On Health Care, Republicans Are Courting A Revolt
Corey Uhden, Politics Contributor
You would be hard-pressed to find a better example of what passes for excitement in Washington D.C. than watching the eager anticipation of the Congressional Budget Office’s (CBO) Cost Estimate of the American Health Care Act.
Observers declared this report would “decide the fate” of the health care bill backed by President Trump and party leaders in Congress. In a way, they’re right - a bill can only be subject to the rules of reconciliation if it will not add to the national deficit over a ten year window. When the CBO finally analyzed the Democrats’ 2009 health care bill and concluded it would not significantly impact the budget, Republicans, led by a relatively low-profile Member of Congress named Paul Ryan, denounced the score. They said it was the result of “smoke and mirrors,” a series of “gimmicks” built into the bill to get a more favorable score than it deserved. Remember that as Ryan is now the Speaker of the House and it’s his health care bill facing the rigors of the legislative process.
Ryan says he’s “encouraged” by the CBO report this time. The office found that the bill as written would reduce deficits by $337 billion over the ten year window. It further found that it would stabilize the individual insurance market and result in premium decreases of around 10% by 2026, starting in 2020. In the meantime, premiums could increase by as much as 20%. CBO’s analyses have been wildly off the mark on health insurance costs and enrollment targets, by as much as 24 million in 2016, so keep that in mind when you hear that the CBO further found that the net result of the bill if it becomes law is that 14 million fewer people will be insured in 2018 and 24 million fewer people would have coverage in 2026. That estimate so easily becomes “24 million will lose coverage” it is hard not to imagine voters and politicians will quickly internalize this talking point and use it to bludgeon the bill’s supporters.
However, the score is the result of a giant gimmick: the tax credits are arbitrary and insufficient. No one can explain why a 50 year-old making $30,300 a year (200% of the federal poverty level) should receive a refundable tax credit of only $3,500. Under current law, their tax subsidy would be $13,500. The Republicans appear to be meeting one coverage target, incentivizing young people to purchase health insurance, while effectively locking millions of lower-income, older residents out of the market altogether. While Republicans aim to eventually create the environment for more affordable insurance, including plans equal to the tax subsidy, most older Americans don’t have much of a choice. As we age, our bodies deteriorate and we need more coverage than we did at 30 or 40. That is why it costs more to insure older people and why their premiums are higher. In the CBO’s estimation, “premiums for older people could be five times larger but the size of the tax credits would only be twice the size of the credits for younger people.” The result is a stabilized health insurance market, but at what cost?
Republicans promised to repeal Obamacare, but their constituents are benefiting from it. The people that would be most negatively impacted by repeal are those between the ages of 40-64 earning less than $75,000 for singles and $150,000 for married couples, also known as their base. Significant cutbacks to Medicaid spending, and the arbitrary, insufficient nature of the refundable tax credits will affect Trump voters the most. As Republicans realize their constituents will pay more, they’re demanding changes. Some wish to make the tax credits more generous by making them contingent on age, income, and location. Not only would that impact the deficit, it would drag the bill much farther in the direction of the ACA. That isn’t sitting well with conservative House members that have already dismissed the proposal as “Obamacare Lite”
The truth is this is probably the best conservatives are going to get. The bill as currently written would repeal Obamacare, reduce deficits, sunset an open-ended subsidy, permanently cap Medicaid, and make room for a debate on ideas that would improve the health care delivery and insurance markets while lowering costs. But the bill as currently written probably won’t pass so there are plenty of changes coming, plenty of “fateful” .pdf reports to anticipate, and plenty of time to trigger a political revolt.
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