Friday, July 28, 2017

Next for Obamacare: Sabotage by the Repugs

Lennart Gabel

Kevin Drum on what comes next:

...I don’t want to pretend that the [medical]exchanges are wonderful. They started off with a crash (remember that?). The subsidies fade out at too low an income. In some areas there aren’t many providers. The website can be difficult to navigate. The low metal levels have deductibles and copays that are too high.

The exchanges account for half of Obamacare. Roughly speaking, Medicaid expansion covers about 10 million people and the exchanges cover about 10 million people. At low incomes, the cost of insurance is extremely modest. 

For the poor, silver plans with CSR subsidies cover about 90 percent of medical expenses, which makes them more generous than most of the single-payer systems we admire so much in the rest of the world. The average subsidized cost of insurance on the exchanges is probably similar to what people in other countries pay in taxes for their universal systems, and the income limits on premiums prevent most people from suffering sticker shock when insurance carriers raise prices. Navigators help people choose the best coverage in their region.

Is it perfect? Nope. Does it suck? Nope. Overall, it’s pretty good. Sure, I’d prefer something simpler, but given the realities of the American health care system, private insurance is what we have to work with. If politics is the art of the possible, Obamacare does a pretty damn good job of delivering what’s possible.

Unfortunately, it turns out there is one fatal problem with the exchanges: they can be sabotaged pretty easily by Republicans. Doing this is so unnecessarily cruel to the poor and working class that I can hardly blame Democrats for not foreseeing this problem, but there you have it. 

Sabotaging Medicaid is hard, but sabotaging the exchanges is easy. And Republicans have given every indication that this is exactly what they plan to do. Their bitterness over a successful law that helps 20 million people is seemingly without bounds.

The LA Times explains how Trump could sabotage Obamacare:

...Officials could stop marketing and outreach efforts that encourage people to sign up during open enrollment periods. They could refuse to enforce the requirement that people buy insurance or pay a tax — a step that officials already have said they will take. And they could stop trying to keep insurance companies in the markets.

None of those actions would cause the markets to collapse overnight, but they would destabilize them over time by driving out healthy people, which causes costs to rise, which in turn drives out more healthy people. That’s what’s known as a death spiral, and it could happen at least in some parts of the country eventually.

What would cause harm quickly?

The biggest issue involves money that has the bureaucratic-sounding name of cost-sharing reductions.

Basically, the government tells insurers that they need to hold down the insurance deductibles and co-payments that they charge low-income people.

That costs the insurers money. To make the insurers whole, the government is supposed to reimburse them. For more detail, here’s an explainer.

Every month, Washington sends insurers checks that total close to $600 million. And every month since he took office, Trump has raised the possibility that he might cut the money off, although he hasn’t actually done so.

If Trump cut off the payments, what would insurers do?

Some insurers would raise premiums to cover the higher costs, as several have already said they plan to do. Others would probably pull out entirely and stop selling insurance in the individual market...

A comment to Jonathan Chait's piece about the vote last night:

Collins and Murkowski made it clear from the beginning that they were voting no. McCain stepped in at the last minute and got all the glory. Sure, I'll give him some credit, but Collins and (especially) Murkowski showed real courage. Murkowski has the toughness that Sarah Palin feigned.

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