Saturday, December 3, 2016

Whither Goest Thou, Obamacare Schadenfreude?

Could the GOP repeal Obamacare on inauguration day? That’s one possibility being discussed though the path to get there seems fairly narrow. From the Hill:
House and Senate budget leaders are teeing up a vote to repeal most of ObamaCare by Jan. 20, 2017, according to multiple sources.
The leaders of the House and Senate Budget committees are planning the vote for the first week of January, to deal an immediate blow to ObamaCare after President-elect Donald Trump’s inauguration, according to a Senate GOP aide.
The hitch in this plan was pointed out by Mitch McConnell who told the Hill, “You have to pass a budget before you pass a reconciliation bill.” That’s what Republicans intend to do. From the LA Times:

Since Congress did not pass a 2017 budget for the fiscal year that began Oct. 1, they hope to retroactively approve one in the weeks ahead so they can include the first part of the special instructions needed to repeal the program. But [House Majority Leader Kevin McCarthy] doubted that would be completed by the time Trump takes office.

“I don’t think you can do it before [Jan.] 20th,” he said. “There’s only so many legislative days.”

Still the reconciliation repeal could be ready fairly early in Trump’s tenure. What will take longer is the replacement effort.
According to Politico  GOP may delay Obamacare replacement for years. Well, the last one was passed in haste with no input from Republicans, and we know how well that worked out.
“We’re talking about a three-year transition now that we actually have a president who’s likely to sign the repeal into the law. People are being, understandably cautious, to make sure nobody’s dropped through the cracks,” said Senate Majority Whip John Cornyn (R-Texas).

The tentative strategy is reminiscent of Capitol Hill’s infamous “fiscal cliff” days, when Congress imposed simultaneous deadlines to raise the debt ceiling, extend expiring tax cuts and fund the government. The hope was that it would create irresistible political pressure to get behind a bipartisan mega-fiscal deal.
At least Republicans Finally Have a Plan. Actually they've had several along the way. The media won't tell you that, though, because it violates the meme that the Republicans didn't. The return of the insurance company bailout (and this time it’s the GOP considering it).
. . . repeal and delay has a big problem. Specifically, once the GOP repeals Obamacare, even if that includes a multi-year phase out, there is no reason for insurers to remain in the marketplace. Many of the top insurers have already abandoned the exchanges and most of those who haven’t are losing money. Once the marketplace is formally killed by repeal, most insurers would cut their losses, leaving no one to offer plans during the ‘delay’ phase of repeal and delay.

So how do you keep zombie-Obamacare going when everyone involved knows it is dead? You pay the insurers to stick around. Here’s insurance industry expert Bob Laszewski’s take from an interview at Vox:
What you do is subsidize the carriers. You reactivate some of the policies that were meant to stabilize the marketplace in the early years, the three R’s…
But these are the things that Republicans have hated. This is what they call an insurance company bailout. But keeping them around is the only way to maintain a viable market. The problem is when you have an insurance market and the new administration declares it DOA, it will go into death throes. It will be a death spiral. The Trump administration will have put it in a death spiral. The only way to fix that is if you subsidize the market. If you just subsidize the consumers, that doesn’t do any good if you don’t subsidize the carriers.
Sen. Marco Rubio has been praised on the right for making one of the three Rs, risk corridors, budget neutral. That move prevented the administration from handing billions over to Obamacare insurers who lost money on the program and led to some insurers dropping out and a number of co-op closures. Now, according to a story at the Hill, the GOP is thinking seriously about reviving the bailout, albeit without making it look like they are reviving the bailout. . .
The problem is that if you want insurance companies to play the game, they have to be able to get something out of it. Is Trump taking aim at Obama’s Medicaid expansion with CMS pick?
Republicans in Congress pledge to use the first opportunity of the Donald Trump presidency to repeal ObamaCare. Trump has met that pledge by appointing people most likely to dismantle it from the inside. First Trump appointed staunch ObamaCare opponent Rep. Tom Price to head HHS, and now he’s picked a health-industry expert to run the agency responsible for its Medicaid expansion. Seema Verma has plenty of experience in working the margins of ObamaCare’s Medicaid expansion to push back against it:
President-elect Donald Trump on Tuesday morning picked the founder and CEO of a health policy consulting firm, Seema Verma, to serve as Administrator of the Centers for Medicare and Medicaid Services.
“I am pleased to nominate Seema Verma to serve as Administrator of the Centers for Medicare and Medicaid Services,” said President-elect Trump in a statement. “She has decades of experience advising on Medicare and Medicaid policy and helping states navigate our complicated systems. Together, Chairman Price and Seema Verma are the dream team that will transform our healthcare system for the benefit of all Americans.”
Verma has worked with VP-elect Mike Pence to produce a compromise on Medicaid expansion in Indiana, and then did the same in Kentucky and other states run by Republican governors. Verma helped them avoid some of the pitfalls of the expansion when they came under heavy political pressure to join the expansion. Thanks to her work, some governors were able to salvage HSAs and work requirements as part of their packages — although conservatives still howled when these states joined the expansion.

This pick addresses one of the stickier questions for Republicans after repeal: what next? Democrats have already begun to focus their attacks on repeal by accusing the GOP and Trump of leaving low-income Americans out in the cold by rolling back the Medicaid expansion as part of the repeal. Verma has worked on this issue for years, and should be able to work out a transition plan quickly to reduce the impact of repeal on these recipients, and therefore the political liabilities of ObamaCare repeal.
As the Observer observes (nope, not yet) ObamaCare’s Chickens Come Home to Roost: "Democrats, anticipating rage over huge premium increases scheduled for 2017, are already trying to blame Republicans". Well, them and Fox News: Obama On Why Democrats Failed: See, It's Because FOXNEWS! Is On the TV In "Every Bar and Restaurant".

Must read. Blue Cross and Blue Shield of Louisiana explains Why Doesn't My Health Insurance Work Like My Care Insurance?
“Gee Mike, I don’t really get it. I mean, I have insurance on my car, and if I do the right thing, drive safely and don’t drive impaired, drive at a reasonable speed, drive fewer miles, then the insurance company sees me as a better risk and my rates go DOWN. If I get married or get older, my rates go down. If I move to a state with better liability laws or safer drivers, my rates go DOWN. If I drive a cheaper or safer car, my rates go down. As my car gets older, they go down.”

“I know what to do to help control my costs on car insurance and it all makes sense,” he said as I nodded vigorously, waiting for my opening. (Ken is the ultimate Straight Talker!) “But what the HECK do I do to get my HEALTH insurance rates down? I never use it, and they go up no matter what!” Ken finished, thoroughly exasperated. I smiled, nodded, drew a deep breath and began…

“Well, your car insurance company is allowed to adjust a lot of things based on who you are, your geography and your behavior before they set their rates,” I told him. “Car insurance rates can also change based also on your CREDIT rating! Turns out people with higher credit scores are less likely to be in crashes.”

“But the real problem is,” I continued, “individual health insurance has been FEDERALIZED and car insurance has not. So most car insurance companies can turn people away and not sell them insurance at all. Health insurance carriers have to take everyone who shows up, and by law, rates can’t be adjusted except for their ages.”

“So you see Ken, when insurance companies sell you health insurance in 2016, all the risk levers are gone, taken away, made illegal. We can’t adjust the rates we charge based on behavioral factors (except to punish you if you are foolish enough to self-report tobacco use) and we can’t turn anyone away.”

“So, buddy, imagine if your car insurance company had to take every driver in the world – good or bad. No adjustments for wrecks, DUIs, marital status, bad credit, expensive cars or anything like that. Imagine if all the bad driving risk in the world got dumped into YOUR car insurance company’s risk pool. Then imagine if your car insurance had to pay for all your oil changes and tune-ups, as well as when you actually have damage. What do you think would happen to your rates?” . . .
And it goes on from there. And then there's this, the handy Obamacare Organization Chart:

 Click to make large enough to read. What could go wrong?

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