HHS chief Tom Price: No one will be worse off financially under the GOP's health-care bill

What would possess a smart, sane, sober bureaucrat like Price to say something like this? Have we learned nothing from the Democrats’ disastrous habit of overpromising on health care?

This is a 2018 attack ad on a silver platter:

“I firmly believe that nobody will be worse off financially in the process that we’re going through,” Price insisted when pressed by NBC’s Chuck Todd during Sunday’s “Meet The Press.” “They’ll have choices that they can select the kind of coverage that they want for themselves and for their family, not the government forces them to buy.”

“There’s cost that needs to come down, and we believe we’re going to be able to do that through this system,” he added. “There’s coverage that’s going to go up.”

Even if not a single person lost coverage under the new bill, there are people who’ll take an immediate financial hit due to the way the bill’s tax-credit scheme is structured. For instance, if you’re just above the income threshold for qualifying for Medicaid, you’ve got a problem:

The critical mistake of the AHCA is its insistence on flat, non-means-tested tax credits. The flat credit will price many poor and vulnerable people out of the health insurance market.

As I wrote last month, the AHCA creates a steep benefit cliff between those on Medicaid (subsidizing approximately $6,000 per patient per year), and those just above the poverty line who will get tax credits of about $3,000. People just below poverty will be strongly disincentivized to make more money, effectively trapping them in poverty.

You’re also about to take a hit if you’re just below the age limit for qualifying for Medicare and still relying on private insurance. According to one study, Americans ages 55 to 64 would face the equivalent on average of $6,971 in higher health-care costs in 2020 because the GOP’s tax-credit framework is less lavish than the ObamaCare subsidies scheme. Key parts of those two groups, the working poor and older Americans, are pillars of Trump’s base. Can the GOP rely on them to deliver in 2018 if this passes?

CBO’s verdict is expected sometime this week, possibly even tomorrow. Republicans are working overtime to preemptively discredit the agency, but the CBO score will be front-page news in every paper in the country — and it’ll almost certainly be harsh for the GOP, which will make Price’s soundbite here even more painful. Breitbart, which has turned against the bill (while framing it as Paul Ryan’s handiwork, never mind that Trump is threatening to help primary anyone who doesn’t vote for it), is touting a Brookings study today suggesting that up to 15 million people will lose their coverage under the Republican plan. CBO’s numbers probably won’t be far from that estimate. Price’s response, I assume, would be to note that some people will lose coverage because they don’t want coverage — the mandate is going away — while others who want it may lose coverage temporarily but will quickly pick up new plans, which will be cheaper than what they have now thanks to greater options in the GOP’s new system. But it’s not that simple. Megan McArdle:

Just as Lite foods failed to keep Americans from getting fatter, the GOP version of health-care reform doesn’t fix the huge problems that currently exist in the individual market, notably the fact that thanks to Obamacare, in a few years, we might not even have an individual market. (See “community rating” and “guaranteed issue,” and thus the hated mandate, which whacks you with a tax penalty if you don’t buy insurance.)

The incentives intended to keep the individual market sustainable were already failing, and the Republican plan weakens them still further. Even the 30 percent premium penalty lasts only 12 months. Not only is this an obviously insufficient penalty; it actually disincentivizes healthy people who have let their coverage lapse from getting back into the market, even as it makes it relatively cheap to do so if you are sick.

If Republicans manage to pass this, they will richly deserve it when voters blame them for the resulting havoc it will wreak in the individual market.

The GOP bill makes it easier for healthy people who don’t want to pay for insurance to drop it, but that means less revenue for insurers with which to cover the sick. That might be okay if the bill also repealed a swath of the regulations that make coverage more expensive for those insurers to provide, but it doesn’t; there isn’t much the party can do in the Senate short of finding 60 votes to eliminate the non-budgetary parts of ObamaCare. Potential result: The bill could inadvertently accelerate the death spiral in insurance markets by letting the young and healthy drop out, in which case what’ll happen to the price of plans for everyone else in the pool? Are they really likely to get cheaper, as Price suggests?

Most Republicans selling the bill this week have been careful not to overpromise. Not so here with Price. I think, charitably, that maybe he meant to say that Americans in the aggregate won’t be worse off financially in the new system, as some people who have held out on buying an ObamaCare plan thus far will be enticed into buying a cheaper TrumpCare plan, replacing those who end up losing their coverage. That is to say, TrumpCare will have its winners and losers too, and hopefully there’ll be more of the former than the latter. But even if there are, a system that adds upscale Americans to the winners list while making losers of the downscale is a tough sell, especially with soundbites like this floating around. The question in 2018 and 2020 is whether there’ll be more winners willing to vote GOP than losers willing to vote against them.