Trump/Republican Tax Cut as bad as predicted

The CBO has released their analysis of the tax cut disguised as a healthcare bill that passed the House:

CBO and JCT estimate that, in 2018, 14 million more people would be uninsured under H.R. 1628 than under current law. The increase in the number of uninsured people relative to the number projected under current law would reach 19 million in 2020 and 23 million in 2026. In 2026, an estimated 51 million people under age 65 would be uninsured, compared with 28 million who would lack insurance that year under current law. Under the legislation, a few million of those people would use tax credits to purchase policies that would not cover major medical risks.

They also compare how non-group insurance would fare under current law (Obamacare) to the new law:

Under Current Law. Although premiums have been rising under current law, most subsidized enrollees purchasing health insurance coverage in the nongroup market are largely insulated from increases in premiums because their out-of-pocket payments for premiums are based on a percentage of their income; the government pays the difference between that percentage and the premiums for a reference plan. The subsidies to purchase coverage, combined with the effects of the individual mandate, which requires most individuals to obtain insurance or pay a penalty, are anticipated to cause sufficient demand for insurance by enough people, including people with low health care expenditures, for the market to be stable in most areas.

Nevertheless, some areas of the country have limited participation by insurers in the nongroup market under current law. Several factors could lead insurers to withdraw from the market—including lack of profitability and substantial uncertainty about enforcement of the individual mandate and about future payments of the cost-sharing subsidies to reduce out-of-pocket payments for people who enroll in nongroup coverage through the marketplaces established by the ACA.

Under the Legislation. CBO and JCT anticipate that, under H.R. 1628, nongroup insurance markets would continue to be stable in many parts of the country. Although substantial uncertainty about how the new law would be implemented could lead insurers to withdraw from or not enter the nongroup market, several factors would bring about market stability in most states before 2020. In the agencies’ view, those key factors include subsidies to purchase insurance, which would maintain sufficient demand for insurance by people with low health care expenditures, and grants to states from the Patient and State Stability Fund, which would lower premiums by reducing the costs to insurers of people with high health care expenditures.

The agencies expect that the nongroup market in many areas of the country would continue to be stable in 2020 and later years as well, including in some states that obtain waivers from market regulations. Even though the new tax credits, which would take effect in 2020, would be structured differently from the current subsidies and would generally be less generous for those receiving subsidies under current law, other changes (including the money available through the Patient and State Stability Fund) would, in the agencies’ view, lower average premiums enough to attract a sufficient number of relatively healthy people to stabilize the market.

However, the agencies estimate that about one-sixth of the population resides in areas in which the nongroup market would start to become unstable beginning in 2020. That instability would result from market responses to decisions by some states to waive two provisions of federal law, as would be permitted under H.R. 1628. One type of waiver would allow states to modify the requirements governing essential health benefits (EHBs), which set minimum standards for the benefits that insurance in the nongroup and small-group markets must cover. A second type of waiver would allow insurers to set premiums on the basis of an individual’s health status if the person had not demonstrated continuous coverage; that is, the waiver would eliminate the requirement for what is termed community rating for premiums charged to such people. CBO and JCT anticipate that most healthy people applying for insurance in the nongroup market in those states would be able to choose between premiums based on their own expected health care costs (medically underwritten premiums) and premiums based on the average health care costs for people who share the same age and smoking status and who reside in the same geographic area (community-rated premiums). By choosing the former, people who are healthier than average would be able to purchase nongroup insurance with relatively low premiums.

Why it almost sounds like things will be worse under this legislation. But let’s get to the important part:

• Repealing the surtax on certain high-income taxpayers’ net investment income;
• Repealing the annual fee on health insurance providers;
• Reducing the income threshold for determining the medical care deduction;
• Delaying when the excise tax imposed on some health insurance plans with high premiums would go into effect; and
• Repealing the increase in the Hospital Insurance payroll tax rate for certain high-income taxpayers.

And here’s what that gets:

The chart below shows the tax changes (the first two major components mentioned) go almost entirely to the highest earning households, while providing little or no benefit to the bottom 80 percent of the income distribution.  In fact, TPC estimates that a $37,000 average annual tax cut will go to the 1 percent of the population with the highest earnings (annual income of over $772,000).  The top 0.1 percent of the income distribution would receive an annual tax cut of over $200,000 (annual income over $3.9 million).

In short, the bill drops 23 million people off insurance to give very large tax cuts to the rich. Now that’s the type of bill a Republican loves.

Trump administration continues to do awful things

It’s easy to miss much of what’s going on in the Trump administration because of its stupidity, such as (Ross is the Commerce Secretary):

ROSS: There’s no question that they’re liberalizing their society. And I think the other thing that was fascinating to me: There was not a single hint of a protester anywhere there during the whole time we were there. Not one guy with a bad placard, instead there was …

CNBC HOST: But Secretary Ross, that may be not necessarily because they don’t have those feelings there, but because they control people and don’t allow to them to come and express their feelings quite the same as we do here.

ROSS: In theory, that could be true. But, boy, there was certainly no sign of it, there wasn’t a single effort of any incursion. There wasn’t anything. The mood was a genuinely good mood.

ummm:

Six years ago, in the midst of the popular uprisings in the Middle East known as the Arab Spring, the Saudi Council of Senior Religious Scholars issued a decree essentially banning public protest in the country. The following February, a 17-year-old named Ali al-Nimr was arrested for participating in an anti-government protest. Two years later, he was sentenced to death by beheading and crucifixion and remains on death row.

So it isn’t “in theory” that protests aren’t allowed, it’s in actual fact. I also wonder why he knows this, he does seem to sleep a lot:

Ross, 79, was seen catching a nap during the president’s speech Sunday in Riyadh to Saudi officials on the need to come together to battle terrorism.

This type of stuff overshadows things that will do real damage to the US, such as:

With Medicaid, the state-federal program that provides health care to low-income Americans, Trump’s budget plan would follow through on a bill passed by House Republicans to cut more than $800 billion over 10 years.

The Congressional Budget Office has estimated this could cut off Medicaid benefits for 10 million people over a decade

….

A key element of the budget plan will be the assumption that huge tax cuts will result in an unprecedented level of economic growth.

Trump recently unveiled the broad principles of what he has said will be the biggest in US history, and Treasury Secretary Steven Mnuchin told a Senate panel last week that these tax cuts would end up creating trillions of dollars in new revenue, something budget experts from both parties have disputed.

The tax cuts would particularly benefit the wealthiest Americans, as Trump has proposing cutting the estate tax, capital gains and business tax rates.

It’s always a good look to cut aid to the poor and elderly to pay for tax cuts to the rich that will increase the deficit.

They also want to kill Obamacare while pretending it died of its own accord:

The campaign to destroy Obamacare continues apace:

The Trump administration on Monday plans to ask a federal court for another 90-day delay in a lawsuit over Obamacare insurance subsidies, according to two administration sources, leaving the future of the health care marketplaces in limbo through late August. The suit, House v. Tom Price, centers on Obamacare’s cost-sharing program, which reimburses health insurers to help low-income people make co-payments at the doctor or hospital.

This is the suit filed by the House against Obamacare’s CSR subsidies. The delay means insurers won’t get assurance one way or the other about the fate of these subsidies, which in turn means they have to assume they’re going away. Anything else would be irresponsible.

And that means insurers have to raise premiums substantially to make up for the potential loss of CSR payments.

This will mean millions more will lose health insurance.

Republicans vote to deprive tens of millions of healthcare

House Republicans have passed their “healthcare” bill:

The measure skirted through the House by a thin 217-213 vote, as all voting Democrats and a group of mostly moderate Republican holdouts voted no. A defeat would have been politically devastating for President Trump and Speaker Paul Ryan, R-Wis.

The nonpartisan Congressional Budget Office estimated in March that the GOP bill would end coverage for 24 million people over a decade. That office also said the bill’s subsidies would be less generous for many, especially lower-earning and older people not yet 65 and qualifying for Medicare.

A CBO estimate for the cost of latest version of their bill will not be ready before the House conducts its vote.

But rich people will get a trillion dollars in tax cuts in the next ten years, so there’s that. Kevin Drum has a nice summary:

With that in mind, let’s do a quick wrap-up of the bill:

  • There have been no public hearings.
  • There’s no final text.
  • There’s no updated CBO score.
  • It is opposed by virtually every patient advocacy group and everyone in the health care industry.
  • Congress is still exempted from the new rules that allow states to waive essential benefits.
  • It raises premiums dramatically for older people.
  • It removes Obamacare’s protection against being turned down for a pre-existing condition.
  • It would steadily gut Medicaid spending for the very poorest.
  • It removes coverage from at least 24 million people, probably more.
  • It slashes taxes on the rich by about a trillion dollars over ten years.

It probably won’t pass in the Senate (one can hope at least), but this shows what Republicans are for: the rich and definitely not the working class.

Here’s the Trump/Republican agenda

Today we get an idea of what Trump and Republicans want to do:

The revised order is narrower and specifies that a 90-day ban on people from the six countries does not apply to those who already have valid visas or people with U.S. green cards.

According to the fact sheet, the Department of Homeland Security will conduct a country-by-country review of the information the six targeted nations provide to the U.S. for visa and immigration decisions. Those countries will then have 50 days to comply with U.S. government requests to update or improve that information.

Additionally, Trump’s order suspends the entire U.S. refugee program for 120 days, though refugees already formally scheduled for travel by the State Department will be allowed entry. When the suspension is lifted, the number of refugees allowed into the U.S. will be capped at 50,000 for fiscal year 2017.

This will probably cut the number of visitors to the US, cut the number of students who want to go to college in the US, and cut the number of people who want to work in the US. This will cost millions of jobs and redirect some of the best and brightest to Europe and Canada.

House Republicans on Monday released their long-awaited plan for unraveling former President Barack Obama’s health care law, a package that would scale back the government’s role in health care and likely leave more Americans uninsured.

House committees planned to begin voting on the 123-page legislation Wednesday, launching what could be the year’s defining battle in Congress.

GOP success is by no means a slam dunk. In perhaps their riskiest political gamble, the plan is expected to cover fewer than the 20 million people insured under Obama’s overhaul, including many residents of states carried by President Donald Trump in November’s election.

The proposal would continue the expansion of Medicaid to additional low-earning Americans until 2020. After that, states adding Medicaid recipients would no longer receive the additional federal funds Obama’s law has provided.

More significantly, Republicans would overhaul the federal-state Medicaid program, changing its open-ended federal financing to a limit based on enrollment and costs in each state.

The changes also might crash the individual market to make it impossible for tens of millions of Americans to get health insurance. That would be a plus for Republicans.

However, it was the next phrase Carson uttered that landed him in hot water.

“There were other immigrants who came here in the bottom of slave ships, worked even longer, even harder for less,” Carson said. “But they too had a dream that one day, their sons, daughters, grandsons, granddaughters. . . might pursue prosperity and happiness in this land. And do you know of all the nations in the world, this one, the United States of America, is the only one big enough and great enough to allow all those people to realize their dream.”

Ok, that seems a little unfair. Well:

The original nine plaintiffs claim that detainees are forced to work without pay and that those who refuse to do so are threatened with solitary confinement.

Specifically, the lawsuit claims, six detainees are selected at random every day and forced to clean the facility’s housing units. The lawsuit claims the practice violates the federal Trafficking Victims Protection Act, which prohibits modern-day slavery.

‘‘Forced labor is a particular violation of the statute that we’ve alleged,’’ Free said. ‘‘Whether you’re calling it forced labor or slavery, the practical reality for the plaintiffs is much the same. You’re being compelled to work against your will under the threat of force or use of force.’’

This has been going on for a while so it’s not just the new administration, except that President Obama tried to cut back on private prisons for this type of reason and the Trump administration wants to expand them:

Notably, the stocks of the two biggest private prison operators, Geo Group and CoreCivic (formerly known as Corrections Corporation of America), have surged since Trump’s election. The companies donated a total of $500,000 to Trump’s inaugural festivities, USA Today reported.

Since Trump took office, his administration has reversed the Obama administration’s policy to end the country’s reliance on private prisons.

And if a little slavery slips in, well all for the better. Just ask Ben Carson–immigration and slavery are basically the same thing.

3=3.49

Via here, we get this:

Insurers would have more leeway to vary prices by age, so that premiums for the oldest customers could be 3.49 times as large as those for younger customers. Today, premiums for the old can be only three times as high as premiums for the young, which is what the Affordable Care Act stipulates. According to sources privy to HHS discussions with insurers, officials would argue that since 3.49 “rounds down” to three, the change would still comply with the statute.

At some level, this is politically stupid since it explicitly raises the rates of older people while reducing it for the young–the opposite of the voting pattern for Trump. For me, the problem is the math–at most 3 times as large means at most 3 times as large, even 3.01 is out, never mind 3.1 or 3.49.

This will be similar to the “Pi Bill” from Indiana which indirectly says that pi is 3.2 (the bill tried to prove a method of squaring the circle, which is impossible, by making it a law).

This is the type of thing which shows why there needs to be a March for Science (it will be on April 22 with satellite marches all over the country).

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.

Trump will screw Trump states

Kevin Drum put this up:

Once Obamacare’s subsidies are repealed, it’s likely that 3 million people with expensive pre-existing conditions will be instantly tossed out of the health care system, unable to get insurance and unable to afford proper care.

He’s using the numbers from here. If you look at the chart in Kevin Drum’s post you notice that the states with the highest percent of people with pre-existing conditions voted for Trump. In fact, there are 23 states that are at or above the US average of 27% with pre-existing conditions–of these 4 voted for Clinton including Maine which split electoral votes (3 for Clinton, 1 for Trump). And all 11 with 30% or higher voted strongly for Trump (Clinton got less than 40% of the vote in all those states).

Hey, here’s a scatterplot (DC is the one in the upper left):

pre-exist

Donald Trump has said he wants to keep the ban on people being denied health insurance if the have pre-existing conditions but the health insurance companies will go bankrupt unless they’re allowed to charge them much more and/or force almost everyone to have insurance. Since the mandate to have insurance is not one of the things Trump wants to keep, health insurance will become unaffordable to a good chunk of these people which is why Kevin Drum says that 3 million of these people will be instantly tossed out of the health care system.

Trump voters really know how to stick it to themselves.

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