Thursday, July 27, 2017

For Non-American Readers of this Blog Interested in the U.S. : The Health Care Debate in the USA made simple (?)

Paige Winfield Cunningham, "The Health 202: Republicans look to chop off just one of Obamacare's three legs," Washington Post (July 27)

[Update 7/28: "Early this morning, lawmakers narrowly voted down a plan to repeal parts of the Affordable Care Act, with John McCain joining two other Republican senators in opposing the “skinny” repeal [JB - see below on this term]. (Watch video of Mr. McCain’s decisive vote.)" -- New York Times via email] .


Obamacare [JB - also known as: "Patient Protection and Affordable Care Act"] is often referred to as a three-legged stool: Americans must buy health insurance, insurers must sell them generous benefits without discriminating and the government provides subsidies to help pay for it all. Using that metaphor, let's consider how Senate Republicans have struggled to pass an Obamacare repeal bill over the past two days.
First, Republicans tried to chop off all three legs with a bill replacing much of the Affordable Care Act. That failed Tuesday night.
Then, they tried to chop off just the first and third legs -- the individual mandate to have coverage and the subsidies -- in a repeal-only bill that failed yesterday.
Now, they're down to a third potential option: Chop off just one leg -- the individual mandate -- and leave the stool lopsided. 
No. 3 Senate Republican John Thune said yesterday that they're "edging closer and closer" to 50 votes for this "skinny repeal" option, my colleagues Juliet Eilperin, Kelsey Snell and Sean Sullivan report. Details are still emerging, and could always change quickly, but the aim is to pass a bill repealing just the ACA's individual and employer mandates, its medical device tax and its public-health fund. Funding for extra Obamacare subsidies for cost-sharing discounts may be attached, too, and the legislation may also retain a provision blocking Medicaid reimbursements from Planned Parenthood clinics. 
Once passed, the bill could be sent to a conference committee where members of the House and Senate could hash out an agreement. Leaders are betting Republican senators who defected on other votes this week would feel enough pressure at that point to support whatever the final measure looks like. Kaiser Family Foundation senior vice president Larry Levitt noted that it could look very different from "skinny repeal:"

Premium subsidies would protect those eligible with “skinny repeal,” but those paying full freight get hosed. Not quite a death spiral.
Of course, if “skinny repeal” is just an effort to get to a conference committee, who knows what ultimately comes out of that process.

If "skinny repeal" actually became law, would Republicans support stabilization funding to avoid premium hikes and a CSR appropriation?
It would be awfully hard for Republicans and President Trump to avoid completely owning the insurance market if "skinny repeal" became law.
But if Senate Republicans voted for this skinny repeal today or tomorrow, they'd be backing policy that would undermine the already shaky individual insurance market, result in fewer covered Americans and drive up premiums.
Here's what is likely to happen under the "skinny repeal" approach: Without the individual mandate to buy coverage, some people -- disproportionately healthy ones -- would opt out of health coverage, worsening the risk pools and driving up premiums. According to new Congressional Budget Office estimates released last night by Senate Democrats, 16 million fewer Americans would have health insurance next year compared to current law, and individual market premiums would increase 20 percent on average (although the proposal would save the government money because fewer people would be enrolling and accessing subsidies).  
"You're talking about cutting one leg off a three-legged stool," Linda Blumberg, a senior health-policy fellow at the Urban Institute, told me. "Keeping the subsidies in place, the stool may be able to rest on the stump and not completely fall over, but you are going to see the effects of that by significantly higher premiums."
Granted, Obamacare's individual mandate hasn't worked as well as everyone originally thought. Many analysts concluded the penalty for failing to buy coverage is just too small, set at either $695 or 2.5 percent of one's income, whichever is higher. That's much less than most people would pay in monthly premiums over the course of a year. Plus, the government has few tools for collecting the penalty -- it can't garnish peoples' wages or have them arrested, for example. It can only draw the penalty from a taxpayer's tax refund, if they have one.
But here's the irony: Republicans say it's essential that they repeal Obamacare because it's destroying the individual insurance market -- but this "skinny repeal" approach wouldn't fix the marketplaces and would probably make them quite a bit worse. Insurers would still be subject to the ACA's sweeping coverage requirements that they offer specific benefits and cover even the sickest, most expensive patients (called "guaranteed issue" and "community rating"), but without the promise the healthy must sign up too.
The irony gets even deeper when you consider that the bare-bones bill would cause premiums to rise, even though Republicans have made lowering premiums a central demand in their quest to repeal the ACA. That's actually why three Senate conservatives -- Sens. Ted Cruz of Texas, Mike Lee of Utah and Marco Rubio of Florida -- said they opposed a repeal bill the House passed in 2015. 
Like the potential "skinny repeal" for which Senate Majority Leader Mitch McConnell (R-Ky.) is currently gauging support, the 2015 House bill would have ditched only a few parts of the ACA -- including its individual and employer mandates, medical device tax, prevention fund and a few other provisions. At the time, Cruz, Lee and Rubio said the House bill didn't go nearly far enough.
“This simply isn’t good enough," the trio said in a joint statement. "Each of us campaigned on a promise to fully repeal Obamacare and a reconciliation bill is the best way to send such legislation to President Obama’s desk. If this bill cannot be amended so that it fully repeals Obamacare pursuant to Senate rules, we cannot support this bill. With millions of Americans now getting health premium increase notices in the mail, we owe our constituents nothing less.”
Indeed, most Republicans do understand the need for an incentive for people to buy coverage to create a functional insurance market. Both versions of the House and Senate bills to replace the ACA contained penalties for those who didn't maintain continuous coverage -- violators would have to pay higher premiums under the House bill and they'd have to wait six months to enroll under the Senate version. And a bill proposed in 2015  a bill proposed in 2015 by Sens. Richard Burr (R-N.C.), Orrin G. Hatch (R-Utah) and Rep. Fred Upton (R-Mich.) also required people to maintain continuous coverage if they wanted protection against being denied coverage or being charged higher premiums based on their health status.

A group of Senate Republicans -- including 27 members still holding office -- submitted a brief to the Supreme Court back in 2012 when the ACA was being challenged as unconstitutional. In it, they argued that the individual mandate is the "heart" of the health-care law, and without it, both the number of uninsured Americans and premiums would skyrocket (Yale's Abbe Gluck explains more here).
And many conservative health policy experts agree repealing only the individual mandate is a crummy idea.
"Having guaranteed issue and community rating without some sort of mandate is structurally a rather dangerous thing to do," Robert Graboyes, a health-care scholar at the Mercatus Center. "It's an invitation to a death spiral."
As for insurers, they're terrified that Republicans are considering "skinny repeal" as a possibility. The Blue Cross Blue Shield Association came out yesterday against "skinny repeal," saying it's "critical" for a health-care bill to include strong incentives for people to obtain health insurance and keep it year-round.
"A system that allows people to purchase coverage only when they need it drives up costs for everyone," BCBS said in a statement.
Democrats, who are mostly standing on the sidelines as Republicans undergo 20 hours of health-care debate this week, are firing hard at the "skinny repeal" idea:
House Budget Dems:
From Sen. Elizabeth Warren (D-Mass.):  

"Skinny repeal" should be called "gut it and run." Voting to destroy insurance markets and kick millions off health care remains immoral.

If the Senate passes "skinny repeal" – which guts the marketplace – premiums will skyrocket. Insurers will quit.
From Sen. Dick Durbin (D-Ill.) 

.@SenateGOP, let’s be clear: voting yes on a “skinny repeal" is giving the Freedom Caucus full rein to destroy our health care system.
House Minority Whip Steny H. Hoyer (D-Md.):

The Senate has rejected repeal & replace & straight repeal. It's time to work together to improve ACA. 

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