“They’ll Never Rally Behind A Single Plan”: The GOP’s Push To Replace ObamaCare Is Cynical And Doomed
On Friday, House Majority Leader Eric Cantor (R-Va.) is gathering key members of his caucus to work toward coming up with a single, official Republican alternative to the Democrats’ Affordable Care Act (ACA), or ObamaCare. Republican lawmakers have several competing bills to work with, and putting the party’s weight behind one plan or piece of legislation would be great for the country: Finally, America could have a real discussion about the best way to reform America’s health care insurance system.
But an official Republican health care plan would also be great for Democrats — which is reason No. 1 Republicans aren’t going to actually rally behind a single plan.
They will, of course, make a public effort. “GOP leaders have been clear that ahead of the 2014 elections, the conference wants to show what it is for, not simply what it is against,” says Daniel Newhauser at Roll Call. “Similarly, they want to show that they are not in favor of simply returning to the old health care system, which is viewed unfavorably by the electorate.” But any viable plan needs 218 votes from the fractured GOP caucus.
Cantor and his fellow House Republicans have at least three separate House bills to consider — from Reps. Tom Price (R-Ga.), Paul Broun (R-Ga.), and Phil Roe (R-Tenn.) — and a plan from Sens. Tom Coburn (R-Okla.), Richard Burr (R-N.C.), and Orrin Hatch (R-Utah) that was unveiled to much fanfare in January. There’s also a bill, from Rep. Todd Young (R-Ind.), that would raise ObamaCare’s definition of full-time employment to 40 hours a week, from 30. And a George W. Bush administration economist named Edward Lazear is pushing what he calls BushCare.
As they sort through these plans, what criteria will they use? If they can agree on one proposal, says Roll Call‘s Newhauser, it’s “likely to include poll-tested measures that have broad agreement in the GOP conference, including allowing the purchase of health insurance across state lines, allowing insurance portability between jobs, expanding access to health savings accounts, and limiting medical malpractice lawsuits.”
Another way of putting that: Republicans are looking for popular talking points that sound different enough from ObamaCare to win support from the more conservative factions of the GOP caucus. The problem, as The Washington Post notes, is that “there are only so many ways to preserve the patient protections that the ACA offers, which Republicans say they want to keep, while maintaining a private insurance market and assisting those who can’t afford coverage.”
Once Republicans hold up a specific plan, the Congressional Budget Office gets to issue its verdict and the public gets to weigh the proposals not just against ObamaCare but also the GOP’s attacks against ObamaCare.
The CBO analysis for Rep. Young’s bill to raise full-time employment to 40 hours, for example, found that the bill would raise the federal deficit by $74 billion while reducing the number of people getting employer-sponsored health insurance by about a million; about half of those people would go on Medicaid or other public programs, the other half would be uninsured.
It’s not clear the other Republican proposals would be popular in practice, either. Some of them, as the Washington Post editors note, would be better than ObamaCare at holding down health care costs and incentivizing people to buy private health insurance. But they are more disruptive to the status quo — especially post-ObamaCare — and almost all of them would be ripe for articles about sick people losing coverage or watching their health insurance costs skyrocket.
All of the GOP alternative plans, in other words, have their own drawbacks. Some people will lose, and some people will win. They would reduce the role of the federal government in most cases, but increase the power of insurance companies. Many of the policies are really interesting. Here are some examples of the big ideas from the GOP plans:
Cap or end employer tax breaks for providing health insurance: The idea here is that the insurance market is distorted by the tax incentives for employers to offering their workers insurance. It’s a fair point. But capping the tax breaks, as Coburn-Burr-Hatch does, or eliminating them would almost certainly cause employers to drop their plans. Almost 60 percent of Americans get their health insurance through work.
Provide tax breaks for individuals to buy their own insurance: With no employer-offered health plans, individuals and families would buy their own insurance on the open market. The Coburn-Burr-Hatch plan, for example, offers age-adjusted tax credits to people at up to 300 percent of the federal poverty line: Individuals 18 to 34 would get $1,560 a year, while those 50 to 64 would get $3,720 a year (families would get more than double those figures). Lazear’s BushCare would give all Americans with any type of health insurance $7,500 a year in tax breaks, or $15,000 for families; if people opted to buy low-cost, low-coverage insurance, they’d pocket the difference.
Allow insurance to be sold across state lines: This is a perennial GOP proposal to lower health insurance costs. The idea is that if insurers could sell the same policies to any state, regardless of that state’s own insurance regulations, it would increase market competition and drive down prices. A 2005 CBO report estimated those savings to consumers at about 5 percent overall, with the savings skewed toward the young and healthy; the old and sick would pay more. Enacting this option would require scrapping the minimum standards required for all plans under ObamaCare — a selling point for conservatives who argue we use too much health care, anyway.
“The fact that Republicans are coalescing around healthcare reform plans of their own could be very bad news for ObamaCare,” says Sally C. Pipes at Forbes. “Once voters see that the Republican alternative adds up to sensible and affordable health care, ObamaCare’s days will be numbered.”
But the opposite is almost certainly true. And House Republicans know that.
The GOP has gotten a lot of mileage out of its push to repeal ObamaCare — with a big assist, since October, from the Obama administration — but now the law is signing up real people (four million and counting) for real insurance policies. Republicans have to do better than provide plausible-sounding alternatives. They have to come up with a plan that Americans will think is much better than ObamaCare, and worth the disruption of overhauling the health care system again.
Here’s the bottom line: If reforming America’s health care system to provide near-universal affordable coverage were easy, it would have been done 60 years ago — or at any point since. Several Democratic presidents had tried and failed before President Obama. If Republicans had wanted to take their own bite at the apple, they had plenty of chances, too.
This isn’t spitballing. If Republicans want to be relevant voices in the health care debate, they have to come up with something. They should come up with a plan they can try to sell to America.
“One of the unseemly aspects of the last four-plus months is watching some on the right root for ObamaCare to fail,” says Forbes‘ Avik Roy, one of ObamaCare’s wonkiest critics. Among some conservatives, “there has been a kind of intellectual laziness, a belief that there’s no need for critics to come up with better reforms, because Obamacare will ‘collapse under its own weight,’ relieving them of that responsibility.” But it’s clear now that’s not going to happen, he adds. “And that makes the development of a credible, market-oriented health-reform agenda more urgent than ever.”
Well, don’t hold your breath.
The Affordable Care Act was written and enacted by Democrats — with a few exceptions — and that’s one of its main weaknesses: If Republicans had helped shape and pass the law, they probably wouldn’t have spent the last four years attacking and undermining it. They now have at least 10 months left to criticize the law without having to take any serious action to replace it. Don’t expect them to squander the opportunity.
By: Peter Weber, The Week, February 26, 2014
“The Insurance Company Bailout That Republicans Love”: The GOP Has Found A Way To Be Even More Hypocritical Than Before
Remember when Republicans found insurance company bailouts outrageous? Good, because the Republicans don’t.
On Friday, the Obama Administration announced proposed payment rates for Medicare Advantage plans, the private insurance option within Medicare. The federal government pays insurers a fixed fee for each senior they enroll. The program’s goal is to provide seniors with more options and, ideally, foster competition that will lead to better management of care both within the traditional program and for those who get private insruance instead. But, for a long time, experts have said the federal government is actually paying the insurers too much—in other words, more than it costs to provide the same coverage through traditional Medicare.
In the late 1990s, when the program was known as “Medicare+Choice,” the Clinton Administration attempted to rectify this by reducing insurer fees. But experts subsequently found the government was still paying the plans too much, so the Obama Administration and its allies included additional Medicare Advantage cuts in the Affordable Care Act—leaving discretion over the exact rates to the Department of Health and Human Services and its actuaries. On Friday, HHS revealed its calculations for next year’s rates, based in part on projections for how health care spending for the country as a whole is changing.
The payment formula is complicated and even now, with a weekend to digest the announcement, analysts aren’t entirely sure how insurers would react and what that would mean for seniors in the plans. (As Phil Galewitz of Kaiser Health News reports, many independent experts seem to think the effects would be pretty minimal.) But insurers, who say better benefits account for whatever extra funds they get, have warned that cuts of virtually any magnitude will force insurers to offer less generous benefits, charge higher premiums, or withdraw from the program altogether—as some of them did in the late 1990s, following those cuts the Clinton Administration implemented. The insurers are lobbying the administration to use its discretion to reduce the cuts or, ideally, eliminate them altogether. If you live in Washington and have seen those ubiquitous “Seniors are Watching” advertisements on billboards and buses, you have some idea of how strongly the insurers feel about this.
But insurers aren’t the only ones making a fuss. Republicans are too—and they have been for a while. As you may recall, Republicans pounced on the new Medicare Advantage cuts as proof that Obamacare was bad for seniors—in the 2010 midterms and then, again, in the 2012 presidential election. It was pure political gold, since seniors (particularly white seniors) were among those most skeptical of Obama and his health care law in the first place. Of course, House Republicans voted for the very same cuts when Paul Ryan’s budgets had them. But that didn’t stop Republicans from attacking the cuts then—and it’s not stopping them now. “ObamaCare has already caused millions to lose the healthcare plans they liked, and now it is directly harming seniors who rely on the care they have through Medicare Advantage,” Eric Cantor, the House Majority Leader, said on Friday. “Our nation’s grandparents should not have to wake up tomorrow worried they no longer can access the care they want because of Obamacare.”
With this latest salvo, however, Republicans have actually found a way to be more hypocritical than before. For the last few weeks, Republicans and their allies have been in high dudgeon about Obamacare’s so-called risk corridor program, in which the federal government will subsidize insurers that take heavy losses for the next three years. Republicans and their allies have decried risk corridors as a “taxpayer bailout” of the insurers. But the policy justification for risk corridors is straightforward and, even to some conservatives, incontrovertible: They will ease the transition to a newly regulated insurance market, so that it’s possible to provide universal coverage through a system of private plans. And unlike the additional Medicare Advantage payments, the risk corridor program might actually end up being a net boon to the taxpayers, since the government also shares in unexpected insurer gains. (The Congressional Budget Office has actually predicted as much, though, as with many such projections, there’s a lot of uncertainty there.)
Maybe Republicans think that’s insufficient reason to pay the Obamacare insurers money—fine. But then how can they simultaneously insist government keep paying higher fees to Medicare insurers, given the case for them is a lot more dubious?
Congressional Democrats haven’t exactly covered themselves in glory over this issue. New York Senator Charles Schumer was among the Democrats who signed a bipartisan letter to HHS, urging the administration not to harm beneficiaries with payment reductions, though the senators stopped short of calling for outright reversal of the cuts. But the current Republican position makes no sense whatsoever, unless the GOP’s real priorities are (a) opposing anything the Obama Administration supports (b) sucking money away from the traditional, government-run Medicare program (c) stopping programs and spending that benefits the non-elderly uninsured. Readers can decide for themselves which of those explanations make the most sense—or whether, perhaps, it’s all of the above.
By: Jonathan Cohn, The New Republic, Fenbruary 24, 2014
“Republicans Are Losing All Credibility On ObamaCare”: At Some Point, Voters Are Going To Stop Paying Attention To Their Scare Tactics
Even before President Obama signed the Affordable Care Act into law, GOP critics assailed it as a socialist, job-killing overreach indicative of a government run amok. In the years since, we’ve seen no shortage of scare-mongering and hand-wringing about how the law would harm Americans and bring the republic to an ignominious end.
Yet as ObamaCare gradually went into effect, reality began to undercut the thrust of that argument. Remember those terrifying death panels Sarah Palin warned us about? And over the past few months in particular, facts have shot down a handful of the more apocalyptic claims about the law.
In the most recent instance, a report last week from the Congressional Budget Office estimated that ObamaCare would trim the labor force by 2 million full-time jobs by 2017, and by 2.5 million come 2024. Critics seized on that as proof that the law would indeed spook businesses and stifle job growth.
What the report actually showed, though, was not a dearth of jobs, but a dearth of labor. Incentives in ObamaCare that make insurance cheaper and easier to obtain, the report suggested, would encourage some people to retire earlier or work less, thus shrinking the labor pool.
With spin and misinformation flying about, the CBO on Monday made that point clear.
“Because the longer-term reduction in work is expected to come almost entirely from a decline in the amount of labor that workers choose to supply in response to the changes in their incentives, we do not think it is accurate to say that the reduction stems from people “losing” their jobs,” CBO head Doug Elmendorf wrote.
So much for that talking point.
The same CBO report also undercut another meme on the right, that ObamaCare contains a big bailout for insurance companies.
The scuttlebutt involves the risk corridors built into the law, which cap how much insurance companies can make or lose in their first three years on the exchange marketplace. (You can read a more thorough explanation on risk corridors here.) Since taxpayers could theoretically be on the hook for covering the losses of flopping companies, a cadre of Republicans, led by Sen. Marco Rubio (R-Fla.), labeled the provision a “bailout” and vowed to repeal it.
As it turns out, the CBO found that insurance companies would receive $8 billion — but pay back double to the government. In other words, the supposed bailout — which was really just standard actuarial practice to begin with, and not a literal bailout — would actually save the government billions of dollars.
Then there’s the zombie claim that lawmakers and their staffs are exempt from ObamaCare. Last month, Sen. Ron Johnson (R-Wis.) said he was filing suit over that boondoggle, arguing the administration had “exceeded its legal authority” in “arranging for me and other members of Congress and their staffs to receive benefits intentionally ruled out by” ObamaCare.
In truth, the law does offer a unique subsidy to Capitol Hill employees to offset the cost of obtaining insurance through the exchanges. But lawmakers and staffers only qualified for that subsidy because the law, via an attempted GOP poison pill amendment, stripped them of federally subsidized coverage and forced them onto the exchanges in the first place. Even National Review thoroughly debunked the exemption claim.
Republicans also warned that Healthcare.gov’s early glitches exposed the entire law as an unworkable train wreck. Writing in The Hill, Rep. Bill Johnson (R-Ohio) called the problems “catastrophic,” and likened the site to cooked eggs: “You see, you can’t recook eggs!”
Following a massive IT effort though, the site is now running much smoother, and enrollments are surging as a result.
That brings up another ObamaCare bogeyman: the dreaded death spiral.
ObamaCare needs a bunch of young enrollees to offset the cost of enrolling older folks. If not enough young people sign up, premiums for everyone else could spike and the system could crash.
Yet despite the best efforts from some on the right to convince young adults not to enroll — one ad campaign featured a creepy Uncle Sam sexually assaulting young patients — the death spiral, too, was more myth than reality.
Enrollment among young adults has indeed been lower than the administration’s target, but it’s expected to surge as the enrollment deadline nears. And even if the current demographic breakdown remains unchanged, an analysis from the Kaiser Family Foundation determined the consequences “are not as great as conventional wisdom might suggest.” In a worst-case scenario, the report found, the effect on premiums from an unbalanced pool of enrollees would still be “well below the level that would trigger a ‘death spiral.’”
Phew. That’s a lot of debunked arguments. Next thing you know, critics will be trying to falsely claim the law won’t help enough people get coverage. Oh, wait.
Now, the GOP was right to be skeptical of Obama’s claim that everyone could keep their health insurance under ObamaCare. That turned out to not be the case.
But the party’s overall success rate on loaded ObamaCare allegations is terrible, and is only getting worse. The danger is that at some point, voters are going to stop paying attention.
By: Jon Terbush, The Week, February 11, 2014
The Republican response to the State of the Union was delivered by Cathy McMorris Rodgers, Republican representative from Washington — and it was remarkable for its lack of content. A bit of uplifting personal biography, a check list of good things her party wants to happen with no hint of how it plans to make them happen.
The closest she came to substance was when she described a constituent, “Bette in Spokane,” who supposedly faced a $700-a-month premium hike after her policy was canceled. “This law is not working,” intoned Ms. McMorris Rodgers. And right there we see a perfect illustration of just how Republicans are trying to deceive voters — and are, in the process, deceiving themselves.
I’ll get back to “Bette in Spokane” in a minute, but first, is Obamacare “not working”?
Everyone knows about the disastrous rollout, but that was months ago. Since then, health reform has been steadily making up lost ground. At this point enrollments in the health exchanges are only about a million below Congressional Budget Office projections, and rising faster than projected. So a best guess is that by the time 2014 enrollment closes on March 31, there will be more than six million Americans signed up through the exchanges, versus seven million projected. Sign-ups might even meet the projection.
But isn’t Obamacare in a “death spiral,” in which only the old and sick are signing up, so that premiums will soon soar? Not according to the people who should know — the insurance companies. True, one company, Humana, says that the risk pool is worse than it expected. But others, including WellPoint and Aetna, are optimistic (which isn’t a contradiction: different companies could be having different experiences). And the Kaiser Family Foundation, which has run the numbers, finds that even a bad risk pool would have only a minor effect on premiums.
Now, some, perhaps many, of those signing up on the exchanges aren’t newly insured; they’re replacing their existing policies, either voluntarily or because those policies didn’t meet the law’s standards. But those standards are there for a reason — the same reason health insurance is now mandatory. Health reform won’t work if people go uninsured, then sign up when they get sick. It also can’t work if currently healthy people only buy fig-leaf insurance, which offers hardly any coverage.
And what this means, in turn, is that while we don’t know yet how many people will be newly insured under reform, we do know that even those who already had insurance are, on average, getting much better insurance. Since the goal of health reform was to make Americans more secure — to reduce their risk of being unable to afford needed health care, or of facing financial ruin if they get sick — the law is doing its job.
Which brings me back to Bette in Spokane.
Bette’s tale had policy wonks scratching their heads; it was hard to see, given what we know about premiums and how the health law works, how anyone could face that large a rate increase. Sure enough, when a local newspaper, The Spokesman-Review, contacted Bette Grenier, it discovered that the real story was very different from the image Ms. McMorris Rodgers conveyed. First of all, she was comparing her previous policy with one of the pricier alternatives her insurance company was offering — and she refused to look for cheaper alternatives on the Washington insurance exchange, declaring, “I wouldn’t go on that Obama website.”
Even more important, all Ms. Grenier and her husband had before was a minimalist insurance plan, with a $10,000 deductible, offering very little financial protection. So yes, the new law requires that they spend more, but they would get far better coverage in return.
So was this the best story Ms. McMorris Rodgers could come up with? The answer, probably, is yes, since just about every tale of health reform horror the G.O.P. has tried to peddle has similarly fallen apart once the details were revealed. The truth is that the campaign against Obamacare relies on misleading stories at best, and often on outright deceit.
Who pays the price for this deceit? In many cases, American families. Although health care enrollment is actually going pretty well at this point, thousands and maybe millions of Americans have failed to sign up for coverage because they believe the false horror stories they keep hearing.
But conservative politicians aren’t just deceiving their constituents; they’re also deceiving themselves. Right now, Republican political strategy seems to be to stall on every issue, and reap the rewards from Obamacare’s inevitable collapse. Well, Obamacare isn’t collapsing — it’s recovering pretty well from a terrible start. And by the time that reality sinks in on the right, health reform will be irreversible.
By: Paul Krugman, Op-Ed Columnist, The New York Times, February 2, 2014
“Republican Alternative To Obamacare”: Pay More, Get Less, Put The Insurance Companies Back In Charge
Boy, can Democrats have fun with the new Republican alternative to Obamacare. It puts the health insurance companies back in charge and raises costs for almost all Americans. In particular, it substantially raises costs and threatens to cut coverage for the half of all Americans who get health insurance at work. Seniors, the group that Republicans have scared witless about Obamacare, would lose the real benefits they receive under Obamacare. The proposal from three Republican senators is a golden opportunity for Democrats to contrast the specific benefits of the Affordable Care Act (ACA) with what a repeal-and-replace agenda would really mean for Americans’ lives and health.
When it comes to the politics of health care reform, my first adage is “the solution is the problem.” That is because once you get past vague generalities, like lowering costs and making coverage available, to proposing specifics, people will look to see how the proposals impact them personally. This is why health reform is such a political nightmare. Unlike most public policy issues, the impact is very understandable and real.
With the ACA as the law of the land, in analyzing the Republican proposal we must compare its impact to the law it would repeal. The pre-ACA model of health insurance is irrelevant. Here is how the Republican plan would impact people, compared with the ACA:
People who get health insurance at work – bottom line: pay more for worse coverage.
Almost half of all Americans (48 percent), or 148 million people, obtain health insurance at work. The Republican plan would tax 35 percent of the average cost of health insurance benefits at work. This is a big tax increase on working people and is extraordinarily unpopular, as the Obama campaign used to devastating impact on John McCain. And while people would pay more, they would get less coverage, as the GOP plan would allow insurance companies to once again limit the amount of benefits they will pay out in one year and return to the day when employers could offer bare-bones plans.
While taxing health benefits would apply to all employer-provided coverage, the Republicans would give the 30 percent of people who work for businesses who employ fewer than 100 workers a tax credit. That might balance out the increased taxes for some people. However, doing so would create a huge set of economic distortions, as employers might seek to keep firm size under the 100-employee threshold.
Individuals who buy coverage on their own or who are uninsured – bottom line: insurance companies could again deny coverage for pre-existing conditions and offer bare-bones coverage, while the cost of decent coverage would go up for most people.
This is the group that the ACA is most aimed at helping, including the 5 percent of Americans who buy private health insurance and the 15 percent who are uninsured, totaling 64 million people. The ACA offers income-based subsidies to these people when they earn between 100 percent and 400 percent of the federal poverty level (FPL) and enrolls people under 133 percent of FPL in Medicaid, when states agree.
The Republican plan is toughest, in comparison with the ACA, on the lowest-income people and on the higher-income middle class, compared with Obamacare. But many families in between will do worse too.
The Republican plan would wipe out the expansion of Medicaid to people earning less than 133 percent of FPL, a provision the Supreme Court has made optional. It would cut back on Medicaid, ending the federal government’s offer to pay 90 percent of the cost of expanded coverage and replacing that with the federal government paying what it has paid historically, which is between half and three-quarters of the cost of Medicaid, with poorer states getting a bigger share. Crucially, the funding would only be for pregnant women, children and parents with dependent children who earn under the poverty level, as opposed to the ACA’s funding of all adults up to 133 percent of FPL. That means many fewer people covered and states getting less Medicaid money. Republican governors may not complain, but you can bet hospitals will. Adults without dependent children would not be covered by federal Medicaid, which means millions will stay uninsured or lose coverage they now have, unless states pay for coverage without federal support.
For individuals not covered by Medicaid or employees of firms with fewer than 100 workers, the Republican plan would replace the ACA’s sliding-scale subsidies, which now go to 400 percent of FPL, with a subsidy that is the same for everyone of the same age who is under 200 percent of FPL and lowersubsidies for people from 200 percent to 300 percent. In addition, the subsidies would be higher for older people than younger. The Republican plan also would take away the requirements that insurance plans offer decent benefits and free preventive care and charge women the same prices as men for coverage, along with every other consumer protection, with the exception of keeping in place no lifetime caps for covered benefits.
Comparing the value of the Republican plan subsidies vs. the ACA subsidies for the people who would still qualify depends on income, age, and family size. Generally, it appears that the Republican subsidies are much less than the ACA for people under 150 percent of the FPL ($35,000 for a family of four) and much less than the ACA for younger people, but more for older people. However, insurance rates for younger people would go down some at the expense of older people, who insurance companies could charge a lot more than under ACA. And families with incomes above $70,000 for a family of four would lose subsidies entirely.
Seniors and the disabled on Medicare – bottom line: seniors would pay more for prescription drugs and preventive care.
By repealing the ACA, the Republican plan would take away its two concrete benefits for seniors. One is that preventive care services are now free under Medicare (as they are under all insurance). The other is that the ACA is lowering drug prices for seniors by slowly closing the “donut hole,” under which seniors must pay the full cost of prescription drugs even though they are paying premiums for drug coverage. In other words, the Republican plan is simply bad news for seniors, the constituency that they have scared the most about Obamacare… groundlessly.
It is not surprising that Republicans have been reluctant to come up with a replacement for Obamacare. It’s much easier to throw darts – or bombs – at the ACA than to come up with a replacement that meets Republican ideological tenets of less regulation and less government. Any plan that meets the ideological test will be much worse for people in ways they can understand. It is our job to explain it to the public clearly: pay more, get less, put the insurance companies back in charge. This debate is not simply the political game Republicans want to make it. It is about our health and our lives.
By: Richard Kirsch, The National Memo, January 29, 2014