September 20th, 2017

The latest GOP effort to repeal Obamacare

It’s not easy to evaluate each new Obamacare repeal bill as it comes down the pike, for two simple reasons.

The first is that these sorts of bills are inherently complex, and unless we’re in the health care insurance policy business we don’t have the time to read them or the math skills to analyze what their real effects might be. So we (that includes me) tend to leave the evaluation to the “experts.”

The second is, of course, that the “experts” (that is, pundits and politicians and even people in the health care insurance policy field who write about or lecture about such things) are mostly not objective about the topic. Politics and bias is huge here.

So when I read that there’s a new Obamacare repeal effort, I feel a sense of weary deja vu and here-we-go-again. When I look at a page such as today’s memeorandum, my weariness increases.

In the past I’ve spent many an hour trying to sort through all the hype and propaganda, and in the past I’ve found Avik Roy to be the most reliable and objective guide. So I turn to him once again, and I suggest you do so as well.

Roy’s article describes the provisions of the bill and their possible/probable effects, and my take-away from it is that the Graham-Cassidy bill is a case of leaving it to the states rather than the feds to decide what to do with the money the federal government will give it.

First, a little bit about Cassidy, from the article:

Sen. Cassidy is relatively new to Washington, but his star has been rising for some time. Cassidy, an M.D. who specializes in liver diseases like hepatitis, was first elected to Congress in 2008. I first got to know him in 2011, when he emerged as Congress’ leading critic of Medicaid’s poor health outcomes, and as one of the first Republicans to embrace Bill Clinton’s approach to Medicaid reform, called “per-capita caps.”

In 2014, Cassidy ran for the U.S. Senate against incumbent Mary Landrieu, and won in large part because of her vote in favor of Obamacare. Today, Cassidy serves on both of the key health care committees in the Senate…

Now we have what the bill is basically about:

The [previous GOP bill] replaced Obamacare with a system of means-tested tax credits that individuals could use to shop for private coverage that fit their needs. By contrast, Graham-Cassidy gives block grants to states, which states could then use to design the health care system of their choice: left, right, or center.

That sounds very federalist: leave it to the states. If a place like Vermont wants to experiment with single-payer, that’s fine with me.

More:

Given the renewed enthusiasm on the left for the abolition of private health insurance through single-payer systems, there can be little doubt that this is the direction that blue states will take under Graham-Cassidy.

On the other hand, states could also use their block grant funds to create liberalized, lower-cost insurance markets for subsidy-eligible enrollees. Section 106 of the bill specifies that states would have the ability to seek waivers from many of Obamacare’s insurance regulations, including those that force insurers to overcharge the young and the healthy, and those forcing insurers to cover services that enrollees don’t want…

The bill would institute a per-capita allotment for the legacy Medicaid program that is quite similar to the one in the BCRA. This per-capita approach is essential to ensuring that Medicaid is fiscally sustainable in the future. Both bills allow states to institute work requirements for Medicaid.

Please read the whole thing.

It all seems to come down to how much federal regulation you want in terms of requirements, and how much freedom the states ought to have.

Roy’s article doesn’t talk about pre-existing conditions or high-risk pools. But plenty of other writers do, and those on the Democratic side frame the bill as likely to deprive those with pre-existing conditions of coverage or make their coverage unaffordable. Vox offers one of the fairer treatments of the subject:

The new bill has been championed by its sponsors, Sens. Bill Cassidy (R-LA) and Lindsey Graham (R-SC), as giving states more flexibility in how they run their health care systems. One of those flexibilities includes a waiver system that would let states opt out of many key Obamacare regulations.

Those waivers do have some guardrails. The bill says states cannot tether an individual’s premiums to “sex or membership in a protected class under the Constitution of the United States.”

Anything else — a cancer diagnosis, a history of breast cancer, a mild case of asthma — is fair game. In states that did pursue and receive these waivers, health plans would have full authority to charge sicker patients higher premiums to offset their costs.

Cassidy argues that his plan would still protect people with preexisting conditions. It requires that any waiver application must include a description of “how the state intends to maintain adequate and affordable health insurance coverage for individuals with preexisting conditions.”

“Knowing that states may want to experiment, we specify that in the waiver request they must have adequate and affordable coverage for those with preexisting conditions,” Cassidy said in a briefing I attended last Friday.

Outside experts, however, question how strong these protections actually are. For one thing, there is no definition in the bill of what counts as “affordable” coverage. This would largely be left up to future bureaucrats in Washington to decide.

So, there are built-in protections, but do we trust them? The conundrum with pre-existing conditions is that once you prohibit insurance companies from charging more for those who have them when they sign up, then you have to charge the rest of the population more. The money has to come from somewhere. What’s more, blanket coverage for pre-existing conditions with no penalty means that the well will tend to wait till they become sick to sign up, and that will tend to increase premiums in the entire system in order to sustain it.

Articles that discuss pre-existing conditions commonly ignore or distort a great many things about insurance and pre-existing conditions. One thing that’s usually ignored is that, even before Obamacare, there was quite a bit of coverage at the state level for pre-existing conditions (I have documented the situation in some depth in this post as well as this one, and I suggest you read them both). In general, there’s a lot of ignorance about health care insurance—including a lack of understanding of the fact that if you have had continuous coverage when you get sick, the issue of pre-existing conditions is moot unless you’ve committed fraud or drop your coverage and have to pick it up again after your illness.

I’m not at all sure this most recent bill will pass. But the rush to do so is connected with the process of reconciliation and the widely-reported September 30 deadline for passing the bill that way (see this for a critique of whether that deadline actually exists or not).

[NOTE: By the way, Jimmy Kimmel (I’m only mentioning him in this context because he’s been speaking out on the pre-existing condition situation re Obamacare and replacement bills) is one of the many people who has no idea how pre-existing conditions used to work in the insurance business.]

25 Responses to “The latest GOP effort to repeal Obamacare”

  1. Oldflyer Says:

    It seems to me based on first impressions that the biggest problem with the concept is portability. I am a Federalist in spirit; but, this is a very mobile society now, and so many issues cross state lines. It seems to me that if government is going to get into the health care business, it must insure some uniformity across the states. Otherwise, variations in state health care laws impose a de facto restriction on where people can choose to live. This is a little more fundamental than requiring a person to get a new driver’s license when relocating.

    The issue of pre-existing conditions is fraught. My granddaughter who will turn 26 next month, was just declared “cured” of leukemia after five years. Now, leaving her parent’s coverage, she must shop for her own insurance. When she approaches a carrier–her employer does not recognize the HMO that she now uses–would she be protected under the continuously covered provision? It is rhetorical in her case, because she will have made the move before Congress acts, if it ever does. But, her situation may be illustrative of the complexities.

  2. neo-neocon Says:

    Oldflyer:

    See this as well as this.

    Also see this:

    [Cassidy] also said it’s not true that states would be allowed to offer unaffordable plans that are out of reason for many people.

    “That’s actually not true, because under our bill … the coverage has to be ‘adequate and affordable,'” he said.

    When asked who would determine what is “adequate and affordable,” he said that decision would be made by the Secretary of Health and Human Services.

    “We think that if you say ‘adequate and affordable,’ a reasonable person would say it’s got to be about the same price,” he said.

    “It has to be approved by the secretary of HHS,” Cassidy added. “This is not left up to the insurance company.”

    He also said most people who argue the bill would allow companies to dramatically raise premiums are simply defending Obamacare from any change.

    “It’s possible that someone has a different definition of affordable,” he said. “But typically those people who have different definitions are trying to protect Obamacare, think it’s the only way to be, and therefore they attempt to discredit our plan.”

    Will they remain adequate and affordable? Did they remain so under Obamacare? Believe him or don’t believe him, but neither program can protect people from the realities of the costs of the health care marketplace.

  3. Geoffrey Britain Says:

    I’m not a fan of Rand Paul and though I too lack the expertise needed to evaluate the Graham/Cassidy Bill, Paul’s objections to it make sense to me: “Rand Paul: ‘Graham/Cassidy Bill Is Barely ObamaCare Lite’

    To me, the key objections Paul lists are,

    “Graham/Cassidy doesn’t repeal a single ObamaCare insurance regulation. All of the Title 1 rules, the Essential Health Benefit rules, all of them – they’re still in place here.

    “Graham/Cassidy won’t fix our health care problems, and it will become a permanent drain on the treasury — one that is already $20 trillion in debt, with a $700 billion deficit next year,” Paul continues. And that is unacceptable.

    I’m worried about what happens when premiums continue to go up double digits (and they will). I’m worried about what happens when the system continues its downward spiral, but this time it is “GOP/TrumpCare” that gets blamed. And they will.”

    On the other hand, Schumer is adamant that the bill must be defeated with backing from MoveOn.org, Planned Parenthood, the Center for American Progress Action Fund, AFL-CIO and other leftist advocacy groups.

    They claim that the Graham-Cassidy bill eliminates the Obamacare individual mandate that requires every American to purchase health insurance.

    That mandate is essential to single payer, so this may indeed be the best that’s achievable.

  4. Griffin Says:

    This issue is so frustrating. Philosophically I tend to agree with Paul and the more conservative legislators but at the same time it’s like they are still fighting the last war. A war they lost, sadly. Right now we need to just get what we can, unfortunately.

    It’s all just a matter of time until the next generation that loves single payer comes into power, anyway.

  5. Cornhead Says:

    I trust a Republican doctor from the South way before I would trust Rahm Emanuel’s brother the doctor.

    The fact that Lindsay Graham is a co-sponsor suggests to me that McCain might vote for it.

  6. neo-neocon Says:

    Cornhead:

    Apparently it has been designed to appeal to McCain.

  7. Cornhead Says:

    And when did a third rate comedian get a veto over important federal policy?

    Neo:

    As I guessed. McCain didn’t want to go out with that one big negative vote.

  8. Dave Says:

    people with existing conditions should take their bills to Jimmy Kimmel’s front door and have him pay for it. The solution is quite simple, instead of blowing their money on drugs ho and booze why can’t wealthy liberals just pay out of their pockets to help the unfortunate ones instead of making everyone do it.

  9. ColoComment Says:

    I would guess that to actually remove the provisions that Paul objects to would also remove the bill from the reconciliation method of passage.
    So, maybe to comply with the 50+1 reconciliation method, they’re targeting a “back door” process that would keep those provisions, but probably be very lenient with issuing waivers (by HHS agency procedure — all it needs is a pen?) to exactly those provisions that Paul objects to.
    …just a guess.
    Oh, and IIRC, my state, Colorado, had a taxpayer subsidized “high risk” pool for uninsurables & high-premium folks. I don’t recall hearing complaints re: same.

  10. parker Says:

    When you have to appeal to McCain you know it will be ACA lite. Even where single payer, aka Big Brother, prevails, those who can afford it have supplimentary private insurance. Insurance is an old business that covered things like shipping loses… medical expenses exploded with the advent of ‘health insurance’.

    Shipping, flood, crop, tornado, hurican, car, and house insurance is fine by me. But medical care has been expense ever since individuals stopped paying out of pocket. The medical system loves insurance because it can charge beyond what the average individual can afford out of pocket.

  11. neo-neocon Says:

    ColoComment:

    If you follow those links I gave, it’s the case that most states had high-risk pools that were subsidized depending on need. I was in such a high-risk pool for a while. Most of the time, the situation only applied to people who needed individual insurance rather than group and who had risk factors. In my case (and this is very typical) I had risk factors and was self-employed, which meant that underwriting could be applied and my premiums went through the roof (something like 12K or 13K a year for a 10K—or was it 15K—deductible). In other words, this was extremely expensive catastrophic insurance. So the state offered the high-risk pool to people like me, which meant that I had several choices, but I chose a 10K deductible and paid about 5K a year. If I had been eligible, I could have gotten a subsidy for that, but I didn’t qualify. It was still quite high but it was better than nothing, and I felt the need for catastrophic insurance and so that’s what I got.

    Many many states had programs like that. Other states were “guaranteed issue” states, which is sort of like Obamacare in that no one could be denied even with a pre-existing condition. You can read more about the rules on a state-by-state basis here. The situation was widely misrepresented (that is, lied about) in the media prior to the passage of Obamacare and it’s lied about today.

  12. blert Says:

    Excuse me, I’ve read that this bill is already dying.

    Zero Democrat support.

    And there are crippling fissures within the GOP.

    I suspect that 0-care is going to have to be salami’d back.

    And that a Big Part of its repeal will occur by raw economics.

    No matter how many times I post it: no-one addresses the fact that NOTHING in any of these bills addresses COSTS.

    They don’t make ANY provision for more talent supply. Not one bit.

    We’re not even graduating doctors in tempo with our population growth — and it’s an aging population.

    We’re still ‘getting by’ — by importing// brain draining the Third World.

    Which is a crime.

  13. neo-neocon Says:

    blert:

    Of course they don’t address cost. I think that’s understood. If they directly and forcefully addressed cost, Americans wouldn’t stand for how many people would experience hardship.

    I think the idea, though, is that states have more cost constraints than the federal government and would be more inclined than the federal government to try to tailor their rules to limit costs.

    I don’t know whether the bill will pass, but it doesn’t need a single Democrat to pass. It just needs nearly all the Republicans. I don’t think they ever expected to get a single Democratic vote.

  14. TommyJay Says:

    To me, the key thing to Obamacare repeals or quasi repeals is whether it defends an important constitutional issue.

    One of the darkest days of my life, politically speaking, was the day I woke up and heard the news that the Chief Justice John Roberts had switched his decision and decided that Obamacare WAS constitutional so long as he unconstitutionally rewrote the law to redefine the individual mandate penalty as a tax.

    The first article I had read on Graham-Cassidy a few days ago, suggested that the individual mandate was intact (because John Kasich wanted to retain it). Commenter Geoffrey B says it kills it. The Hill, says nothing about it on its front web page. Town Hall and Nat. Rev. (uhg) says it kills it. So I guess Geoffrey is correct?

    It seems to me that everyone is busy tapping at their calculator trying to see how the infinite variations impact their own personal bottom line. But to my eye, if the individual mandate, as re-conceived by John Roberts, stays intact for a couple decades, then Katy Bar The Door.

    If the gov. of California wants to force CA citizens to worship the redwoods for one week out of the year, or else pay a $10K penalty, um tax, it would NOT be unconstitutional any more. If some future president said that all households must have a loaded firearm, or else pay a $20K penalty/tax, it wouldn’t be unconstitutional.

    I could kvetch and wine some more, but I feel like no one else gets this stuff. A large part of the pickle we are in, is connected to the fact that the constitutional principles of “equal protection” and the “interstate commerce clause” have been completely perverted.

    I was shocked recently when I saw some of the original James Madison language on the interstate commerce clause. It was intended as a “negative and preventive provision.” It gave the feds the power to strip state regulation of commerce, not to enable the feds to add regulation of commerce. It is now routinely used by the feds to add regulation.

  15. neo-neocon Says:

    TommyJay:

    The federal individual mandate was dropped by Graham-Cassidy.

    Obamacare levies penalties on most Americans who don’t have health insurance and larger employers who don’t provide affordable coverage for their workers. The bill would eliminate the penalty, retroactive to 2016.

    So, no federal mandate. However, it is my understanding (although I can’t find anything that directly address this) that states could have a state mandate if they so wished. But there is nothing in the Constitution to prevent that.

  16. neo-neocon Says:

    TommyJay:

    You write “If the gov. of California wants to force CA citizens to worship the redwoods for one week out of the year, or else pay a $10K penalty, um tax, it would NOT be unconstitutional any more. ”

    I hate to break it to you, but yes, it would be unconstitutional because it would violate the separation of church and state, albeit at the state but not the federal level. So it would violate their First Amendment rights. It’s not only the feds who are not allowed to do but the states are not allowed to do it either, because the First Amendment has also been ruled to apply to the states.

  17. ColoComment Says:

    Yes, there really was little “wrong” with the health insurance/care situation pre-PPACA that couldn’t have been adjusted with a bit of tweaking.
    The best option IMHO was the HSA/High deductible policy option that was really beginning to take off when it was outlawed by O’care. Subsidize the HSA account for those who meet some defined standards. But otherwise, keep the sticky fingers of gov’t out of it & let consumers compete for insurance & services.

    And, if SCt can overturn Plessy v Ferguson, and expand Constitutional”rights” to those shadowed by penumbras, and call a penalty a tax in one part of a law and call it a penalty in another part of a law, then it maybe could some day overturn Wickard v. Filburn. Not likely, but wouldn’t it be GREAT? 🙂

  18. steve walsh Says:

    Tinkering at the margins with a healthy dose of kabuki theater.

    I’ll pay attention when they, Congress, actually do something.

  19. BrianE Says:

    I’m with Blert on this. No one is talking about how much health care entitlements cost.

    In fiscal year 2015, according to the CMS.gov (the Centers for Medicaid and Medicare spending) Medicare spending was $646 billion and Medicaid spending was $545 billion of which $201 billion was from state budgets.

    Private health insurance spending was $2.4 trillion and out of pocket spending was $338 billion for the total NHE (National Health Expenditures) spending of $3.2 trillion or $9,990 per person.

    I had read estimates that the federal deficit was expected to rise back to $1 trillion annually by 2020– though that figure might be lower due to increased economic growth in the economy.

    Leaving aside all the arguments why the government isn’t the best vehicle for making national healthcare decisions, no one is talking about how they are going to raise the revenue to pay the $800 billion deficit spending by government medical spending right now.

    Would some politician somewhere please explain how we’re going to pay for the services the government already provides (and please no waste, fraud and abuse– though there is plenty of that (especially waste) in government spending).

    The liberal argument for Medicare for all is by the magic hand of the government, they can take the $2.4 trillion dollars in spending from private health insurance and reduce spending by $700 billion dollars, all the while offering the same level of service.

    They say they’re going to do that in two ways, if I understand the argument. Reducing payments to healthcare providers (the power of monopoly) and stripping the administrative costs and profit that the healthcare insurance companies presently reap.

    Is that possible?

  20. BrianE Says:

    One advantage of block granting the ACA spending to the states is that states technically can’t run deficits. I think in practice they do run deficits by accounting gimmickry.

    As to the government running healthcare policy– in a sense they already do.

    I recently had an issue common to mature men. My PSA level went from 4 to 11, one year to the next. I asked for a second test to make sure that wasn’t an error and the doctor refused to authorize it, telling me that medicare wouldn’t pay for two tests that close together.
    I’m not on medicare but private company insurance– and he still resisted, though I finally browbeat him into authorizing it.

    I got the impression he would get a black mark on his record for that.

    Is it possible the government is already keeping track of what type of care doctors are dispensing?

  21. T Says:

    From over at Ann Althouse’s blog (posted @8:40 AM) an interesting aside:

    “So, striking a deal with the Democrats on the budget, President Trump — and the Democrats Pelosi and Schumer — opened up another chance for Republicans to repeal Obamacare. That’s striking.” [Thomas Kaplan]

    “Is Trump that crafty? Did Schumer and Pelosi fall into a trap? I’m inclined to answer those questions yes if only because the 2 NYT reporters — who I doubt would give Trump any extra credit — made me think about it that way.” [Ann Althouse]

  22. ErisGuy Says:

    sex or membership in a protected class under the Constitution of the United States

    Someday the United States will abolish its noble classes to become democratic.

  23. T Says:

    . . . and yet, again, today from Steven Hayward:

    ” . . . just about every time I think he’s [i.e., Trump] blundered or shown himself not up to the job, something changes my mind as the dust settles.”

    “And about his two recent semi-deals with Chuck and Nancy that I dumped all over a few days ago. Today those deals look rather different in their impact going forward.”

    The link:

    http://www.powerlineblog.com/archives/2017/09/why-trump-is-so-much-fun.php

    We tend to forget that Trump was initially educated not in “The Academy” but in military school and is undoubtedly familiar with the military history of diversion and feint attacks and how they can be successfully used.

    It has been a fascinating 8 months.

  24. Ymar Sakar Says:

    Ann Althouse, the prophetess that foresees all right.

    Didn’t somebody vote for Hussein that had some similarity in naming, let me check…

    http://althouse.blogspot.com/2016/01/why-i-quit-watching-debate-halfway.html

    Let’s see, Althouse, althouse… there we go.

    I did go on to vote for Obama. I voted for him before I voted against him (in 2012). Or… it’s more accurate to say: I voted against McCain before I voted against Obama. I’m just not that enthusiastic about political candidates.

    When you can’t vote your conscience, don’t vote. If you don’t have a conscience, just roll the coin. What’s the worse that can happen, the IRS blows up the Tea Party protests?

    T Says:
    September 21st, 2017 at 3:05 pm
    From over at Ann Althouse’s blog (posted @8:40 AM) an interesting aside:

    Might as well pay attention to Goldmansachs admin criticizing Cruz’s wife for being a Gold Man sachs employee in the past.

  25. Ymar Sakar Says:

    It’s all just a matter of time until the next generation that loves single payer comes into power, anyway.

    People will call them immature and ignore them for using Rocket Man.

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Previously a lifelong Democrat, born in New York and living in New England, surrounded by liberals on all sides, I've found myself slowly but surely leaving the fold and becoming that dread thing: a neocon.
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