From Obamacare to Ryancare to Don’t Care and maybe Trumpcare

March 15, 2017

From Obamacare to Ryancare to Don’t Care  and maybe Trumpcare

Twenty-Four Million Reasons the G.O.P. Health-Care Bill Is No Good

 By John Cassidy
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Is Ryancare the alternative to Obamacare?

For days, the political world had been waiting nervously for the Congressional Budget Office (CBO) ’s assessment of the House Republicans’ Trump-endorsed proposal to replace Obamacare. On Monday afternoon, when the numbers-heavy report finally appeared, one figure it contained dominated all the others: twenty-four million.

This was the C.B.O.’s estimate of how many fewer people would have health insurance if the Republican legislation—which is called the American Health Care Act—passes. In 2018, the first year that many of the bill’s changes would go into effect, fourteen million “more people would be uninsured under the legislation than under current law,” the report said. The difference “would rise to 21 million in 2020 and then to 24 million in 2026.”

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By anybody’s terms, twenty-four million is a lot of people. It is far larger than the fifteen million that two economists from the Brookings Institution had suggested last week that the C.B.O. might come up with. “To put the 24 million coverage loss in perspective, that reverses the entire coverage gain from the ACA,” one of the Brookings economists, Loren Adler, said Monday on Twitter.

As recently as January, Trump was promising that his Administration would provide “insurance for everybody.” Even for a President whose acquaintanceship with the truth is a casual one, explaining away the figures in the C.B.O. report could be tricky. It was not surprising, therefore, that the White House quickly dispatched Tom Price, the new Secretary of Health and Human Services, to rubbish the C.B.O. analysis. “We disagree strenuously” with the coverage estimates in the report, Price told reporters at the White House. Price insisted that the G.O.P. plan would “cover more individuals at a lower cost.”

Price didn’t provide any numbers to back up this claim. He hasn’t got any. (In fact, on Monday night, Politico reported that the White House’s own internal analysis of the health-care bill projected that twenty-six million fewer people would have coverage over the next decade.) The only thing that the Administration and its allies on Capitol Hill have to fall back on is the vague promise to follow up the A.H.C.A. with a second piece of legislation that would give insurers more freedom to offer cheaper, lower-quality plans, which, in turn, might persuade more young and healthy people to sign up. But that’s a pie-in-the-sky promise. Changing the rules for insurers would require sixty votes in the Senate, which the Republicans don’t have.

The C.B.O. analysis didn’t account for the possibility of insurers being able to offer cheap and lousy plans. The main thing driving its conclusions wasn’t changes to the individual market but the House Republicans’ reckless and deliberate assault on Medicaid, the federal program that provides health care for the poverty-stricken and the working poor. In estimating that twenty-four million people stand to lose their insurance coverage, the C.B.O. said that fourteen million of this total would be accounted for by reductions in Medicaid rolls.

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Any Hope for Trumpcare?

It is important to understand how this estimate was arrived at, and why it is reasonable. Under the Affordable Care Act, the federal government lifted the income threshold for Medicaid eligibility to nearly a hundred and forty per cent of the poverty line. At the same time, Washington also promised states, which administer Medicaid, that it would pay ninety per cent of any costs entailed in this expansion. Thirty-one states, including sixteen that now have Republican governors, took the feds up on this offer. The G.O.P. bill would end the Medicaid expansion in 2020—sooner, possibly, if the White House accedes to demands from ultra-conservative groups. The legislation would also change the way the rest of the Medicaid system is financed, shifting to a “block grant” model in which Washington would pay a fixed amount to the states for each recipient.

As a result of these changes, the C.B.O. report said that “some states would discontinue their expansion of eligibility, some states that would have expanded eligibility in the future would choose not to do so, and per-enrollee pending in the program would be capped.” The end result would be a big drop in enrollment and also a big drop in spending—eight hundred and eighty billion dollars over ten years. “By 2026, Medicaid spending would be about 25 percent less than what CBO projects under current law,” the report says.

The drop in spending on Medicaid helps explain why the C.B.O. estimated that the G.O.P. reform would reduce the deficit by three hundred and thirty-seven billion dollars—a fact that some Republicans seized upon. But why, you might ask, would the deficit be reduced by just three hundred and thirty-seven billion dollars over ten years when spending on Medicaid would fall by eight hundred and eighty billion dollars? The answer is that the bill would take most of the money that is saved from reducing Medicaid and hand it out to rich people in the form of tax cuts. The legislation would abolish the 3.8-per-cent Medicare tax on investment income and the 0.9-per-cent surtax on ordinary income that the A.C.A. applied to people who make more than two hundred and fifty thousand dollars a year. According to the C.B.O., getting rid of these taxes and some annual fees that the A.C.A. imposed on insurers would reduce revenues by five hundred and ninety-two billion dollars over ten years.

If the Republicans really wanted to fulfill Trump’s promise of insuring everybody—or, at least, preventing a big fall in insurance rates—they could have taken the five hundred and ninety-two billion dollars and used them to maintain the Medicaid expansion. Or to enlarge the new tax credits they want to offer for the purchase of individual insurance, which, in some cases, would be much smaller than the subsidies offered under Obamacare.

And I mean much smaller. In a table at the end of its report, the C.B.O. provided some “illustrative examples” of how different types of people might fare under the new system. Take a single sixty-four-year-old with an annual income of twenty-six thousand five hundred dollars. Under Obamacare, after receiving a generous federal subsidy, this person would pay seventeen hundred dollars in annual premiums. Under Trumpcare, or Ryancare, or whatever we want to call it, this person would pay fourteen thousand six hundred dollars. That’s an increase of twelve thousand nine hundred dollars!

To be sure, the way the new system would be set up, not everybody would be a loser. For example, a single forty-year-old with an annual income of sixty-eight thousand two hundred dollars could end up saving more than four thousand dollars a year, according to the C.B.O.’s figures. But, in general, people would pay more, at least in the early years after the measure goes into effect.

In the first few years, as some healthy young people drop their insurance plans because they are no longer mandated to purchase them, premiums would go up fifteen or twenty per cent, the report says. After 2020, average premiums could start dropping, and by 2026 the C.B.O. projects they would be ten per cent lower than under the current law. But that would mainly be because insurers would be offering cheaper, crappier plans to young people, and older people would be dropping insurance because they could no longer afford it. It will be interesting to see how Trump tries to sell that prospect to his supporters, many of whom are older and living on modest incomes.

John Cassidy has been a staff writer at The New Yorker since 1995. He also writes a column about politics, economics, and more for

10 thoughts on “From Obamacare to Ryancare to Don’t Care and maybe Trumpcare

  1. Republican officials have been at a complete loss for how to handle the Congressional Budget Office’s (CBO) blockbuster report estimating that their plan to replace Obamacare would leave an additional 24 million Americans uninsured by 2026. Many are staying silent. Others have tried, unconvincingly, to wave it off. House Speaker Paul Ryan has mysteriously decided to embrace the results, which seems about as wise as a hiker trying to fend off a grizzly by hugging it.

    Paul Ryan denied that the report says what it says. “This report confirms that the American Health Care Act (AHCA) will lower premiums and improve access to quality, affordable care,” said Ryan in a statement released on Monday. “CBO also finds that this legislation will provide massive tax relief, dramatically reduce the deficit, and make the most fundamental entitlement reform in more than a generation.” His colleague, House Majority Leader Kevin McCarthy, took a similar tack. “This report by the CBO confirms that this first phase of health reform, the American Health Care Act, uses conservative and free-market principles that will empower Americans with access, choice, and affordability.” Spin is part of politics, but this goes beyond a simple slant or an overly rosy picture. To say that the CBO report shows that the AHCA will “improve access” or “empower Americans” is to brutalize the English language.

    Instead of defending the bill on its merits, Ryan and McCarthy have taken to vaguely proclaiming that it is offering “freedom” and “choice” to consumers. Perhaps, in a world where insurance companies are free to offer plans without mandated coverage areas, those older people will have greater “choice” and “freedom.” But only if those words are empty of any real meaning. One can’t reduce freedom to choice when those choices are bounded and circumscribed by income. A family that can’t afford health insurance hasn’t “chosen” to go without it; a person who lacks options for decent housing isn’t exercising his “freedom” when he is forced into a slum. Given what we know about the Republican health care bill, Ryan and McCarthy’s invocation of “access” is akin to praising the market for giving the wage laborer access to an expensive car or a mansion. For Republicans, basic access to health care will become another luxury good. Except not having an Audi or seaside estate won’t kill you, while not having insurance might.

    In addition to Trump and his broken promises, Paul Ryan insisting that we trust him, and not our lying eyes. But no politician who wants to stay in office would defend this bill on its merits. Which means its advocates, well-aware of its dire outcomes for low- and moderate-income people, have to obfuscate. Passing this bill as-is would screw congressional Republicans almost as much as it would screw the older people who voted them into office. A tweak here or there won’t get the party the votes it needs. Republicans will have to try a different approach, perhaps one that allows them to meet any of their stated health care goals. Or let the bill dies.

  2. For those interested in the intricate aspect of US health care debate, here is a perspective (from Trump’s administration) drastically different from the article above:

    The notion that the ability to maintain health and enhance longevity is not limited by ones’ budget, gene, luck, and pervasive mortality is the biggest lie currently propagated by the faithless progressive. Rich people die only slightly better than average when their life are extended a few more years in a 5-star hospital luxurious (death) beds. What is more consequential than achieving health care pure equality is preventing deterioration of a culture (such as US culture) to that of time-proven disasters such as totalitarian under communism, its lighter version socialism, or Islamism. The rest thereafter, when individual liberty is secured, is the salvation that one can find only through religions or some enlightened faiths at individual level.

  3. Obamacare is too popular to be strangled by right-wingers in the USA?
    (just like Medicare and Social Security in the USA, Medicare in the various Canadian provinces, and the NHS in England)

    As a public service, my lecture of the National Healthcare System has been placed on YouTube :

  4. The whole idea of any health plan is a leftist idea. In fact, it is socialism. The truly rightist idea is to let them die if they can’t afford health insurance. This is not a left-right thing, and certainly has nothing to connect with communism or Islamism. Only an idiot will think of this as such. No wonder Trump “love the poorly educated.” The main opposition to Trumpcare isn’t liberals or moderates. It’s the conservatives. Republicans are fighting among themselves. Democrats are relatively silent.

    Trump’s central argument for repeal and replace Obamacare is that the Affordable Care Act is “imploding,” so some kind of radical change is necessary. Obama himself didn’t think Obamacare was perfect, and neither did the vast majority of Democratic Party legislators who voted for it. Over time, Republicans could make various modifications to the law, and even find bipartisan support for some of them. But the notion of “implosion” has given the Trump/Ryan campaign for a massive rewrite a sense of urgency that, according to the CBO, is basically unwarranted.

    Underscoring the push-pull problem GOP leaders face in winning votes, moderates feel the tax credits are too stingy, especially for low earners and older people. They oppose accelerating the phaseout of the Medicaid expansion and are unhappy with long-term cuts the measure would inflict on the entire program. Terminating the Medicaid expansion in 2020 and not 2018 “is sacrosanct to me,” said moderate Rep. Tom MacArthur, R-N.J. In a new complication, Sen. Charles Grassley, R-Iowa, said the measure lacked the votes to pass in the Senate, where Republicans hold a precarious 52-48 majority. That left House Republican members angry over being asked to take a politically risky vote for legislation likely to be altered. Moderates “don’t like the idea of taking a vote in the House that may go nowhere in the Senate,” said Rep. Charlie Dent, R-Pa.

    House Speaker Paul Ryan, R-Wis., declined to commit to bringing the measure to the House floor next week, a fresh indication of uncertainty. Republican leaders have repeatedly said that was their schedule, but opposition mushroomed after a congressional report concluded this week that the measure would strip 24 million people of coverage in a decade. Ryan told reporters that GOP leaders could now make “some necessary improvements and refinements” to the legislation, reflecting an urgency to buttress support.

    How Trump and Ryan going to pull this out, I do not know. I have to wait and see. As for now, in my opinion, the bill is as good as dead.

    • //The whole idea of any health plan is a leftist idea.

      Health Benefit Plan through employment is a reward for work. Insurance itself encompasses a notion of risk sharing. Many Christians refusing to accept Obama Plan (which should be more appropriately termed Romney Plan) came up with their own risk-empathy sharing scheme to fulfill Obama Plan requirement. Health Plan itself has nothing left or right in ideal.

      What I see is difficulty in managing complexity. I have read that there was an isolated native group in Papua New Guinea that does not have words for numbers greater than 10, as 10 is the limit of our fingers. So, when they barter, they would have barter system for 1-10, and then a bunch.

      I guess, for myself, this complexity became an idea of a bunch, Sander’s like Universal HealthCare. For some, in my wife’s case, it is each managing their own health, like each housewife figure how much to pay for something in the pasar. Forgive my ignorance, laziness, and inability to manage complexity. In this case, we prefer to depend on my empathy.

      I voted for Bernie Sanders.

    • //The whole idea of any health plan is a leftist idea.
      @LaMoy, Perhaps you are right in that we narrow Health Plan to LBJ’s Medicaid and Medicare.
      In many ways, LBJ’s great society is indeed left-leaning. LBJ’s great society and Trump’s “Make America Great again” is just so different.
      I guess LBJ meant a lot more for yourself personally, as you fought a war during LBJ’s time. I teared up when I first visited LBJ’s library at UT Austin a decade ago, as a pendatang. It made me realize Obama is hardly progressive.

      It is just so strange that each of us are wired so differently that we each are more receptive towards different perception. I am thinking of @Shiou as I wrote the last statement.

  5. ObamaCare is too popular and Trump’s American Healthcare is disintegrating?

    Well, here are what Trump said and what Foxnews reported today:

    Granted you trust neither Trump’s words nor Foxnews, the verdict that matters is that what transpires in the next few weeks.

    Btw, I hope the change mentioned is about how to re-install life-time cap for health care as a way to enable some health plans that are aimed to lowering the premium. Most people who are dying do not want to put all their hard-earned money to cure themselves, and rationally want to spend some of the money for either their kids or other worthwhile causes — it makes no sense when you have a health plan, then you want to have no lifetime limit.

  6. The idea that healthcare for some so called conservatives is not a “right” boggles the mind. I guess that life, liberty and the pursuit of happiness is only applicable if you have the cash.

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