Must-Read: Aaron Carroll: The Republicans’ “American Health Care Act”

Must-Read: Aaron Carroll: The Republicans’ “American Health Care Act”: “I’m trying to describe the bill in a few words as I can manage…

…Their continuous coverage plan could actually make adverse selection worse… [the] healthy… go[ing] without insurance… [and then paying a] one year 30% increase in premiums…. There’s a fair argument to be made that this is Obamacare Lite…. But this is still a big difference from the ACA. The subsidies shift away from the poor to others… Medicaid undergoes a huge sea change in 2020. It’s a bill. It desperately needs a CBO score.

The Republicans’ “American Health Care Act” in as Few Words as Aaron Carroll Can Manage

One Table:

Twenty-Three Talking Points:

• Medicaid:
  • The bill leaves the expansion intact–for now.
  • This bill incentivizes states to sign up as many people as possible so that they qualify for a higher match amount in 2020.
  • In 2020 Medicaid becomes a block grant program
  • Lottery winners are not eligible for Medicaid. They spent a full six pages of the bill discussing this. I have no idea why.
  • Disproportionate hospital payments are restored immediately to states that didn’t expand Medicaid, and to all states in 2020.
• Subsidies and Costs
  • Age bands from 3:1 to 5:1.
  • If continuous coverage lapses for 63 days in a year, charged a 30% premium for 12 months.
  • Subsidies now called tax credits–they were tax credits before). But now they’re not based on how much you earn; they’re based on how old you are.
  • A 27-year-old will get $2000, a 40-year-old will get $3000, and a 60-year-old will get $4000. That’s true if they make $20,000 or $75,000.
    • Non-young poorer people are going to have a much harder time affording insurance.
    • Old rich people are in for a windfall.

*Exchanges:
* No more individual mandate or employer penalty:
* Insurance companies will hate that:
* Adverse selection.
* Made worse ironically by the 30% penalty for late enrollment. Healthy people, once they’re out, simply won’t buy coverage until they’re sick–cause you’ll get the same penalty no matter what. Death spirals much more likely.

• Untouched:
  • Young adults can are still covered by family plans.
  • Guaranteed issue and community ratings.
  • Essential health benefits remain intact.
  • Annual and lifetime limits are still banned.
• Aaron’s thoughts:
  • A reduction in insurance coverage.
  • No deficit reduction—unless the plan is for deep, deep cuts to future Medicaid.
  • Obamacare Lite.
  • It’s a bill. It desperately needs a CBO score.

Five Questions:

1. Why do this?
2. If this is a bill crafted for Reconciliation, what is the follow-on strategy for non-budgetary parts of the system?
3. There is nothing in this bill to make it fit the Byrd Rule requirements for deficit reduction: how can it be fit into the Reconciliation box?
4. Who—besides Republican politicians who have promised to repeal ObamaCare—wants to see this bill?
5. Is this intended to pass? Or is this intended to be blocked by Democrats and RINOs?