The CBO score on the Wealthcare Act has Republican senators pretending to care. (More)
“Few low-income people would purchase any plan”
Republicans’ plan is to shove the working poor off Medicaid and into the individual insurance market. Indeed that’s Avik Roy’s favorite part of the Wealthcare Act. But it won’t work, the CBO concluded, because the small premium subsidies for plans with huge deductibles would make insurance a sucker’s bet:
Under this legislation, starting in 2020, the premium for a silver plan would typically be a relatively high percentage of income for low-income people. The deductible for a plan with an actuarial value of 58 percent would be a significantly higher percentage of income – also making such a plan unattractive, but for a different reason. As a result, despite being eligible for premium tax credits, few low-income people would purchase any plan, CBO and JCT estimate.
A bit of background is helpful. A “silver plan” is an insurance plan that covers 70 percent of a person’s expected health care costs. Obamacare’s subsidies were designed to make silver plans affordable and to limit out-of-pocket costs. The BCRA cuts Obamacare’s subsidies and designs its own subsidies around plans that cover 58 percent of expected health care costs. Those plans, the CBO estimates, will come with deductibles of around $6,000 – which means they would bankrupt many poor people before they ever got through the deductible.
On page 27 of the report, CBO offers an illustrative example. Imagine, they say, a person who makes 75 percent of the poverty line and is currently on Medicaid. The deductible would be more than half their annual income. They would be paying for health insurance that they would destroy them financially if they tried to use it.
So here is what the CBO is saying: The BCRA’s subsidies are too small to make the silver plans affordable for low-income people, and the plans it is trying to make affordable – the ones that cover 58 percent of expected costs – carry such high deductibles that low-income Americans won’t buy them because they won’t be able to afford to use them.
Vox’s Sarah Kliff has the premium breakdown. For a typical individual earning $26,500 per year – about $13.50 per hour – annual premiums-after-subsidies would rise from $900 to $1300 for a 21-year-old, from $700 to $1600 for a 40-year-old, and from $0 to $2000 for a 64-year-old. Those figures for a benchmark plan that covers only 58% of medical costs, typically with an annual deductible of $6000.
Why on earth would a 21-year-old spend over $100/month (or a 40-year-old spend $125/month) for health insurance that he/she couldn’t use without going bankrupt? That equation gets even worse in a state that gets a waiver for “essential conditions,” as those include coverage for preventive care – annual physicals, flu shots, birth control – with no out-of-pocket cost. If your state eliminates those “essential conditions,” they remove the only reason to buy the junk insurance Republicans are pegging as the “benchmark.”
That’s why the CBO estimate that few low-income people would buy insurance. They would be wasting their money.
“You’re not gonna get 49. You’re either gonna get 50 or probably 35”
The net result is that the percentage of uninsured Americans would return to pre-Obamacare days … which is exactly what Sen. Ron Johnson (R-WI) wants:
“I would recommend people go back to what were the conditions prior to Obamacare, embrace those conditions, embrace free markets,” Johnson said. “Get rid of the mandates that have artificially driven up the costs of insurance. We can do this … and solve the problem of preexisting conditions using high-risk models.”
But those high-risk pools never worked and neither the House or Senate versions of the Wealthcare Act put in enough money to make them work. Like “selling insurance across state lines” and “clean coal,” “high risk pools” is a glib conservative lie.
Sens. Susan Collins of Maine, Dean Heller of Nevada, and Rand Paul of Kentucky – two moderates and a conservative – say right now that they would block debate from starting on the bill. That vote could happen as early as Tuesday afternoon.
Conservative opposition to the plan is hardening, because they don’t believe it does enough to repeal Obamacare. Meanwhile, several moderates have expressed doubt, which would also sink the plan, especially now that the Congressional Budget Office projected Monday that 22 million fewer Americans would have health insurance under the plan.
“You’re not gonna get 49 [votes for the bill]. You’re either gonna get 50 or probably 35,” Sen. Lindsey Graham (R-SC) told reporters Monday, adding that the CBO estimates “are going to make it harder to get to 50, not easier.”
So that means the bill is dead?
“All about side deals”
Well, the key word is “pretending.” Most if not all of those currently opposing the bill are merely posturing:
White House and Capitol Hill officials are exploring potential deals to divvy up billions of dollars to individual senators’ priorities in a wide-ranging bid to secure votes for the imperiled GOP health care bill.
A Congressional Budget office score that projected 22 million fewer Americans would have insurance under the plan sent some members fleeing Monday and left the bill in jeopardy of failing to have enough votes to even be called to the Senate floor this week.
But Republicans in the White House and in Congress were pleasantly surprised that the bill included more savings than they expected – and are trying to figure out if they can dole it out for votes.
Negotiations are likely to continue quickly behind the scenes over the next 24 hours and could draw the ire of good government groups and advocates. Republicans hammered Democrats for supposedly crafting Obamacare in secret seven years ago and for handing out goodies to wavering Democratic senators.
But the GOP bill has been roundly criticized for being negotiated and written in secret – and the final terms are leaving even some Republicans queasy.
One Senate aide said that Tuesday would be “all about side deals,” and another person familiar with the discussions said Senate Majority Leader Mitch McConnell had already begun talking about private deals.
I say they’re “posturing” and “pretending to care” because when all the nuts are cracked, they’ll cite some cosmetic change – a few million for health savings accounts, a few million for rural hospitals – as what they need to feel comfortable taking away health care from 22 million Americans to give a giant tax cut to the rich. And that’s what this is all about.
Call your senators. Tell them you oppose this monstrosity. It can’t hurt, and it might help.
Photo Credit: Getty Images
Good day and good nuts