Same old Song and Dance

The House Republican Study Committee is offering a “repeal and replace” plan for Obamacare. If we assume that this is purely a marketing document aimed to fulfill the check box that there is a “plan” to “replace” Obamacare that can get 218 votes in the House, then this document aces that evaluation. However, my therapist asked me to try not to be a cynical bastard before my first cup of coffee every morning, so lets evaluate this plan on the following criteria:

  • Provides coverage for people with pre-exisiting conditions
  • Provides coverage for people who aren’t part of the Republican donor class
  • Attempts to bend the cost curve down
  • Covers neccessary medical processes

Before we evaluate, let’s go over the major policy planks.

  1. Repeal all of Obamacare including Medicaid expansion and the three legged stool of subsidies, community rating/guaranteed issue, and mandate.
  2. Give people a tax deduction of $7,500 for an individual and $20,000 for families
  3. Significant expansion of HSA tax advantages.
  4. $25 billion for state run high risk pools with premium support for any premiums that are over twice the state average for insurance.
  5. Coverage guarantee for pre-exisiting conditions only applies to people who maintain continuous coverage
  6. Allow insurance companies to sell a single product through a single state regulatory filing
  7. Allow small groups to pool together for better risk pool pricing.
  8. Improve pricing transparency
  9. Stop comparative effectiveness research
  10. Tort reform to cap damage limits
  11. Random anti-abortion plank

 The short version is MASSIVE FAIL

The long version is below the fold:

 The big “idea” behind the “policy” document is that tax breaks solve all problems.  The tax break is aimed at decoupling insurance from employment.  However, as we all know, deductions give more money back to people who have higher incomes.  Someone in the 25% bracket will see a $1,875 refund on the $7,500 deduction while someone earning $16,000 (or just slightly above 138% of poverty line for an individual) will see either $750 back (10% bracket) or less if there were any other deductions they were taking.  So the tax break idea gives more help to those who don’t need it. 

Right now for Obamacare, there is a significant debate on whether or not an individual with an income of $16,000 is able or willing to pay $600 a year for health insurance after they receive a $4,000 or $5,000 subsidy.  The House GOP inverts the dynamic and gives a $750 subsidy for a several thousand dollar a year policy (if it covers anything at all). 

Moving down the income ladder and working up in family size, a $20,000 deduction to buy health insurance does not help a family that has less than $20,000 income, and it is a cruel joke to a family of four with an income of $40,000.  And as a kicker, if this policy did go into play, we can expect to hear about the 57% and all of those lucky duckies who weren’t part of the 47%  for years to come.  Now if a family is making $250,000 a year, this ain’t a bad policy set.  But that is to be expected.

HSAs are going to be a part of the health care and health payment environment for a while.  If we had a functional political system that has working factional blocks interested in give and take, HSA treatment could be a point of reasonable negoatiation.  We don’t have that, we have a quasi veto controlling faction that likes to eat anthrax laced tired rims.

As a policy note, HSA tax treatment against massively favors the well-off on both the tax advantages and the fact that they have the money to put into these accounts to begin with while the middle class and poor can’t come up with $5,000 or more in cash in a single year to cover a catastrophic event, much less an annual several thousand dollar lump to cover expensive chronic care (unless you’re in Colorado).  Furthermore, there has been significant research that has shown tax incentived savings don’t materially impact the total value of savings, it just redistributes savings to the favored uses.  As it is, we as a society have too much of our personal savings tied up in illiquid assets such as houses and 401(k)s, so having another dedicated use savings vehicle is probably a bad idea.

High risk pools have been a conservative hobby horse.  The idea to to pay for the care of people who no insurance company wants to touch.  The problem is that insurance companies won’t insure these people because they are guaranteed money losers because they have known and expensive care requirements.  Obamacare gets these people into the risk pool by the community rating requirement and distributes the risk via the mandate.  This policy proposal shunts them to the side.  The policy failure is that these people will cost way more than $25 billion dollars over 10 years to serve.  And since the high risk pool often contains individuals who are more likely to either not be able to work, or can only work at low wage jobs, they don’t have the resources to pay double state average premiums before they can get any federal assistance.  Again, this is a good deal for someone with means.

Continuous coverage in the private market only matters when there is no three legged stool with guaranteed issue.  This allows people with pre-exisiting conditions to get insurance coverage if they have always had private market insurance coverage.  If someone is employed at a place without health benefits, they are SOL as the individual market won’t insure them under this proposal.  Again, if someone is pulling in 150K a year no big deal because the odds that they work at a job without health benefits is minimal, but someone make 20K a year is SOL.

Selling insurance across state lines already happens. Cigna, Aetna, Wellspan and several other major players have operations in at least half the states in the country.  Right now they have to demonstrate to the satisfaction of the individual state that they are selling in that they have a sufficient network and product offering.  The House Republican plan introduces the credit card and corporate law model of “regulation.”  A plan approved in one state can be sold in all fifty.   Some small state that is easily bought out like South Dakota or Delaware will under this scenario pass a set of insurance regulations that makes it extraordinarily easy for insurance companies to collect premiums without having to pay claims. 

Furthermore several states have passed laws that allow for state residents to buy out of state approved insurance.  The program evalution on these policies have shown massive fail:

 The two states that have implemented across state lines laws, Georgia and Wyoming, reported similar challenges. No out-of-state insurers have entered either of these markets or indicated their intent to do so as a result of the states’ across state lines legislation. Maine officials reported that no out-of-state insurers have yet indicated their intent to enter…

As a side note, I don’t have a problem with a state deciding to either form interstate compacts with other states with similar regulatory priorities or opening up their entire insurance market to national race to the bottom regulation.  States are allowed and should experiment, I oppose national race to the bottom standards.  Massachusetts does not want to be Mississippi’s bitch.

Allowing small groups to pool together is already happening.  That is called the “SHOP” experience on the Exchange.  This is not a bad idea, it is just reinventing the fucking wheel when the pre-exisiting wheel is almost ready to roll.

Improving price transparency again is something that in a rational political environment should be a fairly easy policy to hammer out as theoretically all veto players should be interested in roughly the same agreement region. 

Stopping comparative effectiveness research is a great way to waste money.  We should only pay for treatments and interventions that work.  CER is an attempt to figure out what actually works.  This is a throw-away policy to assuage the Rascal Riders that there are no death panels and it is amazingly stupid.

Tort avoidance and damage limitation policies are designed to fuck over a Democratic donor group and reward Republican donor groups.  It is a rent distribution system to favor certain groups.  Furthermore, Texas has enacted tort “reform” and it has had no impact on the rate of cost growth or doctor retention in Texas. 

The researchers said their study suggests that Medicare payments to doctors in Texas rose 1 to 2 percent faster than the rest of the country, Black said.

Since tort reform, some Texas residents have complained that they cannot find a lawyer to pursue a malpractice case because of the $750,000 cap on payouts for pain, suffering, disfigurement and mental anguish. The limit often makes litigation cost prohibitive…

Texas saw the number of direct patient care doctors grow more slowly after tort reform than it did before, the study says. Afterward, Texas did slightly worse than other states in attracting doctors, the study says….

And the random anti-abortion plank is in the policy proposal because the policy proposal was released on a day that ended with “Y”.






42 replies
  1. 1
    prufrock says:

    Re: Credit card style insurance regulation.

    My money is on Michigan. They’ll use the kickbacks to build Delta City on the place where Detroit used to be.

    Hey, the remake is coming out and it would be the best movie ad campaign ever!

  2. 2
    Ash Can says:

    This post should be required reading for, well, everyone in the nation. Many, many thanks for this.

  3. 3
    WereBear says:

    I’ve yet to hear a Republican proposal that doesn’t start with, “So you have a ton of money…”

    Twisted thing is, this appeals to Republicans who DON’T have a lot of money. Apparently, they spend every waking hour pretending to themselves that they DO.

  4. 4
    Baud says:

    I’m beginning to sense a pattern with these Republicans.

  5. 5
    MomSense says:

    @Ash Can:

    I second that statement!

  6. 6
    Poopyman says:

    Aerosmith? My first thought was “A little song, a little dance, a little seltzer down your pants”, which is much more in keeping with the Republican clown car.

  7. 7
    MikeS says:

    @WereBear: No , they are just planning on what will happen after they win the big Lottery Jackpot next week.

  8. 8
    Ash Can says:

    @WereBear: And when the Republican policies are implemented and these people get kicked in the teeth by them, they blame “big government” and the by-definition big-government Democrats, and elect more Republicans. Small wonder the GOP wants to ensure an ignorant and ill-informed electorate.

  9. 9
    geg6 says:

    Only tangentially related, but pretty damn funny nonetheless:

    http://www.talkingpointsmemo.c.....-territory

  10. 10
    ericblair says:

    Stopping comparative effectiveness research is a great way to waste money. We should only pay for treatments and interventions that work. CER is an attempt to figure out what actually works. This is a throw-away policy to assuage the Rascal Riders that there are no death panels and it is amazingly stupid.

    It also preserves the scooter, dialysis, alternative treatment, and other gravy trains that a bunch of congresscritters have their grubby paws in.

  11. 11
    dmsilev says:

    However, my therapist asked me to try not to be a cynical bastard before my first cup of coffee every morning,

    You need a new therapist. I hear Obamacare can help with that.

  12. 12
    WereBear says:

    Stopping comparative effectiveness research is a great way to waste money. We should only pay for treatments and interventions that work.

    I am, always, astonished at the extent Pharma shilling and doctor-owned treatment centers have muscled into what should be Science.

    At this point, in a lot of ways, a treatment which doesn’t work simply paves the way for More Treatment. Which doesn’t work. But hey, in a fee for service economy, what’s the problem?

  13. 13
    sparrow says:

    I’m sure my parents will be all about this “new policy proposal” as soon as they hear about it. Because Obamacare has death panels and obv. the republicans are just being sensible unlike those tax-and-spend democrats.

    Details are useless with them. And they’re not even rich or pretend rich! If my well-off aunt hadn’t bought paid off their mortgage a few years ago when my dad lost his job, they’d be living in an apartment or trailer. My dad now makes something like $27k per year at a menial job mainly because it does provide healthcare benefits. Otherwise he’d have retired already. My mom doesn’t work because she never wanted to and my dad was ok with that. Sometimes I really wonder how they are my parents.

    Sigh.

  14. 14
    Jamey says:

    Six years later and the GOP finally comes up with a sorta plan. And the plan ONLY addresses what they believe is wrong with Obamacare, and not with health insurance and health care in general. And they do this after ACA was made law and upheld by SCOTUS?!

    Seriously, fuck them. And fuck the likes of Chuck Todd for empowering this sort of nonsense.

  15. 15
    debbie says:

    @geg6:

    It’s a truly frightening thought that there are people who are to the right of Cruz.

  16. 16
    Ash Can says:

    @debbie: What’s even more frightening is that they’re in at least partial control of one of the two major political parties in this nation.

  17. 17
    WereBear says:

    @sparrow: When I confront people over Death Panels (and admittedly I do this only with people who can stay away and I don’t mind) I tilt my head and get all disbelieving. “Really? You think they will do that? Are we going to watch it on television? How will this affect Medicare?”

    It doesn’t take long before they are red in the face and switching the subject. Because, deep down, they don’t really believe it. They just love to imagine it, because it supports them in otherwise indefensible behavior.

  18. 18
    WereBear says:

    @Ash Can: This is the inevitable end game of “holier than thou.” I saw it in the splintered Baptist churches of my youth.

    Oh, you’re against rock music? Well, we don’t approve of dancing!

    Oh, you’re against hard liquor? Well, we have grape juice for communion!

    Oh, you allow card playing? Well, we don’t let our children play Candyland!

    It never ends.

  19. 19
    RaflW says:

    Given that there are far to many Chuck Todds in journ-alarmism who have advertisers to lure in, all that will matter is that Republicans can say (insert schoolkid voice) “See, yeah, I do TO have a plan!”

    Useless twaddle-pushers on TeeVee will eat this shit right up.

  20. 20
    aretino says:

    Is the Republicans’ proposed tax deduction for health insurance only available to those who itemize deductions or is it something that will come on top of the personal deduction? In either case, I don’t see how an individual with $16000 in income will ever net as much as $750 out of it. If they have to itemize deductions, it in effect replaces their $6100 standard deduction, so it is only worth $140. If it is an add-on, then since the personal exemption and standrd deduction hve already taken their income down to $6000, it is only worth $600 at most.

  21. 21
    ruemara says:

    I’m sharing this across all my networks. It’s a must read.

  22. 22
    Richard Mayhew says:

    @aretino: Yep, you’re right, it is worth even less than I was generously crediting for someone who barely missed Medicaid expansion today.

  23. 23
    WereBear says:

    The strangest part of the past decade or so is that it has further adjusted my worldview.

    I used to be the kind of Liberal who said, “Yes, Republicans have certain points about economic issues, but this must be balanced against the Good of the Public.”

    Not anymore.

    Now I’m like, “It’s not only humanitarian, it will also grow the economy.”

    Because it’s freakin’ stark now, isn’t it? When the greedy piggies clutch all the money to their heartless chests and scream “Mine! Mine!” the economy grinds to a halt for ALL of us.

  24. 24
    J R in WV says:

    @geg6:

    That photo looks like a re-animated Pat Robertson! I begin to suspect there is a flaw in the gene pool that leads people into the Teabagger jihad!

    We know that thei mental processes are flawed, with an inability to detect logical impossiblilties, an inability to see obvious falsehoods, etc. And now they begiun to look alike!!!

  25. 25
    errg says:

    Thanks for this detailed analysis, it’s a dirty job shoveling their shit, but it needs to be done to push back against this kind of stuff.

  26. 26
    mai naem says:

    Anybody hear about the Republican congresscritter who gave birth to a kid with no kidneys so this baby is getting very expensive care – some sounded experimenental. You damn well know that wihout Obamacare, they would have reached the cap for insurance already. And ofcourse she’s using the gold plated congresscritter unsurance.

  27. 27
    boatboy_srq says:

    @WereBear: It’s amazing what slips through the cracks, and why. There’s an old joke that the SBC disapproves of sex and drugs – not in themselves, but because they lead to dancing.

    Every time “individual responsibility” appears in the same proposal with “tort reform” it’s a giveaway that the proposal is a crock. The only way individual responsibility can work as a means to make any given contract work for both parties is if the individual has meaningful redress when the other party fails to provide. “Tort reform” is the get-out-of-jail-free whatever industry that’s involved: it limits vendor liability, and thus removes the hazard to their profits caused by providing a substandard product. Anyone truly committed to IR should be reflexively opposed to TR, since it removes the bargaining leverage from the individual and frees the business to do as it pleases without fear of meaningful sanction.

    And for the rest – yep, sure enough, the proposal is a crock.

  28. 28
    Chris says:

    @WereBear:

    If you live in Cuba or North Korea, Republicans have a point on certain economic issues. Short of that, they’re the problem.

  29. 29
    Mike in NC says:

    On a related note, I read this morning that the state of North Carolina has hired a consultant with a long history of being an anti-abortion activist, and she’s being paid $95K a year to basically come up with a plan to dismantle Medicaid in NC.

  30. 30

    @WereBear:

    I’ve yet to hear a Republican proposal that doesn’t start with, “So you I have a ton of money…”

    FTFY.

  31. 31
    gene108 says:

    Selling insurance across state lines already happens. Cigna, Aetna, Wellspan and several other major players have operations in at least half the states in the country. Right now they have to demonstrate to the satisfaction of the individual state that they are selling in that they have a sufficient network and product offering. The House Republican plan introduces the credit card and corporate law model of “regulation.” A plan approved in one state can be sold in all fifty. Some small state that is easily bought out like South Dakota or Delaware will under this scenario pass a set of insurance regulations that makes it extraordinarily easy for insurance companies to collect premiums without having to pay claims.

    I wish they’d try this with auto-insurance first. New Jersey has very expensive auto insurance rates and I bet selling policies written to a different state’s laws would help reduce my auto insurance payments.

    I mean, if this is so good for health care, why isn’t it proposed for every other type of insurance that is regulated by individual states differently?

  32. 32
    negative 1 says:

    @sparrow: Yes, my father was also waiting on a response to the question “you have a better idea?” The real fun is that I had him admitting when the ACA passed that he didn’t care about anyone else, only himself, which makes one wonder why he would even back the rethuglican bill.
    A great example of this mentality appeared in the “Sponsored Content” to the right of the comments, in the Newsmax article list. “Whistleblower: 31 Deadly Drugs the U.S. Wants You to Consume”. Even if there were any validity to the list (spoiler alert: it’s bu//sh!t), it wouldn’t be ‘teh government’ who wanted you to consume them, it would be the corporations who made them. But we all know corporations don’t do bad things, because the market, only ‘the government’ is out to fool you.

  33. 33
    Manyakitty says:

    @WereBear: Sadly, my boyfriend suckles his “information” from the the teat of hate (Limbaugh, Levin, and the rest of the predatory ass hats), and he’s totally bought into their bogus crap. He was CONVINCED and startled that Romney did not win in a landslide. At any rate, the R-Teas sold their followers on the idea that if they wish hard enough, maybe, just maybe, they can mow the lawn of the really rich guy who voted away their food stamps. Magical thinking, indeed.

  34. 34
    karen marie says:

    @prufrock: Koch brothers have already decided the best use of the city formerly known as Detroit is an unregulated dump site for tar sand debris.

  35. 35
    Yatsuno says:

    @Richard Mayhew: I’d also bet money the tax credit is non-refundable, meaning it only lowers Adjusted Gross Income but doesn’t allow the reduction to count as a refund. Seems like something these greedy fuckers would do.

  36. 36
    fuckwit says:

    Yup, that’s the fail in a nutshell: taxes (and refunds/cuts) are proportional to income, medical expenses are not.

    So a poor person with crippling medical expenses is fucked by this plan. A rich person with no medical expenses gets even richer by this plan.

    No surprise there. Standard Rethug bullshit.

  37. 37
    fuckwit says:

    @WereBear: The ones that don’t have money, at least have whiteness, and that’s enough to make them feel superior. Always be mindful of the dogwhistles.

  38. 38
    Richard Mayhew says:

    @Yatsuno: That is how I am reading the “plan” as well. And since it is past my 1st cup of coffee, I can be cynical and say that is a feature not a bug.

  39. 39
    boatboy_srq says:

    @WereBear: It doesn’t help that they see/read all the morality tales ranting against everything they stand for nowadays, and take away all the wrong messages. A Christmas Carol? “See? Scrooge was a good guy.” Wall Street? “Greed is good.” The Handmaid’s Tale? “Proof positive women can’t control their own breeding impulses.” I Know Why the Caged Bird Sings? “That last is especially true for the ni-CLANGs.” The Prince? “That Mackey-whatsis guy sure knew how to run a government.”

    There are days when I’m surprised that the Teahad isn’t POd at the Founding Fathers for suggesting that the US even have a government. Teahadists are nihilist anarchists in fancy dress.

    @negative 1:

    But we all know corporations don’t do bad things, because the market, only ‘the government’ is out to fool you.

    Actually, if you read Teh Rand, business is out to fool you too – but it’s your duty as a human being to be smarter and better informed than they are, and catch them when they try; and it’s on you when you aren’t and don’t. The only business you can truly trust is your own, and when the other guys hoodwink you it’s your own fault. Randian Libertarianism is the easiest way for these volk to make themselves feel superior, because they haven’t been taken in by Big Gubmint, labor unions, taxi drivers or The Help.

  40. 40
    rikyrah says:

    thank you for the details…trying to spread the word about it.

  41. 41
    boatboy_srq says:

    @WereBear: Welcome to the migration Leftward.

    [Mumble mumble] years ago I was Republican. Maine Republican, mind you: fairly centrist, socially conscious, but still GOP. Think Margaret Chase Smith and Bill Cohen. According the Teahadists all of us are raving Gawless IslamoFascoSoshulist monsters.

    It’s hard to stomach the MSM’s trope about “Dems moving Leftward” when what’s really happening is Democrats are either remaining stationary or moving slightly Rightward – but the GOTea is dashing so fast toward the Reichwing cliff that everything else seems to be moving Left in comparison.

  42. 42
    bg says:

    thanks for laying out this critique so clearly
    I especially appreciate your pointing out the real reason for tort reform has nothing to do with improving health care or or access to it, and everything to do with crippling the trial lawyers so they can’t donate to the democrats. And it has the added benefit of screwing over people who probably are poor — the most seriously hurt victims of medical malpractice

Comments are closed.