Caps, Subsidies, Equalized tax treatment, State Stability, and on and on and on. It makes my head hurt. The unnecessary complexity makes it un-resolvable.
Get the government out of healthcare. Repeal Obamacare. Repeal all of it effective in six months. Let the free market react in the interim to develop insurance products that work like auto and home policies. No government mandated anything.
Let the public have access to a free market. Let employers do the same.
The States should concentrate on the safety net for pre-existing conditions and for those that truly can’t afford health care. Putting everyone in the safety net to save a few makes the safety net impossible.
One size does not fit all, it fits no one. Let the market work. Keep it simple, stupid. The market handles complexity quite well without any interference.
House Republican Health Care Bill Misses the Mark
From The Daily Signal: By Edmund Haislmaier / March 07, 2017
The key problem with the draft House health care bill is that it fails to correct the features of Obamacare that drove up health insurance costs. Instead, it mainly tweaks Obamacare’s financing and subsidy structure.
Basically, the bill focuses on protecting those who gained subsidized coverage through the law’s exchange subsidies and Medicaid expansion, while failing to correct Obamacare’s misguided insurance regulations that drove up premiums for Americans buying coverage without government subsidies.
That is both a policy problem and a political problem.
About 22 million individuals currently receive subsidized health coverage through the exchanges (8 million) and the Medicaid expansion (14 million). For them, Obamacare’s higher insurance costs are offset by the law’s subsidies.
However, that is not the case for another group of about 25 million Americans with unsubsidized individual-market coverage (10 million people) or small-employer plans (at least another 15 million people).
Those 25 million are the ones who most need relief from Obamacare, and have the strongest motivation to politically support repeal and replace. Their lived experience of Obamacare has basically been “all pain, no gain,” as they have been subjected to significant premium increases and coverage dislocations with no offsetting subsidies.
Unfortunately, the draft House bill provides no meaningful relief for that group that is most adversely affected by Obamacare and most supportive of repeal.
Instead, the draft bill leaves Obamacare’s costly insurance regulations in place, and attempts to offset those costs with even more subsidies—a variant of the same basic approach in Obamacare.
New Subsidy Program
In that regard, the draft bill’s new Patient and State Stability Fund is particularly problematic. That program would provide grants to states of up to a total of $100 billion over the nine years, 2018-2026.
There are a several significant problems with this new program.
First, it substitutes new funding for old Obamacare funding without adequately addressing the misguided Obamacare insurance market rules and subsidy design that made the exchanges a magnet for high-cost patients.
Those mistakes in Obamacare created an insupportable burden on the individual insurance market by concentrating expensive patients in only that small portion of the total market.
Second, like Obamacare, it doesn’t actually reduce premiums, but rather masks with subsidies the effects of Obamacare provisions that drove up premiums in the first place.
Third, it creates a new entitlement for states. Furthermore, without a resulting reduction in unsubsidized premium levels, future Congresses will likely face pressure from states and constituents to extend and expand the program.
The Medicaid Problem
The draft bill also fails to wind down the Medicaid expansion and may encourage states to add enrollees.
Under the Medicaid expansion, the federal government reimbursed states 100 percent of the cost of expanding Medicaid to able-bodied adults, with federal support eventually declining to 90 percent.
Yet, states continue to receive significantly less federal assistance (50 percent to 75 percent, depending on the state) for covering the more vulnerable populations (such as poor children and the disabled) that the program was intended for. That policy was both inequitable and unaffordable.
The draft bill does not correct that inequity, but rather reduces the enhanced match rate from 95 percent to 80 percent. The better approach would be to allow states to immediately cap expansion population enrollment, while also setting federal reimbursement for any new expansion enrollees at normal state match rates.
Such changes would likely limit the addition of new individuals to the program, and also substantially reduce the size of the federal revenue loss that expansion states will incur when the program terminates. That is because a significant share of current enrollees can be expected to leave the program for other coverage during the transition period.