This idea is, to many liberals, perverse. It means that Ryancare doesn’t give the neediest families enough help to afford decent insurance while blowing a substantial chunk of change on families who don’t really need much help.
.. One school of thought holds that a major problem with the Affordable Care Act is that it creates a structure where a hypothetical near-poor person has very little financial incentive to increase his labor market earnings. Ryan’s American Health Care Act restructures the subsidies in a way that doesn’t accomplish anything from a health insurance point of view, but does directly address this labor market issue.
.. But Ryan has a pretty consistent and somewhat metaphysical theory of poverty whereby helping poor people by directly providing them with additional material resources doesn’t count. What he wants is for the government to help poor people become more like middle–class people and raise their labor market earnings.
Hence, in Ryan’s view, all means-tested benefits create what he calls a “poverty trap,” where the existence of benefits reduces the incentive to bootstrap your way up the income ladder.
The House GOP Leadership’s Health Care Bill Is ObamaCare-Lite — Or Worse
The ObamaCare regulations it retains are already causing insurance markets to collapse. It would allow that collapse to continue, and even accelerate the collapse. Republicans would then own whatever damage ObamaCare causes, such as when the law leaves seriously ill patients with no coverage at all. Congress would have to revisit ObamaCare again and again to address problems they failed to fix the first time around. ObamaCare would consume the rest of Congress’ and President Trump’s agenda. Delaying or dooming other priorities like tax reform, infrastructure spending, and Gorsuch. The fallout could dog Republicans all the way into 2018 and 2020, when it could lead to a Democratic wave election like the one we saw in 2008. Only then, Democrats won’t have ObamaCare on their mind but single-payer.
.. It is likely that the number of states participating, and the number of people enrolled in the Medicaid expansion will be higher after “repeal” than before.
.. Currently, Congress matches states’ spending on their Medicaid programs. When a state spends $1 on its program, Congress contributes between $1 and $3. This creates a pay-for-dependence incentive. It encourages states to expand both enrollment and benefits far beyond what they would if states bore the full marginal cost.
.. Just as ObamaCare’s Medicaid expansion creates incentives for states to expand their programs to able-bodied adults, while reducing access to care for the aged, blind, disabled, children, and pregnant women, the House leadership bill would create (or preserve) an incentive to expand enrollment to less vulnerable populations while cutting benefits for more vulnerable populations.
.. ObamaCare’s community-rating price controls literally penalize insurers who offer quality coverage to patients with expensive conditions, creating a race to the bottom in insurance quality.
.. The leadership bill would modify ObamaCare’s community-rating price controls by expanding the age-rating bands (from 3:1 to 5:1) and allowing insurers to charge enrollees who wait until they are sick to purchase coverage an extra 30 percent (but only for one year).
.. ObamaCare would continue to make it easier for people to wait until they are sick to purchase coverage, and the law would continue to penalize high-quality coverage for the sick.
.. Though they sound like tax cuts, ObamaCare’s tax credits are actually 94 percent government outlays and only 6 percent tax reduction.
.. This means that if the House bill ever makes its way to President Trump’s desk, it could subsidize abortion even more than ObamaCare does.
.. Conservatives deny any similarities between an individual mandate and a tax credit for health insurance. But consider the following. ObamaCare’s individual mandate penalty for single adults is $695 or 2.5 percent of income, whichever is greater. Suppose that instead, Congress had simply enacted a tax with those features, and then come back and provided an equivalent tax credit for anyone who purchases health insurance. The end result would be identical to ObamaCare’s individual mandate. But which would it be, a tax credit or a mandate?
.. The parts of the country that stood the most to gain from ObamaCare swung the most to President Trump.
.. Making health care better, more affordable, and more secure requires first repealing all of ObamaCare’s regulations, mandates, subsidies, and taxes. Next, Congress should block-grant the Medicaid program, giving each state a fixed sum of money that does not change from year to year, combined with full flexibility to target those funds to the truly needy. (If states want to cover less-needy populations, like able-bodied adults, they can pay 100 percent of the marginal cost of that coverage.)
.. Large HSAs would be a larger effective tax cut than the Reagan and Bush tax cuts combined, adding $13,000 to the wages of a typical worker with family coverage. Large HSAs would drive down prices by making consumers cost-conscious at every margin, and would reduce the problem of preexisting conditions by freeing consumers to buy portable coverage that stays with them between jobs.
Paul Ryan’s Health-Care Vise
As with the majority of House Republicans, most members of the Freedom Caucus have only ever served under a Democratic President. They were elected to oppose Obama and everything he stood for and they spent most of his Presidency attacking Republican leaders who they believed thwarted those efforts. They have no experience legislating.
.. An early version of the Ryan plan replaced these subsidies with less generous refundable tax credits, which many conservatives dislike because Americans who pay no taxes would still be eligible for the credits.
.. Ryan’s response was to leave the expansion in place until 2020
.. Proponents of the Medicaid expansion see the deadline as creating a health-insurance time bomb that will detonate in a few years.
.. Health-care reform has long been stymied by the insurance industry. Bill and Hillary Clinton took on the industry in 1994 and were badly defeated. In 2009, Obama decided to buy the industry off by including a provision forcing every American to buy its product—the dreaded individual mandate.
.. Ryan and Trump have insisted they would keep those popular regulations while killing the mandate, which forces the uninsured to pay a tax penalty. Their solution is that the uninsured would pay a penalty to insurance companies. Specifically, insurers would be allowed to charge anyone with a two-month gap in coverage up to a thirty-per-cent surcharge on a new policy. For many Americans, the surcharge in Trumpcare could end up being more than the current tax penalty in Obamacare.
.. When Lyndon Johnson created Medicare he essentially made up and lowballed the long-term costs of the program. Without a true estimate, it was difficult for fiscal conservatives, medical groups, and other opponents to attack the plan, and it sailed through Congress.
.. In 2009, Obama became so frustrated by the C.B.O., whose cost estimates had an enormous impact on the health-care debate, that during an Oval Office meeting he said he didn’t want to hear the C.B.O. mentioned, so his aides referred to it as “banana.”
.. Ryan needed to shape a bill that would survive this process, and as a result, he left out some of conservatives’ most long-standing health-care-policy ideas. (For instance, most conservatives support changing a law that prevents insurance from being sold across state lines, arguing it would make markets more competitive and bring down costs, but Ryan didn’t include the change in his plan.)
.. Ryan has produced a bill that nobody would ever propose as a sane solution to the problems with Obamacare. Its only chance is speed. If Ryan can rush and muscle it through the House and Mitch McConnell can do the same in the Senate, it might end up on Trump’s desk. But the more scrutiny this House bill is subject to, the more likely it is to share the fate of most efforts at health-care reform and die somewhere on its journey to the Senate
Liberals Won the Argument on Healthcare
A 2016 study found the average percent of health insurance paid by employers is 83 percent for single coverage and 72 percent for family coverage. How do you design a plan where the party that’s covering 72 percent of the cost can be removed – the employee is fired, laid off, or quits – and the employee can maintain the coverage until they find a new employer?
.. Health savings accounts? They’re a terrific idea. But a lot of people don’t have good impulse control and don’t save money the way they should. They don’t save for retirement, they don’t save for their children’s college educations, and they don’t save for unexpected expenses.
For the past few weeks, I’ve been joking, “Republicans are set to replace Obamacare’s system of subsidies, where the government gives you money to help pay for health insurance, with a system of refundable tax credits, where instead, the government will give you money to help pay for health insurance.”
.. Klein concludes, “Liberals, in other words, have won the central philosophical argument, and Republicans are reduced to fighting over the mechanics.” He is right, but we shouldn’t be surprised, because the conservative argument is thoroughly unappealing. The liberal argument is “somebody else” should pay for your health care (meaning everyone through taxation). The conservative argument is that you should pay for your health care.
.. Trump’s new skepticism about brokering a deal with Moscow also suggests the rising influence of a new set of advisers who have taken a tougher stance on Russia, including Defense Secretary Jim Mattis and new national security adviser H.R. McMaster. During his first meeting with National Security Council staff, McMaster described Russia — as well as China — as a country that wants to upend the current world order
.. European officials have tailored their rhetoric to appeal to Trump’s business background, including emphasizing the risks of negotiating a bad deal, rather than more nuanced arguments, according to one Western diplomat. Given Trump’s “America First” mantra, foreign officials emphasize how U.S. standing in the world could be diminished by making concessions to Russia instead of focusing on the importance of the U.S. and Europe sticking together to counter Moscow.