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You are here: Home / Anderson On Health Insurance / A quick look at TrumpCare 1.0

A quick look at TrumpCare 1.0

by | 38 Comments

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I was thinking of doing a marathon line by line read of the House bill last night but I had to be on the soccer field an hour after it dropped so I was able to be spared.

Here is the Energy and Commerce chunk of the bill.  And here is the Ways and Means financing.  

The interesting thing on the Ways and Means is that they kept the Cadillac Tax.  They pushed it back from 2019 to 2025 but it is still there as a magic financing mechanism instead of anything else.

Here are the major points of the bill.

  • Legacy Medicaid would be per-capita block granted based on category of assistance spending for FY2016 as the baseline and adjusted at CPI-Medical.
  • Medicaid Expansion would be open through 2020 but then grandfathered.  If anyone loses Medicaid eligibility for more than a month, the federal enhanced match money disappears.
  • Non-Medicaid expansion states get a small amount of money thrown at them quickly
  • Planned Parenthood and legal access to abortion are kicked hard
  • 12/31/19 would be the end of the ACA Exchange as we know it (subsidies made skimpier in the mean time)
  • New plan would be age based tax credits
  • 30% 1 year non-continual enrollment penalty
  • Major tax cuts for high income

There are a lot of more pieces going on.  A minimum blocking coalition looks like it is formed in the Senate on Medicaid although Sen. Capito-Moore (R-WV) is a bit soft on that.

From a policy point of view, the big thing here is a massive clawback on Medicaid. There are serious work disincentives in 2020 (although that looks to be set up for a can kick given when the program expires and the election follows) as people who qualify for Medicaid solely on income will look at taking another couple of hours at work or losing their health insurance.  They’ll decline the hours.  We would also see the bundle of services tied into the bundle that could be afforded in 2016 so technological progress which is expensive (like sickle cell gene therapy) would never be affordable for state Medicaid programs.

If I was on the C-level of an insurer offering individual market coverage, I would look to run faster than I had thought.  The Republican bill gets rid of the individual mandate while throwing in some stabilizing funds for reinsurance but it would not be enough.  The market is unpredictable and that means fleeing is a much better option in my mind today than yesterday.

This bill would give flat, age based refundable tax credits to finance individual market purchases.  In some regions, they would be sufficient to buy Bronze plans straight up.  In most regions, they are grossly insufficient.  In Pittsburgh (zip code 15219), the least expensive Bronze for a 64 year old is $485/month. After the flat age based subsidy, it is $151/month with a $7,150 out of pocket maximum.  In Durham, NC (27708), the same individual sees a post-age based subsidy price of $646.  In Anchorage (zip code 99508), the least expensive Bronze after the $333/month subsidy would cost $1,317 per month.  These estimates are deliberately biased low as I am using the current 3:1 age band.  As part of the repeal bill, the age band would switch to 5:1 so 64 year olds would pay signficantly more.

Pittsburgh as a low cost market where the dominant exchange carrier (UPMC, my former employer) is losing money might be okay under this plan.  The current low cost Bronze plans would be effectively free for twenty somethings after the subsidy.  It might have a chance to build a healthy risk pool.  North Carolina and Alaska would death spiral in forty eight seconds or less.

Let’s get a CBO score.  That is the analytical advocacy target to push for.

Reader Interactions

38Comments

  2. 2.

    guachi

    My nose tells me this bill is a pile of poo.

    Also: LINE BY LINE, DAMMIT!!! I need something to club my right-wingers with on Facebook.

    “Both parties are now on record saying the government should give support to all Americans for their health insurance. But see how bad the Republican plan is?” And then I include a link to your post that they won’t actually read. But it’ll make me feel better.

  3. 3.

    Keith G

    As an ACA using, fifty-something who just got though a major (and for the time being, winning) fight with cancer, but still has one related surgery to get through…allow me to say, Fuck you, Paul Ryan.

    Seems like this plan will not get through, but in the meantime how much damage will be done to those of us who have been saved by ACA?

  6. 6.

    Lee

    From what I understand they are going to start voting on this before the CBO score is done.

    I certainly could be wrong.

  7. 7.

    chopper

    @guachi:

    Both parties are now on record saying the government should give support to all Americans for their health insurance

    obama won. hah!

  11. 11.

    gene108

    @Lee:

    I am sorry but the CBO score is worthless. No CBO score can properly account for the magic asterisks, details TBD later, and wishful thinking that is the heart and soul of so much of Paul Ryan and the Republican’s policy proposals.

  13. 13.

    Yarrow

    @guachi:
    A few details listed in this tweet thread. May help you find something to post. Keep scrolling down for more once you click through.

    True headline 1: the bill is basically a tax cut ($600 billion) funded by gutting Medicaid. 4— Andy Slavitt (@ASlavitt) March 7, 2017

  14. 14.

    Elizabelle

    Numbers. Numerals.

    Aren’t they some kind of Arabic system? Look — it’s Al Qaeda. ISIS! (Votes against healthcare, in secret.)

  15. 15.

    David Anderson

    @chopper: No, but confusion and dissension to our enemies.. At least half a dozen Republicans actually do give at least a fart if not a shit about federal spending levels. And then there are 35+ Republicans who sit in seats that are vulnerable to a Blue Wave who should shit bricks if the CBO score comes back and says there are 10-15-20 million Americans who will go uncovered with this bill.

    We either need 3 in the Senate or 24 in the House…

  16. 16.

    Yarrow

    Is everyone calling all their Representatives today? I haven’t yet, but it’s first thing on the list once I take care of morning responsibilities.

  19. 19.

    Another Scott

    Just for emphasis, Drum also says this bill would likely kill employer-provided insurance as well:

    Quoting Christopher Jacobs:

    Unlike Obamacare, the GOP plan doesn’t care how much money you make. A middle-aged, middle-class worker is eligible for a $3,000 tax credit no matter what. So now Acme can give you $10,000, you take home $7,000, and then receive a $3,000 tax credit. That’s enough for you to buy a policy without shelling out any of your own money. Under those circumstances, Acme might well decide to get out of the health care business and just give people extra money they can use to buy their own coverage.

    The Teabaggers are determined to break everything. There’s nothing “Conservative” about them – they don’t want to “Conserve” anything.

    Cheers,
    Scott.

  20. 20.

    Yarrow

    Also, when you’re calling your Reps today, they might not know how many people in their district have coverage under the ACA. This list from Indivisible lists how many people in each district. have coverage under the ACA. You can be armed with information!

  21. 21.

    Immanentize

    I am very interested in the CBO analysis because of the use of the reconciliation process in the Senate (majority vote, no filibuster). I don’t understand all the ins and outs, but I know that budget busting measures cannot employ the reconcilliation process. It is Wikipedia, but still:

    The Byrd Rule … was adopted in 1985 and amended in 1990. Its main effect has been to prohibit the use of reconciliation for provisions that would increase the deficit beyond 10 years after the reconciliation measure.

  22. 22.

    Kryptik

    @Thoroughly Pizzled:

    The party of life is willing to murder 20 million Americans to save America.

    But it’s ok because those that die clearly weren’t really American to begin with. We have no poor Americans or Americans who can’t afford health care, thus, if you couldn’t afford it and died from lack of health care access, you weren’t really ever American. QED.

  23. 23.

    Ohio Mom

    I’m especially impressed with the flat 30% penalty that goes straight into the health insurance company’s pocket if you go uninsured for a couple of months.

    It’s tyranny if you skip the mandate and have to pay more taxes but somehow freeing to send a donation to a corporation.

    I think of myself as having a good imagination but then something like this pops up, something I know I could never dream up, and I am humbled.

  24. 24.

    NorthLeft12

    I guess this is another example of how exceptional the US is. You don’t need [or want (apparently)] the same single payer socialized health care system that pretty much the rest of the world has or is striving for.

    The GOP will crawl under the lowest bar and hurt the greatest number of people possible just to deliver a large tax cut [gift] to the rich. That is really my take away from this……another transfer of wealth to the rich from the poor/middle class.

  26. 26.

    NorthLeft12

    @Kryptik:

    But it’s ok because those that die clearly weren’t real Americans to begin with.

    Sorry, I could not resist fixing this for you. As you mention Real Americans TM don’t get sick and die. They pull on their bootstraps and gut it out.

    I believe this same kind of logic was used in testing for witches.

  27. 27.

    phoebesmother

    David/Richard, info please? How does a tax credit work under this bill? Don’t you have to wait a year to get the refund in April or are insurance companies going to reduce your monthly premium by the pro-rated amount of your expected tax credit? Otherwise, aren’t you going to be forking out the cash monthly and then waiting a year to get it back? And how does it work under ACA (the subsidy) and then for the first year of Trump/Ryan care? And do people who now don’t have to file taxes for various reasons (income, disability, etc) have to start filing to get the tax credit and what if the freedum caucus wins and it’s not refundable. Just not informed about actual mechanisms since I’ve only had employer supplied health insurance.

  28. 28.

    Another Scott

    @Ohio Mom: Given how often paperwork gets “lost” when dealing with insurance companies, you can bet that there will be lots and lots of people who suddenly end up “without coverage” and will be subject to that penalty.

    Cui bono? (Who benefits?)

    This is just a sop to the insurance executives to get them on-board with gutting the ACA. It doesn’t help people keep coverage, it doesn’t reduce costs, it doesn’t make people healthier. It drives up stress, it increases paperwork costs, it is an incentive for companies to drop people, etc., etc. It’s clearly designed to break the system and temporarily reward insurance companies. (Like (almost) all big businesses these days, they’ll take anything that gives a next-quarter bump in their stock price over long-term profits every time.)

    Here’s hoping that we can make enough noise that Ryan and the others pushing this crap are defeated so badly that they refuse to try to break it ever again.

    Where’s this generation’s Claude Pepper? It’s time for them to speak up – forcefully.

    Cheers,
    Scott.

  29. 29.

    Barbara

    I lightly edited your major points and posted it on my personal Facebook page. I really think people who aren’t wonks have a hard time understanding all of this.

  30. 30.

    Barbara

    @Kryptik: They will fall back on the notion of being “innocent,” something that sets my teeth on edge because if you actually understand Christian doctrine post-Augustine, the concept of “original sin” means that no one is truly innocent.

  31. 31.

    gene108

    @Immanentize:

    The Bush, Jr tax cuts were passed via reconciliation, which is why they were set to expire in 2011, because they increased the debt.

    I am not sure how many changes can be done via reconciliation, since it only applies to budget issues like taxes.

  32. 32.

    chopper

    @Ohio Mom:

    i love that part. under o-care, if you don’t have coverage you pay uncle sam aka the american people. under this POS, if you don’t have coverage you pay for some CEO’s new pool house.

  33. 33.

    Another Scott

    @gene108: The Atlantic from January:

    […]

    Reconciliation could be used to do a number of things if an H.R. 3762-like bill is too risky. The GOP could use it to alter the individual mandate; reduce, rather than strip away, subsidies; or phase out Medicaid expansion funds to ease the pain. They could change federal commitments to paying insurance plans for taking on the additional risk of exchange enrollees (though Congress would do so at its own peril).

    Yet even if Republicans pass a less scorched-earth reconciliation, each of these actions could invalidate federal contracts with insurers and allow them to exit the exchanges early. Mandate or not, such rules could kill the private–public cooperation of the exchanges and start millions of Americans on the road to uninsured status.

    One thing reconciliation probably cannot do on its own is remove the provisions of the ACA that prevent insurance plans from denying coverage for pre-existing conditions. Any modifications to that requirement would have to come from the “replace” part of “repeal and replace,” and be initiated in the normal filibuster-bound rules. That limitation of reconciliation might be its biggest weakness for Republicans, because the requirement to provide coverage for pre-existing conditions essentially requires an individual mandate to work. Without a way to compel healthy people into purchasing insurance, markets are at risk of “death spirals.” That’s where only sick, and thus expensive, patients sign up for insurance; insurers can’t deny them coverage; and they, in turn, can’t create profit for insurers. Again, insurance companies might balk at that prospect and leave the markets altogether before they start taking more losses.

    Republicans have created a quandary. If they follow through with a reconciliation-based repeal before a replacement comes along, there are serious potential effects for health markets, jobs, and health care that might not be fixable with a follow-up plan. But they need to get the job done this year if they want to push through a major tax-reform reconciliation plan sometime in early 2018, as only one reconciliation bill can be passed per year. The increasing disunion among Republicans on what shape a replacement bill might take could drag the process, and each day that passes is one in which people gain more coverage and supporters of Obamacare can mobilize more opposition. The pressure is on.

    Cheers,
    Scott.

  34. 34.

    msdc

    A minimum blocking coalition looks like it is formed in the Senate on Medicaid although Sen. Capito-Moore (R-WV) is a bit soft on that.

    Looks like today is a good day for Cole to call his senators and representative.

    The rest of us too, of course.

  35. 35.

    Waspuppet

    Once you realize that Obama is out of office but the ethos behind the entire Republican Part is STILL “That n!&&@r ain’t the boss of us!,” the bill makes more sense. Or “sense,” more accurately.

  37. 37.

    catclub

    Here are the major points of the bill.

    left out: Repeals 3.8% investment tax on incomes over $250k – which is the only part that matters to most GOP pols.

  38. 38.

    J R in WV

    Hey, David:

    Great to see you still working on educating people about this screaming duck of a bill. Want to urge a correction in the main post, though.

    A minimum blocking coalition looks like it is formed in the Senate on Medicaid although Sen. Capito-Moore (R-WV) is a bit soft on that.

    Senator Shelly Moore Capito’s maiden name was Shelly Moore, daughter of former Governor and congressman Arch A. Moore – she then married Charlie Capito, who is an executive of some sort with Wells Fargo Bank in WV. VP of whatever. So she should probably be Senator Moore-Capito, as she seems invested in the name of her late father, convicted federal felon that he was.

    He was indicted and tried in state court for such things as taking the vast majority of an estate when he had himself appointed committee for the disabled heir. Hundreds of shares of Exxon stock, considerable acreage on the Ohio River, family mementos like that. Either found Not Guilty or unable to reach a verdict in state court – lots of people he had helped wouldn’t believe anything like that of their guy, Arch. He remained extremely popular, with many supporters, until his death.

    That was only the earliest of his perfidies and a federal indictment against Arch indicated the entire family — including Sen. Moore-Capito — took a lengthy trip to Europe on their patriarch’s dime. According to the indictment, Arch paid their airline fare with a credit card. The rest of the entire trip was paid for with cash out of Arch’s suitcase, four-star hotels in London and Paris, meals at the best restaurants and clubs, etc.

    He was finally absolutely busted by an associate who wore a federal wire while riding in the back of a limo while Arch met with business men interested in doing business with the state government. They met other limos but the wire being on a trusted accomplice, the feds had recording. s of the deal making whichever limo it was done in.

    He plead guilty in federal court, and then tried to take it back after being sentenced to prison, saying he didn’t understand his lawyer’s advice, in spite of Arch A Moore having been a practicing lawyer for 30 or 40 years… a friend of a friend was in the military and was walking her new baby on the base when she saw a guy working on the shrubbery as a grounds-keeper on the base, in an orange jumpsuit. She thought, “That guy looks familiar!” and walked to the corner and came back, pushing the baby in the stroller. “Holy Cow, that’s the Governor!” she realized, serving his sentence at a prison camp adjacent to an AF base in Alabama.

    A neighbor worked for a guy called E.M. who was in the Republican party and applied for the job managing the Civil Air Patrol. He was told he got the job, had an appointment to see Governor Arch A. Moore Jr, who congratulated him, shook his hand. Then he never heard back. He asked a friend of his why he hadn’t heard back, and the guy asked him “Did you leave an envelope on his desk?”

    “No, what do you mean?” E.M. said. He hadn’t understood that the whole purpose of the meet in the Governor’s office was to leave the kickback on Arch’s desk. Arch was proud of his ability to make money, and kept roughly a quarter million dollars in his disk drawer – evidently it made him feel richer than just a line on a bank account printout. He showed it off to lots of people, it made the newspaper eventually. That’s no doubt part of the stash he used to take the whole clan to Europe.

    Anyway, that’s a peek into Senator Shelly Moore Capito’s political upbringing. Now, please, you should change her name in the quote above from the original post.

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