Live blogging a first read on Cassidy-Collins

Senators Cassidy (R-LA) and Collins (R-ME) released a potential healthcare replacement plan this afternoon. Several other Republican Senators have signed on as co-sponsors. There are enough to form a plausible minimal blocking coalition for Repeal and Delay. Now let’s see if this bill is any good and worth Democratic votes. I’ll be reading through sections and publishing as I go.

Here is the PDF text. It is only 73 pages so not that bad to read through.
Title 1 Individual Market reform
Section 100 definitions — the big things to keep in mind are 100-2 budget neutrality. What is the baseline of the counterfactual budget against which actual expenditures are to be measured with. Budget neutrality is defined as what PPACA would have spent. As we saw with the Arkansas 1115 waiver, choosing the baseline allows for massive policy leverage. CHIP is also in play here. I am not sure where.

PPACA is defined as PPACA as of the day before this law goes into effect. It seems to be attempting a smooth hand-off.

Qualified Resident — resident of a state on the 1st of the month who is either a US Citizen or authorized immigrant. How does this account for movement between the states? Not a big deal but still a problem.

ROTH HEALTH SAVINGS ACCOUNT; ROTH HSA.—The terms ‘‘Roth health savings account’’ and ‘‘Roth HSA’’ mean a Roth HSA established under
section 530A of the Internal Revenue Code of 1986. I don’t have enough knowledge to comment intelligently on this. I need to do more research.

Section 101 — this is the knocking out PPACA regulations except for the popular stuff
101-A is a general repeal of Title 1 of PPACA (the insurance reforms) EXCEPT in the major case of 102-a-1 and the popular benefits in 101-b-1. The following stays on throughout any options: Under 26 on parent/guardian ESI, Lifetime and annual caps, pre-exisiting conditions (as modified later on), preventative care without cost sharing, mental health parity, and inclusion of Black Lung benefits (this is a smart little piece of work (I’m betting this is a hook to get Manchin on board as well as Capito-Moore watching out for her state).
Sec 102.

Finally Section 101-B-2-5 preserves section 1332 innovation waivers for states. is still live and available for others to use.

It gets rid of a lot of the insurer side regulations (MLR etc) but the consumer side regulations are not getting whacked. Section 1557 of PPACA is also preserved so I am reading that as saying there can be no gender discrimination in rates.

Section 102 is the Health Insurance by State section. Let’s see what is in each of these boxes before a state has to make a choice. Wonkery below the fold

102-A each state has to make an election as to what they want to do. States can change their mind with written notification.

102-A-1-A Continuation of PPACA as written on the day this bill is signed into law. Limitation is funding. A state can’t receive more APTC and CSR funding than they would be eligible for if they choose the alternative state run system. I think this is a rule to minimize the incentive and ability of PPACA continuation states to play Silver Gap games

102-A-2 — A state based alternative that waives most coverage requirements and rules. This is a super 1332 waiver approach. The Feds will kick in a bunch of money to be distributed via eligible individual HSAs.

102-A-3 — Nothing; the state that elects Nothing goes back to the 3/22/2010 status quo

Okay, this is a small change from previous Cassidy bills. The default assumption now is a state will choose 102-A-2 if it does not make a choice. The 2015 bill had nothing as a default. This is a sign that this bill is actually grappling with problems.

102-B Medicaid Expansion. If I am reading this right, Medicaid expansion is still a separate decision. However states that did not expand Medicaid and choose the State HSA option can put Medicaid expansion eligible individuals into the HSA and auto-enroll pool.

Section 103 State Alternative Option plumbing

103-a-1 wipes out the individual and employer mandate (I think employer mandate will go poof in any bill as it has not worked and pisses every one with influence off).

103-A-2 eliminates all other Title 1 requirements of PPACA except for those mentioned in 101

103-A-3 HSA deposit system. Money is important. If there is money, then the plan can work reasonably well. If it is massively underfunded, it is junk insurance.

HSA money is usable for both premium and cost sharing payments. Does this mean only federal HSA contribution or federal plus personal contribution? If the first, it is a convoluted pass through to subsidize people. If the second, it effectively expands the employer sponsored insurance tax advantage to the individual market in a very regressive way.

103-A-4 and 103-C establishes a 2% add-in block grant to the state for population health measures. This is probably a block grant so who knows how it will actually be used.

The rest of 103-B is mechanics. Nothing too interesting.

103-C is the population health fund. It is 2% added onto to the state from all deposited amounts into the qualified HSA’s. The states must use it under guidance of H&SS for public health measures. This can be very broad from education to de-leading to abstinence only education to tai chi classes. It is a mandatory appropriation.

103-D is a state reporting and technical requirement to figure out a way to calculate Usual and Customary rates. This makes a lot of sense. My bet is most states outsource this to a couple of consulting firms and public data repositories.

Section 104 Computation of Deposit Amounts

104-A-1-A and 104-A-1-B direct the Secretary of HHS to come up with an HSA allocation system that is tied to geography and income status. I would presume people who live in high cost areas will see more subsidy than people who live in low cost areas. I would also presume that people who make less money will receive a larger subsidy than their next door neighbor who makes three times as much.

104-A-3 allows states to make currently enrolled ACA beneficiaries whole at their own election. Funds will come out of the general HSA allocation. This could set up a nasty set of fights where the governor gets blamed.

104-B is the calculation of the state pool of money. This is the nut.

104-B-1-b is for states that expanded Medicaid under PPACA but went the state option route. Here the total HSA pool is all Federal Medicaid expansion money plus all Federal PPACA money with a 5% discount. The critical question is who is counted as a subsidy contributing individual for the pool calculation?

FEDERAL EXPENDITURES.—The amount specified in this subparagraph for a State for a year
is 95 percent of the Secretary’s estimate of the total payments that would have been made (as-
suming the existence of a State established Exchange in the State) under section 36B of the
Internal Revenue Code of 1986 and under section 1402 of PPACA with respect to all quali-
fied residents in the State in the year

This is fuzzy as hell and relies on HHS discretion. Is everyone who is qualified gaining a subsidy contribution even if they did not sign up for either Medicaid or an On-Exchange policy? If so, this is really interesting for states with low up-take and no Medicaid expansion. Or is the calculation based on currently signed up people. Than this would be good if a state has been able to do massive and effective outreach to the eligible population. Are there woodworkers?

104-B-2 is similar to the above but it brings in a projected Medicaid eligible poplulation. It only applies to people who make more than 100% FPL. My same question as to how the subsidy base is calculated remains.

104-C-2 tells HHS to create actuarial value tables for subsidy adjustment purposes based on age. There is no age banding but older people will get more than younger people all else being equal.

104-D phases subsidies down by 1% per $1,000 in income above $90,000 for single, or $150,000 for married filing jointly. This advantages upper middle class with few kids, disadvantages upper middle class with lots of kids.

Section 105 State options for accessibility

States can use their own exchanges. States can choose to use,

105-C Auto-enrollment — this is key. States can elect to auto-enroll uninsured individuals into policies that are entirely paid for by the individuals’ entitled HSA allocation if an individual does not affirmatively opt-out. This is one of two major policy planks that replaces the PPACA individual mandate as a risk pool curation measure. We know that opt-in has a lot of resistance while opt-out will capture a much broader pool of people. This is a good idea as it will sweep up quite a few people who are currently eligible for either Medicaid or Exchange subsidy but are not actively enrolled. The coverage won’t be as high in actuarial value but it will be hit by a meteor coverage.

105-D-1 allows for state funded reinsurance and risk corridors. 105-D-2 seems to point risk adjustment towards the Medicare Advantage individual widget model instead of the PPACA comparative risk profile model. This makes the projection for the actuaries easier as they only need to figure out their own population risk and not the reported population risk of all other carriers.

105-E Preventing Benefit design races to the bottom — this is sneaky. It could be really smart.

Insurers have a natural incentive to want to avoid known high costs (even with risk adjustment/reinsurance). This provision attempts to change that incentive. In period 1, a person chooses Insurer A. If in Period 2, that person switches insurers, Insurer A pays 75% of the costs of the switcher for the first three months while receiving 75% of Insurer B’s premium for that individual. After three months Insurer B gets all of the risk and the revenue. This is really fucking sneaky. I like this.

21:33 Section 106

This allows states to set their own open enrollment periods and qualifying life event triggering special enrollment periods. States can allow wait periods and a few other things to control for adverse selection.

Section 107
More open enrollment stuff. An initial open enrollment will be underwriting free. I am slightly surprised that this bill is mandating an annual open enrollment as there has been some conservative wonk talk about multi-year contracts. This bill is doing a lot of lifting on market stability and that is something that would maintain the pool.

107-2 Default Insurance coverage requirements. This is the default baseline insurance. It will be a HDHP with a skinny network and a generic formulary for prescriptions. It is not good coverage. It is coverage that is adequate for hit by a meteor events but not for people with actual chronic conditions. If this was coverage that I was offered at zero out of pocket premium when I was 25, it would be a good deal.

107-D-1 Continuous coverage mandate
CRITICAL HERE.. This is the other risk pool maintenance mechanism in addition to auto-enrollment. People have to hold creditable coverage for no more than a 63 day gap in the past eighteen months after the second open enrollment period. If continuous coverage is not maintained, insurers can underwrite against pre-existing conditions for the same time period as the gap in coverage. The underwriting goes on for no more than eighteen months. Anyone who buys up from the default option and has a gap in coverage will also pay a 1% per month of gap late enrollment fee( up to 10% of premium). This is similar to Medicare.

Section 108 Medicaid and HSA
HSA balances will not count as assets for Medicaid determination except for long term care.

Subtitle B Price Transparency
National out of network ER billing guidelines. And these are actually strong regulations. Physician services are capped at 70% of Usual and Customary. This is still very high compared in-network prices but people will only sell one kidney instead of both to finance an out of network visit. More importantly, facility and technical charges are restricted to no more than 110% Medicare fee schedule. This is huge. It moves the agreement zone to near Medicare rates instead of multiples of commercial rates. Drugs and biologicals move to the lower amount of twice the cost of the drug or the cost plus $250. This piece will be very popular.

This applies to all policies in the country. It is a universal benefit. And this will be very popular.

Okay, the coffee shop I am at is closing, so I’ll work on this some more later.

Closing thoughts — there will be lower AV coverage but mechanically, this could work fairly well. The big question so far is what exactly is the population that determines the funding pool for the states that go the alternative route. After that question is answered, the question of whether the Democrats should seek an ideological victory at some policy cost or a political victory with massive policy and human suffering costs has to be debated.

Title 2 HSA Tax provisions
I’m far weaker on tax law than I am on health policy. So please stand with me as I wade through this stuff.
Section 201 — adds the concept of a Roth HSA to the tax code
Sets a contribution limit of $5,000 per year conditional on self-only individual market coverage. If less than a full year of coverage, proportional reduction in maximum by the number of months not in self-only individual market coverage. Family is a multiple of $5000 and the number of people on the family market policy. People over 55 get an extra $1,000 per year. These amounts are inflation indexed to CPI-Medical (this means the max limits will increase faster than general inflation most of the time)

Roth IRA’s and I presume Roth HSA’s are funded with post tax dollars. Growth and distributions are tax free. For people who are in low marginal tax rates in the current period but have a good reason to believe that they’ll be in high marginal income tax brackets when they get older and have statistically likely high medical expenses, this is a really good deal. A healthy as a horse 24 year old making $22,000 a year while working as an apprentice elevator repairer will massively benefit from this provision if they can put a couple grand a year into the Roth HSA. I don’t know the likelihood of that. Now individuals with future projected lower income tax rates aren’t as well off. A 59 year old middle manager who is counting down the weeks until retirement and a 30% income drop will not benefit as much from this provision.

It can only be used for creditable coverage, cost-sharing expenses, long term care insurance. These restrictions go out the door if an individual is collecting uninsurance where the Roth HSA could be used for non-creditable coverage.

The following chunk on P.62 — I have no idea what it means — can someone who knows tax law help here?

2 HEALTH SAVINGS ACCOUNTS.—Section 223 of such Code
3 is amended by adding at the end the following new sub-
4 section:
6 ‘‘(1) IN GENERAL.—No contribution may be ac-
7 cepted by a health savings account after the date of
8 the enactment of this subsection.

Section 202 Direct Primary Care

Direct primary care where an individual or family pays a Primary Care Provider (PCP) a monthly membership fee for on-demand service is now Roth HSA eligible. I’m fairly indifferent to DPC for most people. It is a nice add-on benefit for most reasonably healthy people. It is great for people with chronic conditions that require intensive management. 202-B treats DCP as a nice add-on but not as creditable coverage. This is important. Wrapping a catastrophic policy around DCP works for most people. DCP provides no protection against hit by a meteor events much less hit by cancer diagnoses.

Subtitle B Section 211 PPACA credits

PPACA credits are limited to what states that opt-out of PPACA but into the alternative method.

The effective date for this bill is 1/1/18 (211-C). That is too soon. Assuming the law is introduced tomorrow and signed next week, there is not enough time for any plumbing of the state alternative models as there is too much rule making that would need to occur. Insurers would not get their final specifications to build until September for a November open enrollment. This has to be pushed back to 1/1/19. By the way, every state will have a strong incentive to Silver Gap the living bejesus out of their market in the last year of PPACA only.

Okay, that is 2800 words on Cassidy-Collins — what do I think of it on first blush?

The bill actually grapples with trade-offs. As a starting point of discussion for replace, this bill is worthwhile as it mostly focuses on further decentralizing the US health finance system to the states in the individual market and very little else. It does not do anything too controversial on non-germane subjects. It can be seen as a technical corrections bill with a conservative slant to the ACA. Democrats would demand and get several technical corrections to the ACA (Family glitch, dropping SHOP, risk adjustment, adding 105-E etc). Legacy Medicaid is not being touched in this bill. States that have not expanded Medicaid would have strong incentives to do so even if the coverage is not as good as it would be under a straight up expansion. The big issue will be the Mississippi vs. Massachusetts problem. Massachusetts residents will have far better coverage than Mississippi and women in Massachusetts will have all of their health care needs included in essential health benefits while women in Mississippi won’t. A critical question will be what is the counterfactual? The counterfactual is critical in evaluating the quality of the outcomes of this bill.

The second point is if this is what Senator Collins wants, she probably could have gotten most of it in 2009.

I really need clarification from legislative text reading experts on who exactly is counted in determining the HSA subsidy pool. If it is everyone currently eligible, enrolled and not enrolled, that is a very different AV story than if the pool of for HSA subsidies is only determined by the currently enrolled. This is a key detail. I just don’t know how to read that paragraph with any certainty.

80 replies
  1. 1
    JPL says:

    Roth is a joke because it only benefits those who can afford to save. imo

  2. 2
    Hunter Gathers says:

    Now let’s see if this bill is any good and worth Democratic votes.

    My offer is this: nothing. They get nothing. 4 days in, we’re already in his head and the rent is dirt cheap.

    He’s weak. Don’t throw him a life preserver. He gets an anvil.

  3. 3
    rikyrah says:

    DA PHUQ?

    GOP senators pitch plan that would let some states keep Obamacare
    Jan 23, 2017

    Republicans are under pressure to explain how they will prevent more than 20 million people from losing insurance if they repeal the signature health-care law from the Obama administration.

  4. 4
    jharp says:

    And it only took them 7 years.

  5. 5

    @Hunter Gathers: Let’s see what is on the table because remember they can’t rebuild it without cooperation but they sure as hell can wreck it.

  6. 6
    elm says:

    My big technical question from the 1-page summary I read earlier (just starting on the full bill) is why they think it will work to preserve the PPACA policy on benefit limits, preexisting conditions, and guaranteed issue without an insurance mandate. Surely Cassidy and Collins have heard of adverse selection.

    It would also seem to end most required preventative services.

  7. 7

    FWIW, I have never liked Susan whiny voiced Collins.

  8. 8
    median says:


    Junk plans is the answer. Remove any requirements for insurance companies to cover illnesses, reinstitute lifetime and annual caps, and insurances available across state lines, effectively making it unregulated. Prices will plummet and everyone will celebrate. The only people unhappy will be the whiners who are actually sick.

    I hope medicare-for-all is what the Democrats push after the ACA is dead. The ACA has too many moving parts that need constant attention. It’s too easy for Republicans to stonewall any fixes or introduce poison pills. This drives up costs and creates an impossible political environment for the system. People blame the ACA instead of Republicans lack of cooperation in improving it. We can not have any government program that defends on the good faith efforts of Republicans.

    An actual public health plan is much more difficult to sabotage, IMHO. Getting rid of the ACA would be a terrible thing and lots of people are going to die if it happens. The silver lining is another plan based on private insurance would be DOA.

  9. 9
    Yarrow says:

    Whoa. Everything is bold.

  10. 10
    Hunter Gathers says:

    @David Anderson:

    remember they can’t rebuild it without cooperation but they sure as hell can wreck it.

    They can only do so much by executive order. He’s weak and has never whipped a vote count in his life. There’s no way that repeal/delay/replace gets passed with POTUS approval ratings in the 30’s.

  11. 11
    elm says:

    @efgoldman: I assume this new David guy forgot to close a tag. He should ask one of our veteran frontpagers like Richard Mayhew for formatting advice.

    @Hunter Gathers: I encourage anyone with Republican Senators or Representatives to call their offices and ask them what specific replacement plan they support. If/when they don’t have an answer tell them it’s b.s. to vote for a repeal if they can’t even tell you what their replacement will be.

  12. 12
    MomSense says:

    I can’t even talk to a human at Collins’ office, only voice mail.
    The MLR is helping to keep costs down and make sure our money is going to pay for actual health care.

  13. 13
    Oatler. says:

    If the word ‘whining’ shows up three times in a thread it summons the Lieberman.

  14. 14

    @MomSense: How popular is she in Maine?

  15. 15
    Davis X. Machina says:

    @MomSense: MLR’s are out! Hookers-and-blow is back!

  16. 16
    Davis X. Machina says:

    @schrodingers_cat: 65-35 for re-election every time. With a near-majority of Democratic women voters voting for her.

    It beggars the imagination.

  17. 17
    waysel says:

    OT From Jim Wrights (Stonekettle guy) FB just now : ‘If you’re on Twitter, I’d like to report this guy for targeted harassment. He’s claiming I assaulted Richard Spencer and he’s trying to get Neo-Nazis to attach my social media accounts.
    I want this cowardly son of bitch taken down.’ I’m not on twitter, but he’s asking for help & we know he’s a good guy.

  18. 18
  19. 19
    Baud says:

    @Davis X. Machina: It’s really astonishing. Is there a Dem anywhere with that much crossover appeal?

    Say what you want about GOP voters, they don’t dick around when it comes to political power.

  20. 20

    @Davis X. Machina: The ghost of non-partisan ship/bipartisanship needs to die, when one party is this extreme.

  21. 21

    @Baud: Baucus for a very long time, the Dakota Democrats as well.

  22. 22
    Davis X. Machina says:

    @efgoldman: They’ll vote D right down the ticket, and then vote for Collins for Senate. Even when she was up against Chellie Pingree.

  23. 23
    patroclus says:

    Collins and Cassidy can stick their TrumpCare taxes and their TrumpCare mandates and their TrumpCare death panels where the sun don’t shine. If it ain’t Medicare for all, there should be ZERO Democratic votes.

  24. 24
    amk says:

    otoh, bs votes for dick’s nominees for dhs and secdef without a word of ‘protest’. #revolution. so, there is that.

  25. 25
    rikyrah says:


    I don’t live in Maine, so she doesn’t represent me, but I fucking HATE Collins. She’s the worst kind of weasel. Constantly mewling her “concerns” and “worries” over things that might hurt her constituents (a large percentage of whom are poor and depend on government programs) but always – always – voting however Yertle McTurtle needs her to.

    ME TOO

  26. 26
    Davis X. Machina says:

    @rikyrah: She’s been living off the Family and Medical Leave Act, and Clinton impeachment vote, for 25 years

  27. 27
    Fair Economist says:

    An HSA system is basically a subsidy system for buying insurance, except less effective since some can choose to go bare with it. The whole reason we have a mandate (which Obama ran against) is because it takes *way* less money than a subsidy system.

    The Republicans aren’t going to increase the subsidies, so you know the HSA system is not going to have anything like enough money to work.

  28. 28
    Yarrow says:

    @efgoldman: Aren’t most of them?

  29. 29
  30. 30
    Tripod says:

    Dumb motherfuckers.

    They’ll never break the surface on “repeal and replace” without cutting that lodestone from around their ankle.

    Apparently they’d rather drown with king rat.

  31. 31
    sharl says:

    @waysel: I reported the guy via Twitter’s standard tool, but to be honest, Twitter is really inconsistent and often quite bad about how it handles – or actually how it doesn’t handle – harrassment and abuse. I’m not the only one who loves Twitter while finding this to be a huge problem with that forum. I’ve never had problems myself, but I’ve seen people get suspended for (IMO) really petty, stupid shit, while keyboard Nazis and (less frequently) pervs are allowed to post much more vicious and nasty stuff with no consequences. And of course it’s usually women users who bear the overwhelming brunt of the abuse.

    Also, while I can see why Jim Wright is going nuts over this, the abuse he’s getting is a lot milder than what I’ve seen on occasion that has gone unpunished, so I’m not confident that Twitter will deal with it (although a large number of complaints may help). That’s not to excuse it of course, and his harasser has one hell of a Wikipedia entry. What a creep!

  32. 32
    Mary G says:

    Susan Collins strung Harry Reid and President Obama along for MONTHS with teases that she might vote for the ACA if they could just adjust it a bit. She acted in bad faith as far as I am concerned and deserves no respect or consideration. While I will wait until I am a bit less enraged and have read Richard/David’s analysis, I believe that no Democratic Senator should even consider cooperating with these two wolves in sheep’s clothing unless the plan includes a mandate and no lessening of benefits for things like preventative care and mental health coverage. Health insurance savings accounts and block grants for Medicaid are fucked up and bullshit. A policy with deductibles and copays higher than the policyholder can afford might as well be no policy at all.

  33. 33

    @Davis X. Machina: 20 years, she was elected in 1997.

  34. 34
    Baud says:

    Section 106 seems to allow for a lot of shenanigans.

  35. 35
    Lizzy L says:

    Block grants for Medicaid totally suck.

  36. 36
    Barbara says:

    @MomSense: MLR does not always keep costs down. It’s a complicated discussion, but MLR only really works to keep costs down when there is a lot of competition among insurers. But competition among insurers by itself also keeps costs down. When there is not a lot of competition, MLR can become an incentive not to keep costs down. On the other hand, MLR is a check on the ability of insurers to favor their own profits over the payment of higher rates to providers — and in that respect is more consistent with higher quality plans.

  37. 37

    I don’t understand the hard-on for health savings accounts. We had one as part of an old insurance plan and I hated it. Look, I don’t want a fucking health savings account. It’s like when everyone had a hard-on for IRA’s and all that. Like these special savings accounts would eventually replace Social Security. NOT GONNA HAPPEN. No way anyone can save enough. We aren’t a nation of savers, anyway. Every penny we save for healthcare and retirement is not being spent at Walmart to keep the fat cats fat.

    But now I’m gonna have to choose between putting money in my IRA and putting money in an HSA? Cuz who can afford both? And I’m lucky I can do at least one. Bottom line is, I’m paying … and I’m STILL paying for Medicare, and will I ever see that money? I FUCKING HATE THIS.

  38. 38
    Barbara says:

    @Davis X. Machina: I know, it’s a mystery, but my understanding is that she appeals to older women by overwhelming margins for the same reason that Clinton appealed to so many older women in 2008 over Obama.

  39. 39
    Barbara says:

    @David Anderson: I look forward to your more detailed analysis. For more than 20 years, after reading the 1000+ page proposed Clinton health reform, I have refused to read legislation that has not been enacted unless someone pays me to do it. So I think this is great.

  40. 40
    Baud says:

    I don’t see how anything reasonable passes the House.

  41. 41
    bupalos says:

    Wondering if there aren’t just poison pills for both sides. Block grant medicaid is pretty much a non-starter, and I’d guess any kind of mandate of equal dollars spent and “if you like you’re obama-care you can keep it” is a non-starter for the teahadists.

    There really isn’t any impetus for anything to happen in the senate. I’d expect anything coming from there is most likely a stealth attempt to keep the status quo for years. Which works for me.

  42. 42
    PhoenixRising says:

    @Southern Beale: HSA was great as a tax dodge for years and years when both family members needed $0 medical care and we used the money on glasses and the dentist.

    Then the doctor said, we need to schedule a biopsy. HSA down $4300, to $3800 (that’s 3 years of the max contribution, if you’re trying to follow along at home).

    The lab called 10 days later and the rest was gone in 32 minutes of anesthesia.

    So, no savings left for the next set of expenses, a crap policy that didn’t want to pay because…wait for it…that rare cancer no one in your region of the US will risk a malpractice claim to treat? Too bad, because we only pay 80% of out-of-network for the constrained network we cover in your state and AZ. Ha ha ha, that’s funny, you got a disease we don’t have to cover any of the treatment for, and the travel is your problem too! Hilarious. Not only was the ‘savings’ inadequate when fully funded, the coverage was crap.

    The timing was perfect, though: the expenses were rolling in to underwriting as they sent out renewal letters for individual policies in fall 2011. I got a cancellation letter on Friday, then an offer for 2012 policy choices the next Wed. Because they HAD to.

    But for the ACA, which forced them to offer me coverage choices for the following year at ZIP code rated prices, we would have lost our house.

    Once the exchanges kicked in and we had to buy real coverage, and they had to sell it to us, things got easier. But we were the best-case for HSA plus HDHP coverage and it didn’t work. It doesn’t even work if you HAVE the money to fund the HSA, is my point.

  43. 43
    Yoda Dog says:

    @amk: Oh fuck no he didnt. Holy shit fuck that guy. Fucking fraud.

  44. 44
    Ohio Mom says:

    Okay, my thing is Medicaid. A Medicaid Waiver is what will hopefully provide a roof over my disabled kid’s head after DH and I go to our rewards.

    How would the block grant be divvied up among those getting health care coverage under the expansion, disabled people, elderly people in Medicaid nursing homes, and any other category of people currently on Medicaid? In my state at least, some families who adopt (definitely those who adopt hard to place kids) get Medicaid for their kids — that is something I am only vaguely aware of. I imagine there are other categories of Medicaid recipients.

    What I am trying to say is, even before the expansion, Medicaid was a big, multi-faceted program. I didn’t know very much about it before, just took it for granted. Not sure I’m going to understand any explanation of what the new version is going to be like, either.

    All I do know is that the Medicaid population is the most vulnerable, and without a strong lobby. Well, except for those nursing home owners.

    I want to add that I don’t want Democrats to do anything but block every effort of Republicans on every issue. i am not advocating for accepting this proposal.

  45. 45

    Charles Pierce:

    Are there health savings accounts in there? Of course, there are. But the basic philosophy, coupled with the musing from official sources that the administration plans to block-grant Medicaid to the states, leaves the healthcare of millions of Americans hostage to characters like Sam Brownback in Kansas and Scott Walker in Wisconsin, and to collections of characters like the state legislature of North Carolina. This should not make anyone optimistic about the freedom that Cassidy and Collins are promising them.

    I would expect that if there is an opportunity for the federal government to underfund the plan, this Congress will.

  46. 46
    Another Scott says:

    @PhoenixRising: That’s horrible. :-( And a perfect illustration of why savings cannot replace medical insurance for 99.99% of people. That’s why these smoke and mirrors “savings accounts” as replacements for Obamacare (and all the rest) need to be fought tooth-and-nail.

    Have you told your story on


  47. 47
    rikyrah says:

    Thank you for this. It’s so geeky and wonky, Mayhew. But, thank you for taking the time to explain the nuts and bolts of this travesty.

  48. 48
    elm says:

    The Democratic counterproposal should be Subtitle B and none of the rest.

    This plan has no chance of getting out of committee, so its use is purely political. Democrats should tease and hint and hem and haw that they’ll support it if only… and drag it out for a year or more just like Collins did in 2009 and 2010.

    Politically, we should pressure Republicans to choose and agree to a replacement plan before they talk any more about repeal. Change the conversation to insist on a replacement plan asap.

  49. 49

    I am unable to locate section 530A of the Internal Revenue Code or the phrase “Roth HSA” in the code. I wonder if this is a drafting error, or a magic asterisk.

  50. 50
    dp says:

    @schrodingers_cat: What about Bill “Crazy Eyes” Cassidy?

  51. 51
    BBA says:

    @Raven Onthill: 530A is a new section added by this bill, starting on page 46.

  52. 52

    HSAs are in because they’re an opportunity for the financial services to get more money to play with and also because they’re a way to make people feel very guilty about not saving enough. There is a whole industry that will try to sell you on investing your HSA money in various uninsured securities and I cannot stress strongly enough that this is unwise; you cannot predict when you will need the money.

  53. 53
    dp says:

    Questions, and sorry if the answers are in the original post. If they are, I missed them.

    1) Is Medicaid block granted?

    2) If a state retains Obamacare, who pays the subsidies — the state or the feds?

    3) I caught that will remain optional for those states that never set up their own exchanges, right?

    4) Bottom line — how much cost is devolved to the states from the feds?

    5) And how is it proposed that the feds will pay whatever share is left to them?

    6) And will these supplemental policies involve the selling across state lines foolishness?

    This seems the least terrible of the terrible GOP health care plans. David/Richard, thanks again for your insightful posts concerning this hypertechnical topic.

  54. 54
    Another Scott says:

    @Raven Onthill: The Internal Revenue Code is US Title 26.

    HSA’s are mentioned in 26 U.S. Code § 223 – Health savings accounts.

    530A should be listed here, but it’s not. Something hasn’t been updated, or something else is going on…



  55. 55
    Another Scott says:

    @BBA: Thanks for pointing that out. The bill seems designed to be as convoluted as possible, and talking about 530A as if it already exists is part of that.

    I wouldn’t be surprised if 99% of bills are like that, but it’s a sign that they’re trying to hide crap from normal people, IMHO.


  56. 56
    elm says:


    My understanding of your questions is as follows:

    1) Yes

    2) Feds, at 95% of ACA subsidy amount.

    3) Yes, for ones that choose ACA continuation

    4) Unclear, the 95% funding amount suggests a 5% devolution of cost to states/individuals.

    5) No new funding in evidence

    6) Somehow no.

    And yes, it is the least-bad the Republicans could produce and it will almost certainly die in committee.

  57. 57


    My quick skim says it looks like individuals are allowed to contribute up to $5,000 a year to the new HSAs and use it to purchase health insurance and pay other health care expenses. The money will be untaxed, which is of course favorable to people with higher incomes in higher tax brackets, but so far as I can see many people will not be able to afford adequate insurance without subsidy, and then where is money for deductibles, co-insurance, and co-pays going to come from? The trustees will be banks and insurance companies, which sounds like another conflict of interest.

    Not sure how this all works together and will wait for expert analysis. My first thought, though, is that this looks like it is inadequate funding, and subject to insurance company investment risks as well.

  58. 58
    elm says:

    @efgoldman: David’s pretty new here. He should talk to a veteran like Richard Mayhew on formatting.

  59. 59
    dp says:

    @elm: Thank you. And LOL on your response to efgoldman.

  60. 60
    fuckwit says:

    Wow. If I’m reading David/Richard’s analysis right, then this is a good bill and would keep the PPACA alive and successful.

    I’m kind of surprised by that. And a bit suspicious.

  61. 61

    @fuckwit: I’m up for Democrats to have further discussions about a bill along these lines. This is an actual bill that is trying to grapple with an ugly problem and I think there are some very interesting points in it. Is it the bill I would pass if I had a veto proof majority of me and my clones? No. Does it improve the status quo for some people who need significant help, yes. Does it have trade-offs. Yes. Is it worth talking more and seeing if it can be improved for either actual implementation OR wedging the House GOP caucus, hell yes!

  62. 62
    elm says:

    @David Anderson:

    wedging the House GOP caucus

    I think this is its single best feature. I don’t believe it can escape committee in the Senate, but if we can get the Senate GOP to start talking policy instead of burning the country down then that’s a win.

  63. 63
    Another Scott says:

    @elm: Respectfully, I think we have to look at the big picture.

    Helping the GOP look more reasonable is not in the Democratic Party’s nor the Nation’s interest at this time. Trump is a monster. Everyone in the GOP caucus in the Senate has been acting as a brick wall in trying to improve healthcare, jobs, etc., in the USA simply because Obama was President. Their intransigence left us with 8 SCOTUS justices when there should be a 5:4 Democratic majority.

    Far more people will be helped by showing the country the results of letting the GOP run things. They are in the majority, they have the votes to do what they want, they need to own their policies. Blurring the story yet again into “both sides do it”, “both parties cut the ACA”, “both parties turned healthcare from a right into a block grant that means it will get worse every year”, those things are not the way to long-term progress.

    I realize this is putting me close to the “burn it all down” / “heighten the contradictions” camp that I usually decry, but the GOP is setting all the rules. They vote as a block. They determine the outcome. This is very different from the days of back and forth and horse trading and compromise when it is vital to give and take to get half a loaf rather than none.

    Sure, talk reasonably and see how flexible they are. But when the time for the vote comes, this is GOP legislation and they should own it alone.

    There is no sensible reason for Trump’s EO cutting up Obamacare, and there’s no sensible reason why the GOP wants to repeal it. It’s all politics. The problems with it could be fixed very easily without turning into HSAs and Block Grants and all the rest — things that are designed to destroy the national commitment to healthcare for everyone. We can’t let the people lose sight of that.

    My $0.02.


  64. 64
    elm says:

    @Another Scott: I absolutely don’t want this to pass. I think it’s worse than the status quo and not something I want to see become law.

    But I think it’s instrumentally and politically useful to use this plan (which Republicans will not pass) as a rhetorical foil. Use it to make Republicans talk about policy and argue amongst themselves.

    I think 0 democrats should vote for it, as I said upthread. I think Democrats should string Collins along the way she did in 2009 and 2010 and then give her 0 votes for cover.

  65. 65
    rikyrah says:

    @Another Scott:
    NO Democratic help for them

  66. 66
    Another Scott says:

    @elm: I realize we’re not that far apart, but I don’t see how we can use the same rhetorical devices the GOP used.

    We have people on the lefty left who accused Obama for 8 years or more of just wanting to sell us out, privatize Social Security, and all the rest. We have Wilmer and others screaming about how horrible NAFTA is, while Obama tried to explain very patiently that the TPP fixes a lot of NAFTA’s problems. I could go on. Trying to string the GOP along by saying, “well that sounds reasonable, but let’s modify it a bit to make it better” will get turned into “the Democrats want to turn Medicaid and Medicare and Social Security into a Block Grant”.

    We don’t have the media fighting to find that one true Moderate Republican™.

    I don’t think it will work.

    Supposedly one of the lessons of politics in the post-Reagan era is that people don’t vote on policies. They vote on “authenticity” and “knowing what s/he believes in” and touchy-feely impressions like that. If that is the case, and it seems that too often that is the case, then standing up for our principles and refusing to get in a bidding war that we can’t win under a GOP majority, seems (to me) a safer and probably more effective approach.

    But we’ll see. Schumer and Pelosi and all the rest of the leadership aren’t stupid. They’ve seen this play before and know how it ends if the GOP isn’t effectively countered.


  67. 67
    pattonbt says:

    @Another Scott: I’m here with this. Let the R’s go full bore ahead and own all of it. D’s should just sit on the side and vote when votes come up. No participation – even if it an overall improvement on the ACA. Apparently the R’s are the healthcare experts and have promised they can provide more, better and cheaper – lets see it and if it is I’m sure the D’s will vote yes.

    D’s should only vote yes if it’s more, better and cheaper. No votes for any reduction.

  68. 68
    elm says:

    @Another Scott: I don’t think Democrats in the Senate need to support this so much as Democrats in Republican districts can use it to harass their Republican Senators and Representatives.

    I think we can both agree that the Republican Senate and House claims to support Repeal and Replace but never plans to pass a replacement that is worth anything. They don’t agree on a plan and most of them want to avoid committing to any plan. Given that they don’t want to commit on their shitty “replacement”, they would much rather repeal the current ACA and then forget about the whole thing.

    So I see this as a chance to promote Republican infighting and encourage them to argue about details of these plans rather than repealing anything.

  69. 69

    Loren Anderson of Brookings has an analysis of the “Roth IRA” section up in tweetstorm form. See and

  70. 70
    ArchTeryx says:

    Admittedly, my view on this is strictly selfish, but it does have some larger utility.

    “Does this kill me?” is pretty much how I judge any Potemkin Village “replacement”. If the answer is “no” then at least they acknowledge that leaving the ACA largely intact is the only viable way going forward. If the answer is “yes”, then a whole lot of other Medicaid and individual-insurance folks are going to die with me, and it means they still only care about ‘repeal’ with ‘replace’ being nothing more then a fig leaf to hide the mass graves.

  71. 71

    @ArchTeryx: Very critical. In deep blue states, you are under no threat. In Texas you might be better off under this than current Texas policy….

  72. 72
    Buskertype says:

    How high is the deductible in “high deductible insurance”?

  73. 73

    @Buskertype: Not enough details to figure that one out. I need to know what the money calculation is based on before I can make a wild ass guess

  74. 74
    Barbara says:

    Here is a lesson I learned over the many years I have been working on health care regulation: things that are tweaks or forward looking can be changed and improved. Things that dismantle or gut the structure of a program will be, for all intents and purposes, permanent. They certainly won’t be revisited for at least 15 years. The two cardinal examples of this during my career were prescription drug and long term care coverage for Medicare beneficiaries (passed in 1988 and repealed in a mindless fury a year later, with drug coverage not re-examined until 2003 and long term care still not covered); and health care reform (killed in 1994, not revisited until 2009). Based on that simple analysis here is my reaction to what I have seen so far:

    Hills to die on: Medicaid block grants
    Hills to keep fighting on: high deductibles that mostly leave the rest of the ACA structure in place.

  75. 75
    Buskertype says:

    @David Anderson:
    Thanks for sharing your thoughts on all this… it’s a lot to wrap my head around, but this has really helped

  76. 76
    Another Scott says:

    @Barbara: That’s my gut reaction as well – especially for anything that requires significant funding.

    However, these are not normal times. Look at what we were able to accomplish in the 72 days in 2010. With a large enough majority in the House and Senate, things can change for the better very quickly.

    And it will take time for them to destroy Medicaid even if they want to turn everything into block grants, so there is some time to reverse their changes.

    We know how to fix the problems the country has in health care, the environment, family incomes, and on and on. The answers are known, we know how much it costs, and we know who has the money to pay for it. We just (“just”) need large enough majorities to have the votes to make it happen. How to win the races to get those votes is the problem…



  77. 77
    burnspbesq says:

    I would presume people who live in high cost areas will see more subsidy than people who live in low cost areas.

    I would presume that ultimately this will reverse. You’re going to have to give the Freedom Caucus types something to get their support, and the ability to inflict pian on coastal elites may be what it turns out to be.

  78. 78
    burnspbesq says:


    How high is the deductible in “high deductible insurance”?

    FWIW, in our firm’s plan the two high-deductible options have family deductibles of $3,600 and $5,000. They push HSAs really hard. For a top-tier professional services firm, where probably two thirds of the headcount makes six-figure salaries plus a 20 percent bonus opportunity, it’s sensible for most people. In any other segment of the economy, it would be bullshit.

  79. 79
    Barbara says:

    @burnspbesq: High deductible plans operate as a de facto premium surcharge for people with chronic conditions, who are virtually certain to use services that fall within the deductible amounts. The ACA removed services classified as preventive from the deductible requirements, and this helps many people, but it does not help people who face chronic illness. There has been some effort to enlarge the kind of services that count as preventive — for instance, taking medication for conditions like high blood pressure and asthma, but I don’t think HRSA has gone for this, but individual states might have. It used to be that prescription drug benefits had separate, lower deductible amounts, and that might still be the case in some state EHB plans.

  80. 80

    @burnspbesq: no, this is Arizona and Alaska not New York City

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