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You are here: Home / Anderson On Health Insurance / ACHA EHB CBO state of play

ACHA EHB CBO state of play

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Right now there are three primary possibilities for the ACHA tomorrow:

1) No vote is taken as more wrangling and tweaking occurs
2) Vote fails as the combination of Tuesday Morning Group Republicans and the House Freedom Caucus vote against the bill from both ends of the Republican caucus. This is where we were most likely to have been at at 1800 EST on March 22, 2017
3) ACHA advances as the House Freedom Caucus gets a major policy concession, the elimination of Essential Health Benefit requirements.

#3 is what I want to discuss. It would produce a massive cluster. The bill needs to go through the Senate as a reconciliation bill with several significant requirements. One of those requirements is the items are germane to the budget. Since the other parts of the bill have stripped the link between premiums and subsidies, lower premiums are not germane to the budget. It will get stripped.

More importantly, the optics will look ugly. The Congressional Budget Office

If there were no clear definition of what type of insurance product people could use their tax credit to purchase, some of those insurance products would probably not provide enough financial protection against high medical costs to meet the broad definition of coverage that CBO and JCT have typically used in the past—that is, a comprehensive major medical policy that, at a minimum, covers high-cost medical events and various services, including those provided by physicians and hospitals.

IF Essential Health Benefits are dropped from the bill, the CBO will project that insurers will respond by offering very skinny benefit packages (no maternity or substance abuse inpatient services for instance as both qualify as high cost events) that are targeted to be priced at precisely the subsidy value. If there is no regulation as to what a carrier needs to include with a given maximum out of pocket requirement, two things will happen. A lot of people who otherwise would not use their subsidy would use their subsidy. And most people who are buying mostly on price will be buying policies that the CBO does not deem to be insurance.

Jed Graham has been bird-dogging this angle hard:

Because the GOP bill would mostly retain ObamaCare coverage rules, insurance would be unaffordable for lower-income and older adults with the new, smaller tax credits on offer, so some 30 million people wouldn’t claim the GOP tax credit averaging $3,000 in 2020 and rising with inflation. That would add up to more than $600 billion in unclaimed subsidies through 2026, or roughly the same $600 billion amount by which House Speaker Paul Ryan’s plan cuts taxes. Those unspent subsidies go a long way to explaining why CBO found that the American Health Care Act would reduce deficits by $323 billion over a decade.

So the end result if Title 1 is the price of passage is the following:

  • Guarantee failure in the Senate
  • Adds to the deficit immediately
  • Adds millions more people to the ranks of the uninsured as defined by the CBO over and above the 24 million that is the current score

/Dave Anderson +3

Update 1:
And it looks like Option #3 is on the table

 

Update 2

Dave +3.5

Reader Interactions

77Comments

  3. 3.

    Another Scott

    Here’s hoping they implode so badly that they forget about trying to destroy the ACA to hide their giant tax cuts for the 0.01%. They can ram through their precious tax cuts the old fashioned way, and keep their vile hands off the essential health care system of the American people.

    ICYMI, John Dingell’s twitter stream from yesterday is a good read. It starts with:

    Who knew health care could be so complicated?

    4:11 PM – 21 Mar 2017

    In 1943, my father was one of the first people to introduce comprehensive health care reform in Congress, a single-payer system for all.
    4:38 PM – 21 Mar 2017

    […]

    Cheers,
    Scott.

  4. 4.

    NYCMT

    So tonight’s version of Trumpcare is that coupon for free lunch and fifteen bucks worth of tokens that you used to get for riding the casino bus from the Port Authority to the Bally’s Grand in A.C. a million years ago?

  7. 7.

    Yarrow

    Thanks for the post. The whole thing is such a mess. I’ll be calling again in the morning.

  9. 9.

    Mnemosyne

    I’m assuming that part of the rush is to get it done ahead of the breaking news stories about Russia. Ryan has his wish list for turning the clock back to 1899 and he’s not going to let a little treason slow him down.

  10. 10.

    tobie

    If I’m understanding Jed Graham’s point right, the perversity of the current GOP proposal is that it saves money by offering subsidies that are inadequate for buying insurance, so many people will forego insurance altogether, leaving the subsidy with the Treasury. Remind me, who pays for bankruptcies in this country?

  11. 11.

    dmsilev

    @Mnemosyne: No, they want to pass it tomorrow because it’s the anniversary of one of the original ACA votes. Seriously. The country is being run by a set of spiteful 6 year olds.

  15. 15.

    tobie

    @David Anderson: Sorry to be so obtuse about this, but doesn’t this mean that getting rid of the EHBs will have budget implications that make reconciliation an unusable mechanism in this case? My head hurts from all this.

  16. 16.

    dmsilev

    @Mnemosyne: It really was a missed opportunity that Obama never made a PSA about the dangers of drinking bleach or doing cartwheels across ten-lane interstates.

  18. 18.

    dmsilev

    @tobie: Things that _don’t_ have budgetary implications can’t (at least in theory) pass through the reconciliation pathway. The EHBs don’t have any (direct) budgetary implications, so again at least in theory, including something that strips those out means that you’re doing non-budget stuff and hence can’t use reconciliation.

  19. 19.

    NYCMT

    @tobie: In a tour de force of bad faith, Mike Lee and Ted Cruz have suggested that Pence, as presiding officer, override the parliamentarian, whipping the R’s to a voice vote approving the rule change, and pass the House bill. This blows up the Senate good.

  20. 20.

    Jim, Foolish Literalist

    Ryan Lizza has (it looks like) an anonymous Freedom Caucus guy who says the bill is still likely to die, that R’s are astonished at just how far in over his head trump is, and that McConnell is calling the shots. That last part surprises me, I thought Cruz and Paul were working through the Freedom Caucus

  21. 21.

    Chet Murthy

    @NYCMT: IIUC, this is equivalent to blowing up the legislative filibuster, right? Ending the need for cloture, right?

    Uh ….. in one sense, this wouldn’t be the most awful outcome, ASSUMING THAT THEY WERE GOING TO PASS THE AHCA (in some form) ANYWAY.

    I’m NOT saying that the AHCA isn’t awful. But if some awful thing is going to pass, then better that it take down the filibuster and all the other old rules that these old-fart conservatives use to get their way, yes?

  23. 23.

    Major Major Major Major

    David raises a very good point that I had forgotten about, but they covered it on the radio this morning too–one of the reasons that the CBO score came in so low on Trumpcare is because the EHB regs, combined with the lack of a mandate, would simply price 10 million or so people out of the insurance market. So they wouldn’t be using the subsidies offered to them as refundable tax credits. So it’s a big pile of money not being spent, even though it’s sort of being offered (as a coupon on a product that you can’t afford anyway).

    Getting rid of EHB’s would lead to this money being spent, because suddenly there would be insurance products on the market that people could afford with their new, shitty subsidy (as David notes, priced right at the subsidy line). It blows the deficit up HUGELY, and then it’s no longer a reconciliation bill–EVEN IF we allow that EHB’s can be stripped via reconciliation in the first place.

  25. 25.

    Sab

    What’s up with your moderation. I had never been in moderation before today. Now I have been twice in a day . First for an innocuous comment about ketchup. Second for a comment about the unavailability of health insurance for feminine gendered folks in 1972. Still an issue.

  29. 29.

    dr. bloor

    IF Essential Health Benefits are dropped from the bill, the CBO will project that insurers will respond by offering very skinny benefit packages (no maternity or substance abuse inpatient services for instance as both qualify as high cost events) that are targeted to be priced at precisely the subsidy value.

    Insurer: I have just the policy for you. Just a smidgen below the “Gold, Silver, and Bronze” stuff. We call it the “Chevy Corvair” line.

    Customer: How much is it?

    Insurer: How much you got?

  30. 30.

    Major Major Major Major

    I was listening to All Things Considered for a bit today and they had on some southern asswipe representative talking about how, now first of all little lady, 11 million of those people “losing” “coverage” are just going to stop buying it because they were forced to buy it in the first place and never wanted to. And they actually just straight-up interrupted the interview to fact check-him before cutting back to it.

  31. 31.

    Chet Murthy

    @Omnes Omnibus: Sorry, I was asking a question, not stating a fact (*grin*). I was asking if, ruling that “AHCA + EHB repeal” could be passed via reconciliation (hence, 50+1 votes) is the same as blowing up the filibuster?

    It seems like there’s two classes of laws the Senate passes:

    (a) reconciliation (for budget items only) — 50+1 votes

    (b) other laws — 60 vote cloture + 50+1 votes

    If the rule is changed so that any laws in #b can be passed via #a rules, isn’t that the same as saying the legislative filibuster is dead?

  32. 32.

    Ohio Mom

    @Jim, Foolish Literalist: That shows you how incredibly dumb the Freedom Caucus is, that they are surprised by how over his head Trump is.

    What other completely obvious things have escaped their notice? Maybe we finally have an answer to the question, Are they stupid or evil?

  33. 33.

    tobie

    @Major Major Major Major: I don’t know if its quality brinksmanship or just the fact that Republicans don’t seem to care about anything but sticking it to the Democrats, the poor, and brown people. None of this debate is even about healthcare. The right doesn’t bother to pay lip service to policy anymore. They’ll have killed Obamacare on its anniversary. That’s the only thing that motivates them.

  36. 36.

    MomSense

    ¥€{>>>€\££>>|?€¥¥\>?? Poliquin’s phones always go to voicemail and the voicemail box is always full.

    If you are going to vote for something that will cause death and ruin to your constituents at least have the courage to hear what they have to say about it.

  37. 37.

    Major Major Major Major

    CNN sez: “House GOP leaders emerge from late-night meeting without yet securing enough votes to pass the health care bill.”

    Question for the olders: can you remember any other whip count being reported on like this??

  38. 38.

    patroclus

    I’m fairly confident that they’ll pass something. Republicans fall in line and I think the hold-outs just want concessions – they aren’t really opposed to moving the legislation along. Then, they’ll get to blame the Senate if nothing is enacted eventually.

  39. 39.

    Chet Murthy

    @Major Major Major Major: Wasn’t there that famous walk-of-shame by Boehner and his caucus, when they were unable to reach agreement on something-or-other? Was televised, in the basement of one of the Office Buildings? Man, don’t remember anything more. Maybe it was about the debt ceiling?

  40. 40.

    Another Scott

    @Sab: Assuming you didn’t use a FYWP word, lots of things seem to get broken whenever the WordPress software under this blog gets updated. There was an update a week or so ago.

    It’s something that happens. It happens to most of us, at one time or another. Part of the “charm” of this place, like lack of threaded comments (“Hi OO!!”).

    Worst case, you can change your pseudonym, and try again, but then you have to wait for your first comment to be approved by a front-pager.

    HTH a little.

    Cheers,
    Scott.
    (Who had to get rid of his first ‘nym because it had an apostrophe.)

  42. 42.

    dmsilev

    @Major Major Major Major: I don’t remember much blow-by-blow reporting, but when Tom DeLay ran the House, arm-twisting right up to the moment of the vote (and sometimes after; he at least once held a vote open literally all night until sufficient arms were sufficiently twisted) was a common occurrence.

  43. 43.

    quakerinabasement

    If EHB is removed, what’s to stop me (or anyone) from selling Magical Alien Telepathy health insurance and collecting subsidy money from my pigeons patients?

  45. 45.

    Jim, Foolish Literalist

    @dmsilev: Medicare Part D, wasn’t it? when Bush was a “war president” with approval well above 50%? As I recall it was one of those many times when Dems and Goo-goos were spitting nails and even the Broders were moved to tut-tut and say things like “my goodness”, but it didn’t catch on with the public

  46. 46.

    pattonbt

    I believe some fashion of this will pass both houses. They’re too far gone as a party now. They stand for nothing. They want to “win” badly on this today, no matter if everyone (including themselves) loses much more tomorrow. They can’t help who they are. Cleek’s law and all.

  51. 51.

    efgoldman

    @Chet Murthy:

    this is equivalent to blowing up the legislative filibuster, right? Ending the need for cloture, right?

    I really don’t think Yertle McTurtle wants to do that, even though he will feint in that direction. He (and his senile buddy Hatch) sent unmistakable signals in that direction in December.
    He doesn’t give a flying fuck about this particular piece of legislation, one way or the other.

  52. 52.

    Jim, Foolish Literalist

    @efgoldman: that’s why that anonymous Bagger surprised me, I would’ve thought if McConnell were calling the shots, he’d never open his door to find this flaming bag of poop lying there. Paul Ryan would find it in his gym bag first

  53. 53.

    efgoldman

    @Ohio Mom:

    Maybe we finally have an answer to the question, Are they stupid or evil?

    The answer is always “both/and.”
    Some are further along the stupid axis, some further along the evil, but each and every one of them is on the spectrum.

    Fuckem

  55. 55.

    Davebo

    Great coverage but still, after today there are bigger fish to fry than the take your healthcare bill.

  56. 56.

    pattonbt

    Any of these “wavering” republicans will fall in line because 1) they always do and 2) they have no choice – they’ve made their bed. To pass nothing now means 1) lose now and start their downward spiral to losing in the polls, 2) weaken Trump who is a useful idiot for them as long as his tweets hold power, and 3) lose now (because its about winning and losing, not governing and responsibility / ethics / morals, etc.). So they’ll do “something” which they will 1) tout as a “win”, 2) will hurt (and eventually send to an early grave and bankruptcy) millions of Americans, 3) pay their masters in tax cuts now (most important part of all this mind you), and 4) lose in the future – but that losing will be in the future so who cares as long as I survive another day! History will be very unkind to these monsters.

    And don’t hold hope for senate. All the Susan Collins’ in there will sell out lickety split when its time for a vote (only of course after the necessary few weeks of public hesitancy and fake signs of deference to caring for people).

  57. 57.

    efgoldman

    @randy khan:

    Reconciliation is a once a year thing

    Since the house hasn’t actually passed a budget in – how many years? – they won’t need it for anything else.

  59. 59.

    Davebo

    @Suzanne:

    You could totally beat up Ryan. He’s a sucker for the left hook. Fake a jab with your right, them bam with the left!

    I’ld pay you a thousand dollars to do it!

  60. 60.

    pattonbt

    @Jim, Foolish Literalist: I think McConnell has a fair amount of that Obama spite in him like Trump. So he’ll put forth anything that diminishes any Obama accomplishment. While the Senate is somewhat secure from the teatard right, McConnell probably doesn’t care what the repercussions are. He figures he’s safe as safe gets.

  62. 62.

    Jim, Foolish Literalist

    OT: I don’t know which seal has been opened, but in Trump’s America, DougJ retweets Luke Rusert

  63. 63.

    Jim, Foolish Literalist

    Sahil Kapur‏Verified account @ sahilkapur 2h2 hours ago
    NEW: @ RepCharlieDent, leader of the moderate GOP Tuesday Group, says he’ll oppose the health care bill.

    I’m guessing the Freedom Caucus is bigger and more cohesive than the “Tuesday Group”, but we’ll see

  64. 64.

    Suzanne

    @Davebo: SHIT. I’d pay a thousand dollars to do it. Then we could also have Paul Ryan-punching videos.

    I watch the video of a Richard Spencer getting punched to “Love Will Tear Us Apart” often when I need a laugh. GOD, it’s so awesome. I want a cigarette after watching it.

  65. 65.

    efgoldman

    @Jim, Foolish Literalist:

    he’d never open his door to find this flaming bag of poop lying there. Paul Ryan would find it in his gym bag first

    It’s still possible. And then, who replaces Granny Starver.
    Just like each RWNJ president since Sanctus Ronaldus has gone downhill, so it is with RWNJ house speakers. Newtnik was no great shakes, and we’ve gone downhill from there.

  72. 72.

    Bupalos

    Yeah I tend to think its fantasy to think this thing will go down because of the house. Its just a handful of unprincipled weak-knees faking it. They could be bought off for 1/10th what the Russo-Trumpublican “movement” is willing to throw at them.

    The only way it dies tomorrow is if powers that be in the senate need it to die in the house and stay off their docket. And I seriously doubt that.

  74. 74.

    zach

    For the life of me I don’t understand why the GOP doesn’t just pass a straight repeal with two different timescales:
    1) Taxes expire immediately; immediately end any Obamacare-mandated spending that doesn’t immediately change healthcare/insurance
    2) Obamacare expires in X years

    Choose the maximum X allowable to still pass under reconciliation.

    Americans didn’t mind all that much when Congress passed the last legislative time bomb (budget sequester)… only pay attention to stuff that happens immediately.

    Basically, this is “repeal and replace-or-let-die-whatever-future-Congress-wants-let-the-voters-decide” … you sell it by saying the next Congressional election will be fought over which party has the best Obamacare replacement with Trump promising to pass whatever comes to his desk as long as it meets the non-negotiables he promised during the campaign.

  75. 75.

    TenguPhule

    @zach:

    1) Taxes expire immediately; immediately end any Obamacare-mandated spending that doesn’t immediately change healthcare/insurance

    Well see, this is the sticking point that has the evil bastard wing of the Republicans fighting against the evil rich asshole wing of the party. They can’t agree on how to do it while still having room for tax cuts while still requiring poors to be set on fire metaphorically.

  76. 76.

    zach

    @TenguPhule: I’m pretty sure all but a few in the House would compromise on complete repeal with a time bomb. Even a pure repeal bill would have a 1 or 2-year time delay to avoid immediate chaos. I think it’s an easier sell to most of the GOP caucus and a LOT easier to defend than this bill which will be worse than Obamacare in every way for nearly everyone.

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