Saturday, February 25, 2017

GOP Obamcare bills likely to be a budgetary disaster

The Washington Post had a good rundown of the potential ACA replacement plan being discussed among Congressional Republicans, and it doesn't seem likely to keep the uninusred rate at the decades-low figures that we have today.
Meanwhile, the new plan would eliminate the income-based tax credits given to people who can’t afford insurance on the individual market, to be replaced with tax credits by age. But the Post also reports that the emerging GOP subsidy scheme is getting pushback from budget analysts, who are telling Republicans on the Ways and Means Committee (which is working on the subsidy plan) that it will stint on subsidies to those who need them most, i.e., lower income people:
According to the several people familiar with House leadership’s approach, a central idea under consideration there — new health-care tax credits — hit a snag this week when congressional budget analysts reported privately to the committee that they would cost the government a lot of money and would enable relatively few additional Americans to get insurance.

Those tax credits would replace subsidies the ACA provides people with incomes of up to 400 percent of the poverty level to help them afford health plans through marketplaces created under the law. The credits would be available to everyone who buys coverage on their own, wealthy or poor. But the Congressional Budget Office has concluded that the credits, as conceived at the moment, would be too small to help low-income people afford health plans. They also wouldn’t make much difference to affluent people, according to the CBO, since most of them already are insured.
In other words, fewer poor people would be covered under the GOP’s plan and taxpayers would pay more. What a deal!

That reality doesn't really jibe with this statement from an alleged Wisconsinite.

So what’s one way that Republicans could prevent Obamacare repeal from exploding the country’s budget deficit, especially in light of the huge tax cuts on the rich that the ACA bill has in it? Shoving a huge tax increase onto people that are already getting insurance through their job!
As Utah Sen. Orrin Hatch has made clear, the party’s real bottom line is that ACA taxes have to go — and the rub isn’t the tax penalty working people pay if they don’t get insurance, either through Obamacare or at work. A possible source of funds being floated for this investor-class tax cut? The $268 billion it costs to make benefits you get at work tax-exempt.

Let’s take the average corporate-sponsored family health plan, which the Kaiser Family Foundation estimates costs $18,142, of which companies pay $12,865. Though this is part of your pay package, you don’t pay taxes on it. Under at least some Obamacare-repeal plans, you would.

For families making between about $55,000 and $86,000, the middle fifth of all incomes, fully-taxed insurance would hike taxes by $1,900 to $3,200, using tax rates of 15% and 25% and assuming no offsetting deductions. The higher figure would also apply to the fourth income quintile, which runs up to about $133,000 in family income.
So instead of just screwing people in the lower classes, the GOP’s plan also screws middle and upper-middle class people who don’t even get their insurance the Obamacare exchanges. What a brilliant strategy!

And then let’s remember another aspect of Obamacare- Medicaid funding. DC publication (and RW troll hangout) The Hill broke down an earlier draft of the GOP’s plans to replace/change the ACA, and that draft indicated that sizable amounts of money would be sent to states to establish certain programs to serve certain high-cost/risk individuals. In addition, the expanded Medicaid funding that a majority of states have taken advantage of (Wisconsin not being one of them) would go away, and instead be replaced by block grants.
The plan also includes $10 billion per year in “state innovation grants,” which are a version of high-risk pools but appear to allow for a broader array of uses for the money by states. The money could be used by states to help sick people get coverage and stabilize premiums.

As an alternative to ObamaCare’s individual mandate, the plan would allow insurers to charge people 30 percent more on their premiums if they had a gap in coverage and then signed up again.

The plan also includes a “per capita cap” for Medicaid, which imposes a per-person cap on federal spending on Medicaid. A lobbyist who reviewed the language said the Medicaid provisions were more generous than expected, based on the growth that is set out for the cap on federal payments.
Ahh, there’s your savings! Reduce the amount of funding many states get for Mediciad, and either leave them holding the bag to have to pay more money themselves, or cut off a large amount of the working poor who have had their situation stabilized due to Medicaid being made available to them.

Obviously there's a caveat in that we there isn't a final bill out there, and the blowback that we're already seeing at GOP Reps holding town hall over any possible changes to the ACA might well lead to more changes. But from the fiscal side, there is little doubt that any move to get rid of Obamacare under Republicans will be expensive, and likely handcuff the rest of the federal budget, which would lead to further cuts in other areas.

That outcome is probably just fine with this group.

These insured, well-connected folks in the Beltway don't need to worry about the backwards steps that will be imposed on tens of millions of Americans. So maybe it's up to us to do things that make them worry.


  1. Ryan's comment is a rephrasing of the old "red cup" argument.

    The problem with that notion is that there's no way you drinking out of red cup is going to increase the cost of my 50th anniversary La Crosse Oktoberfest beer stein.

    Getting a cheap insurance plan forces costs on to the rest of the market when you get sicker or more injured than your plan covers and we, being a decent people, decide not to let you die in agony.

    Additionally, I'm wondering when Republicans will figure out that there's no market incentive to provide care to poor people who don't have money or old people who don't have enough to cover their expanding costs.

    1. Jeff, I am planning on attending one of my representative's town halls and if I get a chance to speak, asking him to tell me specifically which for-profit insurance companies have indicated they will be able to make a profit offering privatized Medicare policies to seniors. You know, seeing as how Paul Ryan's Medicare overhaul is set up surprisingly like Obamacare and according to Republicans insurers are jumping ship on Obamacare because they can't make a profit.
      It's important that Republicans figure out that insurers can't make money on people with no money or little money, but even more important to make citizens understand that poor people and the elderly are about to get hurt, and hurt badly.

    2. Jeff, Sue- I don't think Republicans CARE that many poorer, sicker people would get screwed. And yes, I do think many of them know the reality that greedy insurance companies won't cover them due to a lack of profitability. But since the poor and the minorities don't write their donor checks or vote for them anyway, they see no reason to care about that.

      Trump basically said this the other day. Let's stop assuming these people (and the donors who hold their puppet strings) have any concept or desire to promote "the public welfare." They believe in greed and Darwinism, and it should be called out accordingly.

  2. I'm not sure I can quantify what, if anything, Obamacare did to my employer-sponsored health plan that directly affected me, but I'm quite certain that $2k to $4k in additional taxes will certainly be noticed. They do know that the investor-class is a minority right? Or do they just rest on the issue politics and anti-Hillary wave they've got going with people who don't even read so much as one blog on what's happening?

    1. This comment has been removed by the author.

    2. The real world isn't filled with the investor-class. But the DONOR class is quite a different population from that, and those are the people these GOP slimebuckets know better.

      They really do think that they can get away with anything, because they think gerrymandering protects them one way, and dumb-fuck rednecks and fundies will ignore how badly they are being screwed by these policies because they'll default to resentment and fear of the "libr'uls."

      I think these GOP sickos are wrong, but that's clearly their bet. Right now, they care more about angry Trumpkins primarying them instead of the other 2/3 of society voting them out in November 2018.