Trump healthcare reruns: Graham-Cassidy and the Sundowning Kid

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April Fool! Trump is once again promising an ACA replacement with low premiums and low out-of-pocket costs.

The cost of ObamaCare is far too high for our great citizens. The deductibles, in many cases way over $7000, make it almost worthless or unusable. Good things are going to happen! @SenRickScott @senatemajldr @SenJohnBarrasso @SenBillCassidy

— Donald J. Trump (@realDonaldTrump) April 1, 2019

It's coming along great:

The president brought up healthcare again on Friday, claiming he would have a “much better” plan than Obamacare. “The health care’s going very well,” he told reporters in Florida.

Takes a person back...to, say, Jan. 15, 2017

President-elect Donald Trump said in a weekend interview that he is nearing completion of a plan to replace President Obama’s signature health-care law with the goal of “insurance for everybody"...

Trump said his plan for replacing most aspects of Obama’s health-care law is all but finished. Although he was coy about its details — “lower numbers, much lower deductibles” — he said he is ready to unveil it alongside Ryan and Senate Majority Leader Mitch McConnell (R-Ky.).

“It’s very much formulated down to the final strokes. We haven’t put it in quite yet but we’re going to be doing it soon,” Trump said.

2017: A year of healthcare combat

2017 was the fourth year in which xpostfactoid focused mostly on healthcare access -- and more specifically, on ACA implementation (and, this year, on de-implementation, threatened and actual).

It was a year of intense combat (to be continued...) and high drama, and I participated not only via writing, but as an advocate in New Jersey working to help ward off ACA repeal, and as a Certified Application Counselor during Open Enrollment.

Below is a look back at a few posts, roughly one per month, that I hope might have contributed something to our understanding of where we've been and where we're headed in the struggle toward (or away from) universal healthcare access. These include:

• Statistical measures of the extent to which Republican repeal-and-replace bills (AHCA, BCRA) would reduce subsidies to low income Americans (and relatedly, at the contrasting structure and aims of Democratic and Republican healthcare spending cuts).

• Previewing the paradoxical effects of Trump's cutoff of federal reimbursements for Cost Sharing Reduction subsidies, then spotlighting the actual effects in counties where marketplace enrollment is heaviest.

• Snapshots of who's benefited most (1, 2) and who's been left out (1,2,3) by ACA offerings.

• A couple of passes (1, 2) at my vision of how U.S. healthcare might most plausibly and profitably evolve.

Here they are in chronological order, earliest first:

What might moderate Republicans do to the ACA?

From the release of the AHCA on March 4 to Sunday night's amendments to Graham-Cassidy, Republican repeal bills have got ten worse and worse -- more conducive to individual market chaos, more draconian in Medicaid expansion rollback and per capita capping of federal medicaid payments. All of the bills would reduce the ranks of the insured by more than 20 million. Which suggests a question: what would a "good" partial repeal bill look like?

To some extent that's a nonsense question. The ACA embodies a Democratic concession to a core conservative concept: That there's inherent virtue in establishing a competitive insurance market, that doing so will drive down costs and improve healthcare quality (i.e., that insurers can make providers deliver better care more cheaply). The ACA's flaws are in any case all in a conservative direction. Real fixes would include bigger subsidies, including via reinsurance; some means of capping the rates insurers pay providers, as in Medicare Advantage or Medicaid managed care; rules more or less compelling providers to accept the insurance (i.e., if they accept Medicare); and strong incentives for insurers to participate in the market (tied to their eligibility to participate in managed Medicaid or Medicare Advantage markets).

A genuinely moderate Republican would not accept such changes but would seek to amend rather than repeal/replace the ACA -- not just in the short term, as Lamar Alexander has called for, but for the long term, as Susan Collins would probably like to do  There's no shortage of proposed conservative tweaks that might do minimal harm and in some cases perhaps even some good. Yevgeniy Feyman and Paul Howard could write such a bill. Here's my sense of what concessions might be won from Democrats in exchange for CSR and reinsurance funding.

Compromise maybe a little? Urban Institute's Blumberg and Holahan on what's next for the ACA

In August 2015, Urban Institute healthcare scholars Linda Blumberg and John Holahan acknowledged that ACA marketplace subsidies were too skimpy to do all they were intended to and came up with a comprehensive proposal to enrich them.  In January 2016, staring down the barrel of Republican repeal vows, they remixed those improvements in a compromise package that included several concessions to conservative priorities. These included:

• Repeal the employer mandate (requiring employers with more than 50 employees to offer insurance or pay a penalty)
• Repeal and replace the individual mandate  (with a premium penalty for those who did not maintain continuous coverage)
• Examine the Essential Health Benefits and look for responsible ways to lighten them
• Allow states to drop the income threshold for Medicaid eligibility to 100% of the Federal Poverty Level (FPL). At present, the threshold is 138% FPL in states that have accepted the ACA Medicaid expansion. 

As I noted recently, these concessions were embedded with offsets: reinsurance to mitigate the premium hikes likely to be triggered by individual mandate replacement, and lower out-of-pocket costs to cushion the substitution for enrollees in the 100-138% FPL range of private insurance for Medicaid (richer subsidies across all income levels would also offset the ill effects of a weaker mandate substitute).

"Not losing, choosing"? - Avik Roy turns up the gaslight on the BCRA

Two weeks ago, I took on the argument of various BCRA proponents that most of the 22 million people forecast by CBO to lose insurance coverage should the bill become law would be "choosing, not losing." That write-off of legions of uninsured was founded on CBO's assertion that most of the first-year coverage loss of 15 million would occur "primarily because the penalty for not having insurance would be eliminated."  Expect to hear more of this, I forecast.

In brief, I suggested that argument depended on  1) conflating the forecast immediate effect of mandate repeal in 2018 with the ten-year effect; 2) ignoring the extent to which, in CBO's own telling, the mandate interacts with other changes in the marketplace and Medicaid; and 3) pooh-poohing the obvious and stated purpose of the mandate, which is to boost the ranks of the insured and reduce premiums by improving the risk pool -- which CBO clearly assumes it has accomplished in some measure.

Now here cometh Avik Roy, chief healthcare apologist for the Republican establishment, making the "choosing not losing" argument in detail.  Roy's addition to the argument hinges mainly on a rather breathlessly presented look at CBO's unpublished estimate of 10-year coverage losses attributable to mandate repeal under the BCRA (provided to Roy by a Congressional staffer). This estimate closely tracks CBO's published December 2016 analysis of the effects of repeal of the mandate alone, with the ACA left otherwise intact. CBO forecast that straight mandate repeal under the ACA would result in a ten-year coverage loss of 15 million, as compared to CBO's forecast that 22 million will lose coverage under the BCRA. Here's CBO's breakout of the losses under straight mandate repeal:

Go ahead, Trump, cut off CSR payments -- starting in 2018

Imagine for a moment that Republicans fail to pass legislation repealing the ACA -- leaving the ACA marketplace intact as a matter of law,  however shaky its economic viability. Imagine further that Trump continues through this year to reimburse insurers for the Cost Sharing Reduction (CSR) subsidies they are obligated by law to provide to qualifying enrollees, but announces that he will cease paying them in 2018 -- declining to contest the suit that House Republicans filed against the Obama administration, challenging its authority to pay the subsidies without Congressional appropriation.

That act of continued apparent sabotage might shake insurers and drive some to exit the marketplace. But having already priced CSR in to their 2018 filings, as they are now doing, they probably wouldn't exit en masse, as David Anderson has argued. Leaving aside other acts of sabotage, forcing insurers to price in and pay out the full actuarial value of all the plans they sell might actually improve the marketplace -- providing a kind of backdoor CSR subsidy for shoppers at the upper end of the subsidy scale.

Those uninsured by the BCRA "not losing, but choosing"? Get ready to hear it more.

Bloomberg reporter Steve Dennis flags a Republican talking point in favor of their latest travesty of a 'healthcare" bill that we're likely to hear more of in the next two weeks:

Frequent GOP talking point in Senate hallways: +22M won't be "losing" health insurance, they'll be "choosing" to go without. https://t.co/o4Anh6DY5i

— Steven Dennis (@StevenTDennis) July 6, 2017

That's in response to:

Not lose, choose. Apparently you believe freedom is optional https://t.co/WIUJz2Mxv7

— JohnCornyn (@JohnCornyn) July 6, 2017

This argument was first voiced byPaul Ryan, defending the first iteration of the House bill, and later by Tom MacArthur*, whose amendment undermining protections for people with pre-existing conditions secured that bill's House passage. As Cornyn, the Senate majority whip, has emerged as gaslighter-in-chief defending the Senate bill (the so-called Better Care Reconciliation Act, or BCRA), we should regard it as a kind of front-line defense. If the cabal now redrafting the BCRA in secret manages to improve the CBO score by throwing a couple hundred billion dollars back in the coverage pot -- reducing the forecast increase in the uninsured to, say, 15 or 12 million --expect to hear a lot more of it.

There is a ghost of truth in the allegation, which can be made to look more substantial by gaslight. so let's shine some stronger light,. A few points:

Healthcare spending cuts, Democrat style. Healthcare spending cuts, Republican style

The cut to federal Medicaid spending that CBO estimates would result from the BCRA -- $750 billion over ten years -- superficially recalls ACA cuts to Medicare spending, estimated by CBO in 2010 at $455 billion. As Democrats raise the alarm about deep damage to Medicaid, so Republicans screamed for years that Democrats were cutting Medicare. But of course there are fundamental differences:

• Democrats cut the growth in Medicare spending and spent the savings to extend health insurance to the uninsured. Republicans want to cut Medicaid to fund tax cuts for the wealthy and for healthcare companies.


• The ACA specifies that the reductions it mandates in spending growth are not to reduce services provided to Medicare beneficiaries, but only payments to providers. The "Medicare guarantee" that has been stable in traditional (fee-for-service) Medicare for decades -- premium-free hospital coverage, 75% premium subsidy for physician services, actuarial value a bit over 80% for these services, and (since 2006), somewhat weaker drug coverage -- remained intact, and in fact strengthened on the drug front. 

The party of Cost Sharing Inflation

When House Republicans sued the Obama administration in 2014 to stop federal payments to health insurers for Cost Sharing Reduction subsidies in the ACA marketplace, the simple goal was sabotage: use any tool that came to hand to hobble the markets.  (That goes as well for refusing to appropriate the budgeted funds for CSR.)

At the same time, I suggest today in a healthinsurance.org piece that will be out this morning, this particular bit of legal vandalism made ideological sense, in that Republicans do not believe in cost sharing reduction. They believe in cost sharing inflation: if each of us pays a higher percentage of our medical costs, we'll demand better prices for care, and prices will go down.

This ideology is fully expressed in the BCRA, which asks low income people to swap out Medicaid coverage, or CSR-enhanced marketplace coverage at AV 94% or 87%, for coverage at AV 58%. That's a feature, not a bug. Hope you'll take a look. 

Trading Medicaid coverage for high deductible private market coverage

The Senate version of the AHCA, the Orwellianly named Better Care Reconciliation Act, does even more fundamental damage to the U.S. healthcare system than the House bill. While it phases out the ACA Medicaid expansion more slowly, stepping down the enhanced federal contribution over several years, it imposes even tighter per capita caps on Medicaid, limiting annual growth to the straight CPI after 2024. The damage to Medicaid will be continuous in perpetuity, barring further legislation.

The BCRA does toss a bone to the dis-insured poor by offering private-market subsidies to those who are shut out of Medicaid. Under the ACA, in the 31 states plus D.C. that accepted the law's Medicaid expansion (rendered optional to states by the Supreme Court), anyone whose household income is below  139% of the Federal Poverty Level (FPL) qualifies for Medicaid, and so not for subsidies in the private plan marketplace (with one class of exceptions*).  In states that refused the expansion -- a possibility not envisioned by the law's drafters -- eligibility for Marketplace subsidies begins at 100% FPL, and those below that level are left out in the cold -- because their state's governors and legislatures wanted it that way.

The BCRA allows people with incomes in 0-100% FPL range to buy a "benchmark" plan for 2% of income, and those in 100-133% FPL range** to buy one for no more than 2.5% of income: