“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
“Imminent ‘Death Spiral’ Premature, Over-Hyped”: Young People Are Just Procrastinating On ObamaCare
ObamaCare enrollees are, so far, generally older and therefore potentially less healthy than the general public. And on the flip side, only one-fourth of sign-ups are in the crucial 18-35 year-old age bracket, well below the administration’s roughly 40 percent target, according to new enrollment data released Monday.
Given the top-heavy enrollment figures, critics and skeptics are again raising a doomsday scenario in which an elderly pool of enrollees, without adequate subsidization from healthier, younger people, causes premiums to skyrocket so much the entire system crumbles.
“Hello, Death Spiral,” snarks a National Review headline.
Terrifying, right?
However, the administration expected that young people would procrastinate until the last minute, while older and sicker people would be more motivated to get coverage as soon as possible. People have until the end of March to sign up for ObamaCare before the individual mandate’s penalty kicks in, so assuming that works as something of a metaphorical term paper deadline, there could very well be a surge of young people into ObamaCare in the next couple of months.
Massachusetts’ experience implementing Romneycare in 2006 offers some historical precedent. As an analysis by MIT economics professor Jonathan Gruber shows, the percentage of Romneycare sign-ups in the 19-34 year-old bracket hovered in the low 20s for the first few months before gradually rising into the mid-30s range by the end of the year.
ObamaCare, likewise, saw an eight-fold increase in young adults enrolling in December compared to the two months prior, indicating that young people were indeed waiting until the last minute. Hence Aaron Smith, head of the nonprofit Young Invincibles, whose goal is getting uninsured young people enrolled, says the latest numbers show they “are on the right track.”
The White House is also planning to up its outreach to young people, including a National Youth Enrollment Day on February 15. That should help drive up youth enrollment above its current level.
And even if that effort fizzles, it’s still extremely unlikely the death spiral will materialize if the current enrollment demographics remain unchanged. A December report form the nonpartisan Kaiser Family Foundation concluded that “the financial consequences of lower enrollment among young adults are not as great as conventional wisdom might suggest.” Even in a worst-case scenario where young people comprise 25 percent of the overall pool, Kaiser estimated premiums would rise marginally, or “well below the level that would trigger a ‘death spiral.'”
There are two months of open enrollment left, so proclaiming dire predictions is a tad premature at this point. And even if the supposedly deadly enrollment demographics remain unchanged come April, and premiums go up, it almost certainly won’t imperil the law.
By: Jon Terbush, The Week, January 14, 2014
“There Won’t Be Any Highs Ahead”: Congress Deserves Public’s Contempt For Its Obsession With Destroying Obamacare
Congress is back—and the House has an ambitious plan for the year ahead. OK, an ambitious plan to cement its place in history as the Do-Nothingest Congress of all time.
The House has scheduled all of 97 days in session before the November elections, with many of them being half days or pro forma ones. And Majority Leader Eric Cantor’s memo to his troops outlining the plan for the year ahead made it clear that there is at most a bare-bones agenda, focused like a laser, yet again, on repealing or further sullying and delegitimizing Obamacare. The only possible good news coming out of that is that the obsessive focus on killing Obamacare may provide the excuse for House leaders to extend the debt ceiling without blackmail this time, by convincing their rank-and-file that it is the best way to avoid distractions and keep the focus on the health insurance law.
The obsession with Obamacare, and the near-universal belief among Republican lawmakers and conservative spinmeisters that the law will collapse spectacularly of its own weight, is fascinating.
Remember that when Sen. Ted Cruz incited the shutdown last year over the demand to defund Obamacare, his argument was that this was the last chance before the law was implemented in January—after which it would be impossible to stop it, because so many Americans would be delighted with its benefits. Cruz told Sean Hannity last July, “If we don’t do it [defund Obamacare] now, in all likelihood, Obamacare will never, ever be repealed. Why is that? Because on January 1, the exchanges kick in, the subsidies kick in; … their plan is to get the American people addicted to the sugar, addicted to the subsidies, and once that happens, in all likelihood, it never gets …”
At which point Hannity agreed, saying, “It’s over—it never gets repealed.”
The awful and bumpy rollout of the plan changed all that; now, for Cruz, Hannity, and everyone else in the right-wing echo chamber, there won’t be any highs ahead, or at least the highs and sugar addictions will be overwhelmed by bad drugs and overdoses.
Which view is right? We don’t know for sure, but there is some interesting evidence in the rollout of the Medicare Part D plan in 2005, via an excellent analysis by Georgetown University’s Center on Health Insurance Reform. The report makes clear that there are many parallels between Part D and Obamacare.
First, both plans passed with substantial partisan tension, which tarnished the initial public views of them. Second, both plans created much confusion in the public, with small proportions of Americans having even a basic understanding of what was in the plans and how they would work. Third, both plans had a lot of time after passage and before they actually took effect to prepare for a massive rollout. Fourth, neither had its website ready to roll when the deadline hit, and both had crashes and long delays to gain access. Fifth, even after the websites became more reliable, other problems persisted, including inadequate call centers and inexperienced navigators at the local level who were unprepared with full or sophisticated answers to questions posed by those trying to sign up. Sixth, supporters of the laws issued cautions when they were first unveiled, warning of glitches ahead and asking the public for understanding and help at ameliorating the problems.
Now for the differences. While Medicare Part D was the subject of serious partisan chicanery—the infamous three-hour vote in the House; the conference committee that barred key Senate Democrats from participating, including Senate Democratic Leader Tom Daschle; the “bait and switch” that in the end took out all the parts of the bill that had made Ted Kennedy an initial partner of the Bush administration—once it was law, most Democrats worked hard to make the plan accessible and workable for seniors, as did Democratic governors and state legislatures.
Of course, the opposite is true of Obamacare. Despite yeoman efforts to make the bill bipartisan—months and months of negotiation by Senate Finance Chairman Max Baucus with Chuck Grassley and other Senate Republicans, starting from a framework devised and endorsed by Grassley—it got not a single GOP vote. But after passage, it has received nothing but yeoman efforts to sabotage it, including from a slew of Republican governors denying insurance to the most needy of their constituents simply to stymie the law’s implementation. And whenever a Republican talks about how to make the law work better, instead of blowing it up (Jack Kingston of Georgia comes to mind), he or she is vilified by partisans and their media acolytes.
Second, the mainstream media reported on the glitches in the Medicare Part D plan but did not jump all over them with front-page or highlighted stories, or repeated and lengthy inquests on Sunday talk shows. The opposite has been true of Obamacare, with an added twist that reflects the new economic and political realities for media, as reported in a piece by Maggie Mahar at healthinsurance.org. Mahar investigated a ballyhooed article in the Fort Worth Star-Telegram titled “Obamacare Stirs Anxiety for Thousands.” The cases of those who were purportedly shafted by Obamacare proved to be false or exaggerated, and three of the four cases cited were tea-party adherents who strongly opposed the law, two of whom had never even checked for prices on the exchanges. After a lengthy stonewall by the paper’s editors, it became clear that no one had fact-checked the piece, which was written by a reporter with no expertise in health policy, under a tight time frame, assigned by an editor who only wanted bad news, not any stories of those who had been helped by the new law. This is more a case of underresourced news outlets eager to report bad news than bias, but it reflects the tougher climate for a law that affects far more people in far more ways than Part D did.
Eight years after its rocky rollout and deep public skepticism, the Medicare Part D plan is widely popular. I have no idea if that will be the case with Obamacare—and if achieving popularity takes any length of time, the political damage, in this November election and maybe even in 2016, will already have been done. What I do know is that there are going to be a whole lot of winners under the Affordable Care Act, and a smaller number, but still a significant one, of losers or those caught up in the inevitable upheaval to the health care system.
And I know if your only legislative or policy plan for 2014, in the face of a sluggish economy, a crisis of long-term unemployment, and a host of other short and long-term problems facing the country, is to bet on the spectacular failure of the health care plan, you deserve the public contempt your Congress is receiving.
By: Norm Ornstein, The National Journal, January 8, 2014
“A Gaping Wound In The Republican Psyche”: Obamacare Is No Longer Doomed, It Will Become A Scandal
Obamacare — actual, real, Obamacare, with doctors and cards and everything — has been operational for nearly a week now. It has been … extremely boring. It does not look like Stalinist collectivization. There aren’t even any beheadings. It looks like regular medical insurance, except several million more people now have it than before.
How conservatives will respond next to this mundane new world has become the subject of combative speculation. Greg Sargent predicts Republicans will soon come to terms with the law and begin negotiating for incremental improvements. On the right, Conn Carroll angrily replies that the law’s demise remains “inevitable” and liberals will turn against the law, citing Michael Moore as a harbinger of pro-single-payer liberals who will help Republicans dismantle Obamacare, somehow.
I predict a slightly different outcome than either. Obamacare will neither collapse, nor will Republicans accept its legitimacy, but the nature of their opposition will instead slowly morph. Gleeful predictions of imminent collapse will give way to bitter recriminations at the nefarious tactics used to make the law work. Obamacare will cease to be the something certain to destroy Obama and become something Obama has gotten away with.
In recent weeks, it has begun to dawn on some conservatives that the actuarial death spiral they confidently predicted for years — in which the young and healthy shun the exchanges, leading to sicker and costlier patients and rising prices, in turn driving out the remaining healthy customers — may not actually transpire. It won’t for several reasons, one of them being a set of protections embedded in the law itself called risk corridors and reinsurance, which compensate insurance companies that wind up with a sicker customer base in the first three years of the law’s operation, thus preventing a death spiral.
Republicans, having just learned of these provisions, demand that they be abolished, to hasten the death spirals. Repentant immigration reformer Marco Rubio is at the forefront with a bill to strike them from the law. Obviously Obama would never sign such a bill, but Charles Krauthammer offers a solution: demand he sign it or else refuse to lift the debt ceiling. The program is “a huge government bailout,” argues Krauthammer. This is true in the sense that any cost overrun by a defense contractor is also a huge government bailout — which is to say, it’s not true.
But it feels true, and that is the important thing. The premise that Republicans will seek to alter Obamacare in conservative-friendly ways assumes that the policy design of health-care law is their primary motivating force. Everything about the history of Republican health-care thought suggests the opposite. Just five years ago, Mitt Romney was running on a platform of taking his Massachusetts plan, with its individual mandate, national, provoking only the mildest grumbling on the right.
Obamacare is a gaping wound in the Republican psyche, representing not only the rise of a majority moocher class but a potential symbol of a successful Obama presidency. Health-care reform, George F. Will has ludicrously if representatively declared, amounts to Obama’s “single” achievement. If it lives, it will vindicate his presidency as a liberal Reagan, rather than the reprise of Jimmy Carter (or George W. Bush) Republicans wish him to be.
If and when the law melds into the national fabric, the proximate Republican response will not be to adapt their policy ideas to it, but to denounce it as a kind of stolen law. You can see this spirit creeping out not only in Rubio’s proposal but elsewhere. Eleven Republican attorneys general have denounced Obama’s various administrative maneuvers to make the law functional as illegal. “It was powerful corporate America, with its influential lobbyists, that got an additional year to meet the insurance mandate — when individuals did not,” complains The Wall Street Journal columnist Kimberly Strassel, “It was the unions that got a reprieve from a health-insurance tax — when individuals and small businesses were left to pick up the tab.” The hapless Obamacare is slowly giving way to the devious Obamacare.
In the very long run, Obamacare may become a thing, like Social Security and Medicare, that Republicans initially predict will destroy the fabric of capitalism but eventually accept and then finally swear up and down they will not harm. In the shorter term, it will remain a bloody shirt. Obamacare will be Benghazi or the IRS scandal writ large.
By: Jonathan Chait, Daily Intelligencier, New York Magazine, January 5, 2014
“Can A Cure Be Found For Obamacare Brain Meltdown Syndrome?”: Putting The Lie To The Anti-ACA Talking Heads
As we launch into 2014, I must regrettably report that we have yet to develop a vaccine or cure that can assist those who have contracted the insidious Obamacare Brain Meltdown Syndrome (OBMS)–a tragic illness affecting roughly 50 percent of Americans who now lack all ability to review ACA data with any measure of balance and reason.
While we await the critically needed medical advances and discoveries that can bring relief to the afflicted—assuming such a program has not been ground into the dust as a result of sequestration cuts to medical research—we continue in the attempt to bring actual data to the attention of the long-suffering, in the hope that the rumors, half-truths and outright lies can be retired through the presentation of the facts.
One of the more pervasive rumors, half-truths and outright lies making the rounds these days is the meme that more people have lost their insurance as a result of Obamacare than have gained coverage thanks to healthcare reform.
As the story goes, some five million people have had their insurance cancelled because of the ACA while the numbers of those who have gained coverage currently stands somewhere around two million—and we don’t even know how many of those who have enlisted will actually bother to pay the first premium for their newly acquired insurance policy. Based on these numbers the math is simple—the law has hurt three million more than it has helped.
This line of reasoning makes for a terrific story as it is a tale both easy to understand and clear in its result.
The problem is, the story is clearly not true.
A report out this week from the Minority Staff of the House Committee on Energy and Commerce reveals that 99.8 percent of those who received an insurance cancellation can now either re-up their existing plans for another year, as a result of the changes made in recent weeks, or, alternatively, obtain a catastrophic coverage policy. As a result of these changes, the report finds that about 10,000 Americans —representing 0.2 percent of those who received cancellation notices—will actually find themselves without access to an affordable health insurance alternative.
That said, I recognize that the report was issued by the Democrats on the committee— making the study something less than the best possible authority for those suffering from OBMS. I also recognize that 10,000 people lacking the access they once had to affordable health care insurance are 10,000 people too many.
Accordingly, let’s just pretend that the Minority staff report never happened and that we are still working off the suggestion that five million people really have been left fully exposed as the metric that should be used for comparison.
With that as our comparison point, surely the argument suggesting that Obamacare has hurt more Americans than it has helped can be justified, yes?
Actually, no.
In fact, based on the hard data, we are now able to see that at least 9.4 million Americans have health insurance coverage as a result of Obamacare.
Let’s go to the numbers—
We know that approximately 2.1 million people have purchased a health insurance policy from either a health care exchange operated by the federal government or from one of the 14 state operated exchanges. Indeed, even the harshest ACA critics appear to have accepted this number—although they insist on noting that, somehow, many of these people went to the trouble of buying a policy but will refuse to pay the first premium by January 10th, as required.
While I don’t doubt that there will be a few purchasers who will fall into this category, it would require the most extreme case of Obamacare Brain Meltdown Syndrome to imagine that the number of those who went to the bother of signing up—but won’t pay up—will be statistically significant.
Next, I remind you that, as of November 30, 2013, 3.9 million new participants were enrolled in Medicaid as a result of the program’s expansion. These are 3.9 million who were not previously qualified. As reported by Michael Hiltzik over at the Los Angeles Times and Josh Marshall—using the data that has been compiled by Charles Gaba who has been carefully tracking the Obamacare math (I strongly recommend you review Mr. Gaba’s spreadsheet) since the beginning—the number of Medicaid sign-ups through the end of the year have now risen to a total of 4.3 million.
As you add up these numbers, you quickly arrive at 6.4 million Americans who now have insurance as a direct result of the ACA—a number, while in excess of the 5 million allegedly left without insurance coverage as a result of Obamacare, thereby disproving the meme—does not equal the 9.4 million Americans being served by Obamacare that I suggested earlier.
Clearly, this can only be the math of an Obama loving liberal, yes?
Or might you be missing something? Might that something be the roughly 3 million young Americans who have yet to reach 26 years of age who remain on their parents’ health insurance policy thanks to Obamacare?
Because this provision has been in effect for a few years, those afflicted with OBMS have managed to simply erase this number from their minds as if these young Americans either do not exist or simply do not “count”.
They very much do count as, prior to the ACA, these were precisely the people who were among the least likely to purchase a health insurance policy yet, thanks to the law, now have healthcare insurance. They are also the people who add the badly needed healthy participants to the insurance pools.
Add these people to the mix and you reach 9.4 million Americans with insurance as a result of the Affordable Care Act.
What’s more, the number is probably higher given that that we are not taking into consideration those who are purchasing their individual Obamacare policies off the exchanges by going to their insurance agent or directly to their insurance company. These are the folks who are not qualified for subsidies and, therefore, have no reason to deal directly with the exchange if they choose not to do so.
None of this data, by the way, proves that Obamacare is necessarily working. As I have long noted, success is far more tied to the composition of the insurance pools resulting from the ACA (the ratio of healthy to unhealthy) than it is tied to the raw number of sign-ups. This is data we do not yet have.
What this data does prove is that there are clearly far more Americans benefitting from Obamacare than those who are claimed to be losing coverage as a result of the law. The data also highlights that those with Obamacare Brain Meltdown Syndrome must fight through the fog that has descended upon them and try to face up to the actual numbers as, only then, can we continue a rational conversation about this law.
Until we find that cure for OBMS, we can only hope that those afflicted with this tragic illness will turn to that famous old saw that instructs, “then you will know the truth and the truth will set you free.”
By: Rick Ungar, Op-Ed Contributor, Forbes, January 4, 2014
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