Trumpcare=No Care

Via Kevin Drum, we see how well Donald Trump and Republicans have prepared for the elimination of Obamacare:

Congressional Republicans, despite pledging to quickly repeal the Affordable Care Act, are struggling with what parts of the law to roll back and how to lock up the votes they will need, particularly in the Senate, to push their ambitious plans.

Thirty-one states, including many with Republican governors, have expanded Medicaid through Obamacare and could lose billions of dollars if the law is cut back.

In Washington, Republicans are also struggling to figure out what to do with Obamacare insurance marketplaces that Republicans worked for years to dismantle. In a reversal, GOP leaders now are trying to figure out how to prevent their collapse, which would jeopardize coverage for millions more Americans.

Insurance experts, including leading industry officials, have repeatedly warned Republicans over the past several months that repealing the health law without a replacement risks destabilizing insurance markets and will push many insurers to simply stop selling health plans.

So, not only will the repeal likely lead to tens of millions of people losing their health insurance it might actually wreck the entire individual health insurance market. Things would be even worse than before the ACA was passed:

But when the time came to pay up for risk reduction in the Obamacare exchanges, Congress reneged and paid only 12% of what was owed to the insurers. So, on top of the fact that the companies had to bear the risk of unknown costs and utilization in the startup years, which turned out to be higher than they expected, insurers had to absorb legislative uncertainty of whether the rules would be rewritten.

And now comes the reality of the “repeal and replace” initiatives from the Republicans. If the uncertainty of this market was large before with the ACA, it is almost unknowable under whatever comes next. Thus the initial exit of some latecomers, including United Healthcare, and undercapitalized minor entrants, such as nonprofit co-ops, is almost certain to become a flood of firms leaving the exchanges. They have little choice since the risks are too large and the actuarially appropriate rates are still not obvious given the political turmoil and changing rules.

Some in Congress seem to think that passing the “repeal” part immediately but delaying its implementation for two or three years will somehow leave everything as it is now. But this naive notion misses the fact that the riskiness of the Obamacare individual insurance exchange markets will have been ramped up to such a level that continuing makes no sense.

How does the Trump administration plan to deal with this?

The budget legislation gives congressional committees until Jan. 27 — a blink of an eye for lawmakers — to write legislation repealing major parts of the health care law. Likely targets include the law’s tax penalties for people who don’t obtain insurance, its requirement that many companies cover workers and tax increases on higher-earning individuals and many health care firms.

Aware they have no chance of quickly agreeing on replacement legislation, Republicans plan to delay when their repeal would actually take effect. A range of 18 months to three years — perhaps longer — has been under discussion.

Trump has provided few specifics about how he would revamp the nation’s $3 trillion-a-year health care system. Steps he and congressional Republicans have mentioned include greater reliance on tax credits to help people afford coverage.

Republicans don’t want to abruptly end health care coverage for millions of voters who live in GOP-represented districts and states, or cause chaos in health care markets and prompt insurance companies to stop selling policies. So they are considering including provisions in their repeal bill to protect consumers and insurers during the transition period.

Sen. John Thune, R-S.D., a member of the GOP Senate leadership, said that could include money to temporarily continue helping people afford to buy coverage and language letting the Department of Health and Human Services help stabilize insurance markets.

A few things:

  • Republicans have been talking about repealing the ACA since it was passed and they have no plan to replace it yet? Obviously they have never really planned a real replacement.
  • Given the above discussion, it’s very possible that the repeal of the ACA will crash the individual insurance market so it won’t matter if there are subsidies since there will be no companies willing to participate in the market. Why would a company participate in a market they know will be gone in a few years and which depends on Congress supporting them to break even–knowing that Congress reneged the last time such a promise was made?
  • Given all the complexities, they are going to write the repeal legislation very quickly. I’m sure they will be very well written and carefully vetted.

Donald Trump, being Donald Trump, is trying to get out the lie that any failure will be the fault of Democrats:

massive increases of ObamaCare will take place this year and Dems are to blame for the mess. It will fall of its own weight – be careful!

Sorry Donald, this will all be on you and the Republicans. You will be responsible for tens of millions of Americans losing health insurance.

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