Trump riding herd on Congress to pass Obamacare repeal

The House health care bill, dubbed the American Health Care Act (AHCA), is taking heat from all sides, perhaps a sign that the House Republicans who wrote the plan are in the area of the target.

Consider the facets of opposition:

  • Three Senate conservatives, echoing the House Freedom Caucus, argue for "full repeal" rather than "Obamacare lite." 
  • Several conservative groups, including Heritage Action and Americans for Prosperity, "issued scathing statements highly critical of" the House plan.
  • Four Senate Republicans are protesting "inadequate protections for Medicaid expansion programs."
  • The Washington Post says there are "so many awful things about this bill that it's hard to fit them all into one post."
  • Newsweek pulls the alarm on "potentially dire consequences for many Americans," while other sources call the bill "a big tax cut for the rich."
  • House Democratic leader Nancy Pelosi (D-Calif.) says President Trump "doesn't even have the faintest idea of what he's talking about," while Senate minority leader Chuck Schumer (D-N.Y.) chimes in that "Democrats will fight tooth and nail."

Among other details in what amounts to a modification of the existing Obamacare law, the House bill would:

  • Phase out the Obamacare Medicaid expansion by 2020.
  • Replace the Obamacare subsidies with age-based, income-limited tax credits.
  • Repeal the mandates but add a one-time 30% premium surcharge for those who had previously failed to buy insurance.
  • Increase the allowable premium for "older customers" to five times that of younger customers, from Obamacare's three times.
  • Cut "more than 20 taxes enacted under" Obamacare, "saving taxpayers nearly $600 billion over the next decade.

Investors.com complains that if "this is the Republicans' idea of an ObamaCare replacement plan, it would be better to leave ObamaCare in place, and let Democrats take the blame when it inevitably fails."

On the way to that conclusion, Investors notes the "good parts" of the House plan – repeal of Obamacare's taxes and mandates, expanded Health Savings Accounts and replacement of Obamacare's "Rube Goldberg subsidy scheme."

Where Investors has a big problem, however, is with the House plan's new scheme for covering the uninsured:

But the biggest problem with the GOP plan is that [it] preserves the beating heart of ObamaCare – the "guaranteed issue" mandate.

... The healthy would still have a powerful incentive to game the system, knowing they can wait and buy insurance until after they get sick.

So, in an attempt to prevent this gaming, [the] GOP plan replaces ObamaCare's straight-out individual mandate with a more backhanded one. Instead of paying an income-based penalty to the IRS for not having insurance, people would pay a 30% premium surcharge to insurance companies.

…Under the Republican plan, a healthy person could avoid buying coverage for years without penalty. Then, after he gets sick, he could buy insurance – guaranteed, and at an at artificially low premium – and pay only a modest one-time surcharge.

Avik Roy, writing at Forbes.com, commends the House plan for improvements to the "dysfunctional" Medicaid system, including a last-minute tweak that would preserve "the 90 percent federal match rate past 2020 for people who had signed up for the expansion prior to that year."

But concerning the 30% premium surcharge, Roy adds:

While 30 percent represents an approximate average of the additional health risk of late enrollees, the 30 percent provision incentivizes those who face much higher costs to sign up, forcing insurers to cover them at a loss. This seems like a recipe for adverse selection death spirals.

Roy also critiques the AHCA's "steep benefit cliff" for Medicaid enrollees:

AHCA creates a steep benefit cliff between those on Medicaid (subsidizing approximately $6,000 per patient per year), and those just above the poverty line who will get tax credits of about $3,000. People just below poverty will be strongly disincentivized to make more money, effectively trapping them in poverty.

The Washington Examiner suggests another cliff – that the 2020 repeal of the Medicaid expansion will come in a presidential election year.

As such policy details and dates are debated in the House and the Senate, we edge closer to finally putting a sizeable dent in Obamacare.

The harsh reality of repeal is that Obamacare has been taking root for seven years, and that the extraction process will be protracted and fraught with peril and hysteria from the other side. 

The Trump team is working hard to make this first step of repeal a reality:

  • The president tweeted that the "wonderful new Healthcare Bill is now out for review and negotiation"
  • Vice President Pence said the House bill is a "work in progress" and "is the framework for reform" and that "we are certainly open to improvements and to recommendations in the legislative process."
  • Pence also "warned the GOP, 'this is the bill' backed by President Trump."
  • Senate majority leader Mitch McConnell (R-Ky.) called the House bill "a dramatic improvement over the status quo" and added that he could call the House bill for an early April vote, since "lawmakers would have sufficient input as an Obamacare replacement measure churns through House committees beginning Wednesday."
  • Health and Human Services secretary Tom Price "says the bill is just one of three phases," to be followed by a "regulatory overhaul" and "additional legislation to accomplish things that can't be done through the reconciliation process."
  • Senator John Thune (R-N.D.) said "he believes Republican in the Senate will provide the 51 votes needed to pass the measure because it will be the only opportunity to end Obamacare and fulfill a years-long GOP pledge.
  • President Trump says the House bill is "consistent with guidelines he had set out for [the] long-elusive goal of undoing the law."

And the president is riding herd on Congress to get the job done:

There's going to be no slowing down, there's going to be no waiting and no more excuses by anybody.

The House health care bill, dubbed the American Health Care Act (AHCA), is taking heat from all sides, perhaps a sign that the House Republicans who wrote the plan are in the area of the target.

Consider the facets of opposition:

  • Three Senate conservatives, echoing the House Freedom Caucus, argue for "full repeal" rather than "Obamacare lite." 
  • Several conservative groups, including Heritage Action and Americans for Prosperity, "issued scathing statements highly critical of" the House plan.
  • Four Senate Republicans are protesting "inadequate protections for Medicaid expansion programs."
  • The Washington Post says there are "so many awful things about this bill that it's hard to fit them all into one post."
  • Newsweek pulls the alarm on "potentially dire consequences for many Americans," while other sources call the bill "a big tax cut for the rich."
  • House Democratic leader Nancy Pelosi (D-Calif.) says President Trump "doesn't even have the faintest idea of what he's talking about," while Senate minority leader Chuck Schumer (D-N.Y.) chimes in that "Democrats will fight tooth and nail."

Among other details in what amounts to a modification of the existing Obamacare law, the House bill would:

  • Phase out the Obamacare Medicaid expansion by 2020.
  • Replace the Obamacare subsidies with age-based, income-limited tax credits.
  • Repeal the mandates but add a one-time 30% premium surcharge for those who had previously failed to buy insurance.
  • Increase the allowable premium for "older customers" to five times that of younger customers, from Obamacare's three times.
  • Cut "more than 20 taxes enacted under" Obamacare, "saving taxpayers nearly $600 billion over the next decade.

Investors.com complains that if "this is the Republicans' idea of an ObamaCare replacement plan, it would be better to leave ObamaCare in place, and let Democrats take the blame when it inevitably fails."

On the way to that conclusion, Investors notes the "good parts" of the House plan – repeal of Obamacare's taxes and mandates, expanded Health Savings Accounts and replacement of Obamacare's "Rube Goldberg subsidy scheme."

Where Investors has a big problem, however, is with the House plan's new scheme for covering the uninsured:

But the biggest problem with the GOP plan is that [it] preserves the beating heart of ObamaCare – the "guaranteed issue" mandate.

... The healthy would still have a powerful incentive to game the system, knowing they can wait and buy insurance until after they get sick.

So, in an attempt to prevent this gaming, [the] GOP plan replaces ObamaCare's straight-out individual mandate with a more backhanded one. Instead of paying an income-based penalty to the IRS for not having insurance, people would pay a 30% premium surcharge to insurance companies.

…Under the Republican plan, a healthy person could avoid buying coverage for years without penalty. Then, after he gets sick, he could buy insurance – guaranteed, and at an at artificially low premium – and pay only a modest one-time surcharge.

Avik Roy, writing at Forbes.com, commends the House plan for improvements to the "dysfunctional" Medicaid system, including a last-minute tweak that would preserve "the 90 percent federal match rate past 2020 for people who had signed up for the expansion prior to that year."

But concerning the 30% premium surcharge, Roy adds:

While 30 percent represents an approximate average of the additional health risk of late enrollees, the 30 percent provision incentivizes those who face much higher costs to sign up, forcing insurers to cover them at a loss. This seems like a recipe for adverse selection death spirals.

Roy also critiques the AHCA's "steep benefit cliff" for Medicaid enrollees:

AHCA creates a steep benefit cliff between those on Medicaid (subsidizing approximately $6,000 per patient per year), and those just above the poverty line who will get tax credits of about $3,000. People just below poverty will be strongly disincentivized to make more money, effectively trapping them in poverty.

The Washington Examiner suggests another cliff – that the 2020 repeal of the Medicaid expansion will come in a presidential election year.

As such policy details and dates are debated in the House and the Senate, we edge closer to finally putting a sizeable dent in Obamacare.

The harsh reality of repeal is that Obamacare has been taking root for seven years, and that the extraction process will be protracted and fraught with peril and hysteria from the other side. 

The Trump team is working hard to make this first step of repeal a reality:

  • The president tweeted that the "wonderful new Healthcare Bill is now out for review and negotiation"
  • Vice President Pence said the House bill is a "work in progress" and "is the framework for reform" and that "we are certainly open to improvements and to recommendations in the legislative process."
  • Pence also "warned the GOP, 'this is the bill' backed by President Trump."
  • Senate majority leader Mitch McConnell (R-Ky.) called the House bill "a dramatic improvement over the status quo" and added that he could call the House bill for an early April vote, since "lawmakers would have sufficient input as an Obamacare replacement measure churns through House committees beginning Wednesday."
  • Health and Human Services secretary Tom Price "says the bill is just one of three phases," to be followed by a "regulatory overhaul" and "additional legislation to accomplish things that can't be done through the reconciliation process."
  • Senator John Thune (R-N.D.) said "he believes Republican in the Senate will provide the 51 votes needed to pass the measure because it will be the only opportunity to end Obamacare and fulfill a years-long GOP pledge.
  • President Trump says the House bill is "consistent with guidelines he had set out for [the] long-elusive goal of undoing the law."

And the president is riding herd on Congress to get the job done:

There's going to be no slowing down, there's going to be no waiting and no more excuses by anybody.

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