill to repeal and replace ObamaCare on Thursday, and Majority Leader Mitch McConnell is hoping for a vote next week. The binary choice now is between pushing past the media and Democratic flak to pass a historic achievement, or wilting under the pressure and ratifying the ObamaCare status quo. 
 
 The bill is an imperfect compromise between moderate and conservative Republicans, and it makes pains to accommodate different interests and the Americans, states and businesses that have adapted...
– President Obama hates it, but that sentiment about the Senate Republicans' plan to replace ObamaCare isn't quite unanimous. Here's a look at what editorials are saying: Wall Street Journal: It implores Republicans to get this passed and not wilt under pressure from the media and Democrats. The measure is an "imperfect compromise" but also a "major improvement over the US health-care status quo that will worsen if the bill fails," write the editors. "It’s not too much to say this is a defining moment for whether the GOP can ever reform runaway entitlements." New York Times: This isn't a health care bill, say the editors. "It is, plain and simple, a plan to cut taxes for the wealthy by destroying critical federal programs that help provide health care to tens of millions of people." The bill's creators now have to bargain with holdouts to get it into final form, but "no amount of tinkering around the edges" can save it. If passed, it will take a "devastating toll on millions of Americans." Washington Post: The bill "includes a range of mostly unwise and ungenerous changes to the nation’s health-care system, but it might, if enacted, end up as mostly a massive, unpaid-for tax cut for wealthy people and industries with pull on Capitol Hill," says the editorial. Ditching the individual mandate in particular would inject chaos into health insurance markets. Washington Examiner: The conservative paper opposes the bill for not going far enough to dismantle ObamaCare. "The Better Care Reconciliation Act isn't a bill to reform healthcare. This is a bill to notionally repeal Obamacare while propping the insurance market up through the next election. It's an exercise in political box-checking and ass-covering." Forbes: This isn't an editorial, but an op-ed by Avik Roy that argues the Senate bill will "transform" US health care for the better. For conservatives tempted to vote no, he asks: "How many times in your life will you have the opportunity to vote for a bill that fundamentally transforms two entitlement programs? How often will you get to vote for a bill that cuts spending by hundreds of billions of dollars? How often will you get a chance to make a difference for millions of your constituents who are struggling under the weight of rising premiums and exploding deductibles?"