Nothing says “reform” like having hardly anything change at all, right? The CBO returned a preliminary score on the latest Senate attempt to address the ObamaCare crisis, proposed by Lamar Alexander and Patty Murray to “stabilize” ObamaCare. The CBO found that it saves less than $4 billion over ten years, does nothing for premiums, nothing for coverage, and, well … nothing much at all except restore the cost-savings reduction subsidies to insurers:
A bipartisan bill to stabilize Obamacare would cut the federal deficit by $3.8 billion but wouldn’t do much to change health insurance premiums for 2018, according to a new analysis by the Congressional Budget Office. It would not substantially change the number of people who are covered. …
CBO said Wednesday the savings calculated over a decade would stem in part from letting states offer so-called copper plans — or lower-cost policies that appeal to healthier enrollees in the Obamacare markets. Those plans would attract younger people into the market starting in 2019, the agency projected, prompting insurers to slightly lower their premiums over the long term and save the government a little more than $1 billion in subsidy funding over the next 10 years.
The federal government would also save money by funding Obamacare’s cost sharing subsidies for two years, preventing it from having to pay insurers more to cover separate subsidies tied to rising premiums. Those subsidies — the center of a court battle and ongoing partisan conflict — help cover medical bills for lower income enrollees. Trump recently cut them off, but Congress could resume them, either through legislation like the Alexander-Murray bill or through a big year-end spending bill.
Even the cost savings are more or less reliant on the status quo. Earlier this year, the CBO projected the costs of the CSR payments to reach $7 billion this year, and escalating to $16 billion in 2017. Congress has not appropriated funds for the program since 2014, but the Obama administration paid them anyway, as did the Trump administration until this month. The $3.8 billion in savings for Alexander-Murray results from CBO counting this money as already outgoing rather than as new spending. Given that the purpose of Alexander-Murray was to provide new funding for CSRs now that the White House has refused to spend money that Congress has not appropriated, that is a very, very questionable scoring decision.
Even if the CBO had scored it the other way, though, the difference between the status quo and Alexander-Murray would still be negligible. (There’s a good case to be made that eliminating CSRs would significantly increase subsidies on the premium side, too.) The only concessions to reform in this bill barely qualify as such. Politico mentions the addition of “copper plans” to allow insurers to offer what used to be known as catastrophic or hospitalization coverage, but the conditions placed on the option means that few will actually choose it, the CBO concludes:
As under current law, subsidies would not be available for that coverage. In addition, the legislation would require that catastrophic plans be included as part of the single risk pool for pricing premiums in the nongroup market, alongside most other plans. (Under current regulations, catastrophic plans can be rated in a separate risk pool from other nongroup plans.) CBO and JCT estimate that this provision would not substantially change the total number of people with insurance through the nongroup market.
The key here is that the catastrophic coverage plans get priced out of the same risk pool as all other plans. Why? If an insurer set this up on their own, they would set up a separate risk pool in order to give the consumers the benefit of the lowered risk for everyone in this class. Instead, this is a transparent effort to keep the premiums higher while enticing younger and healthier people into the single risk pool in order to lower premiums for consumers with more comprehensive coverage.
And that’s precisely the result that CBO predicts, even though it won’t amount to much under these circumstances:
However, the agencies estimate that making catastrophic plans part of the single risk pool would slightly lower premiums for other nongroup plans, because the people who enroll in catastrophic plans tend to be healthier, on average, than other nongroup market enrollees. As a result of the slightly lower estimated premiums, CBO and JCT expect that federal costs for subsidies for insurance purchased through a marketplace established under the ACA would decline by about $1.1 billion over the 2019-2027 period.
In other words, it’s the same bad deal as before, only with a little more “copper” window dressing.
If there is a bipartisan desire to fund CSRs while Congress figures out how to dismantle ObamaCare, they should stick to that rather than pretend to be offering reform. This is nothing more than kicking the same can down the road, leaving all of the same contradictions in place that created a massive escalation of premiums, provider access crises, and a flight of insurers from the markets. It may not be worse than doing nothing at all, but as the CBO score indicates, it ain’t any better than that either.