How bad is it? Dude:
ACA architect Jonathan Gruber on the AHCA: "This is no longer an Obamacare repeal bill. That's good." https://t.co/vdwP2Ad3Sj
— Lachlan Markay (@lachlan) June 22, 2017
McConnell’s team put out a fact sheet this morning detailing their major changes to ObamaCare — or non-changes, I should say. Yeah, the mandate’s gone and there’s a massive (delayed) rollback of Medicaid, but the premium subsidies are still there, they’re still pegged to income, and there’s a bunch of new money ($25 billion) appropriated to stabilize ObamaCare’s rickety exchanges over the next four years. There’s also money set aside for two years of cost-sharing subsidies, which the House GOP has spent three years fighting in court on grounds that they never appropriated those funds in the first place. In other words, in at least one respect, the Senate bill is … an expansion of ObamaCare.
All in all, the bill’s a jumble of provisions designed to shore up the current law and, bizarrely, to make it less sustainable. With the mandate gone, many O-Care taxes repealed, and the cost-sharing subsidies marked for phase-out in 2019, much of the revenue needed to keep the exchanges buoyant is set to disappear over the next few years. How will insurers manage when it does? The man to read on this, as usual, is Reason’s Peter Suderman, whose critique of the bill is exhaustive and devastating. A taste:
Like the House plan, the Senate plan retains Obamacare’s major insurance regulations, including the requirement to cover pre-existing conditions, at the federal level. Unlike the House plan, it does not allow states to apply for a waiver to opt out of those rules. It also eliminates Obamacare’s health insurance mandate.
Every state that has attempted this combination of coverage regulations without a mandate has seen a swift meltdown in the individual market. There is every reason to expect that the same would happen under the Senate plan, especially since Obamacare’s exchanges were struggling with a too-small, too-sick enrollee pool even with the mandate in place…
The House version of the AHCA provided subsidies based on age. But the Senate version relies on income-based subsidies, just like Obamacare—but a little less generous. Currently, Obamacare provides subsidies for individual up to 400 percent of the poverty line, or about $98,000 a year for a family of four. Starting in 2020, the Senate bill would ratchet that back to 350 percent of the poverty line, or about $86,000 for the same family. In addition, reports indicate that the subsidies are pegged to lower-cost plans, which means the subsidies will be smaller, and will likely lead to more plans with high deductibles.
Taken on its own terms, this scheme undercuts the GOP’s complaints that Obamacare hurts the middle class.
The problem in one line: “[The bill] works from the assumption that the only way to make expensive health insurance cheaper is to subsidize it through the federal government,” precisely the animating philosophy of ObamaCare. Even the Medicaid rollback is delayed until 2020, Suderman notes, which means in practice that unless Trump wins reelection it may never happen. With the notable exception of 2012, Republicans have won election after election over the past seven years on the promise that they’d jettison ObamaCare for a free-market health insurance system. And then, handed total control of government, the best they could do was tweak what Obama handed them. Even Jon Gruber can’t get too upset about the final product. How could he? It’s basically his.
Is it dead on arrival?
Per solid source: at least 3 GOP sens (perhaps more) plan to announce public opposition to McConnell health bill later today. Developing
— Chuck Todd (@chucktodd) June 22, 2017
Eh, that’s probably just a ploy for leverage as the bill gets hastily overhauled this week en route to a vote next Thursday. We’ll see whether this three-senator nucleus comes from the right (Cruz, Lee, Paul) or the center (Collins, Murkowski, Heller) and whether in fact it’s just three — which would be enough to tank the bill if they hold firm — or a larger group, which would make McConnell’s problem grave. I don’t know how you square the circle on Medicaid between the right-wingers and the moderates. But then, I also don’t know how you square this bill with this promise from 2015:
I was the first & only potential GOP candidate to state there will be no cuts to Social Security, Medicare & Medicaid. Huckabee copied me.
— Donald J. Trump (@realDonaldTrump) May 7, 2015
Exit question: Could it be that McConnell deliberately “underwrote” the bill to make it easier to get buy-ins from reluctant senators this week? This is a smart read on why certain key demands from the two sides of the caucus aren’t included — yet.
— Derek Thompson (@DKThomp) June 22, 2017
McConnell’s a very clever strategist. The more he can hand “victories” to key holdouts via this week’s amendment process, the more likely it is that they’ll sign on.