Upton and more policy incoherence in the AHCA

The Upton Amendment is out. It is $8 billion dollars to pay for the late enrollment penalty of people in states who elect to waive non-underwritten guarantee issue so that these people don’t get dropped into the high cost risk pool.

The AHCA has a 30% penalty for up to one year if a person applies for coverage on the individual market after having a 63 day gap in qualified coverage. The theory is that this aligns the individual market with the employer sponsored market and it will act as a pool participation mechanism. The CBO disagreed as it projected the penalty would enhance the value of staying out of the market for the healthy far more than it would keep low cost people in the market.

This amendment makes the CBO position a highly probable underestimate. It does not change the incentive for the healthy to avoid the market until they have to get in. However, it weakens the incentive for the modestly sick to stay in if they have reason to believe that they are going to have a low cost year, they can drop coverage and then get back in at the next open enrollment.

The AHCA has thrown other key elements of conservative health policy goals overboard. The HSA life cycle model of savings in youth and health to self-fund expenses in age and infirmity was thrown overboard early in the process.

In the original version of the AHCA, the subsidies were set up so that they could be split. If a person found a policy that cost less than the subsidy, the remaining portion of the subsidy would be deposited into an HSA. This makes a decent amount of mechanical sense. The young and healthy people would buy dirt cheap policies and deposit a significant amount of the subsidy into an HSA. Over time, the HSA would grow until the cohort of people who were once young, healthy and cheap to cover are no longer young, no longer healthy and no longer cheap to cover. At that point, the savings they had accumulated in their HSA would be available to pay for either care or premiums…..

The Monday Manager’s amendment took away the ability of a subsidy to be split between a premium and the HSA…. The second is that it completely destroys the mechanical theory of change for an HSA system. People can’t use [the subsidy] to pay part of their first dollar expenses in the current year. And more importantly, the young can not partially prefund their health care expenses when they become old as they can’t rollover a partial subsidy into their HSA.

Upton makes a complete hash of any personal responsibility and anti-free rider logic ever advanced in the bill. This is a mess.






37 replies
  1. 1
    Ha ha haaaaa says:

    Just quit. We lost this fight in November.

  2. 2
  3. 3

    @Ha ha haaaaa:
    Nope, I’m going to fight for two reasons:

    1) This is a moral matter for me where if I don’t fight the stories that I tell myself about myself are bullshit.
    2) Inflict as much political cost on Republicans as possible.

  4. 4
    Weaselone says:

    I have to give the Republicans credit. They were challenged to make the ACHA even worse and that challenge was accepted and met.

    Also, given the impacts this late enrollment penalty support would have on the market, it probably would be grossly insufficient. A late enrollment penalty isn’t a penalty if the government pays it instead of the person making the decision to go without health insurance. It’s like the government covering speeding tickets and parking fines.

  5. 5

    @dmsilev: New demoralizing troll is here, that means this version of the bill is about to meet the same fate as the ones before it.

  6. 6
    Kay says:

    Democrats should just keep repeating “chaos and uncertainty”. People hate figuring this stuff out. They don’t want to – it’s too complicated.

    Also- from here on out every problem you have with health insurance is directly attributable to Trumpcare.

  7. 7

    They’re just going to throw favors to whichever wing of the party is threatening to hold out without any concern about what it does to the structure of the bill. That’s what happens when you abandon the discipline imposed by CBO scoring. I’ve said it before: the goal of these constant amendments is as much about presenting a moving target for the CBO as it is about winning over votes.

  8. 8
    Kay says:

    @Weaselone:

    I can’t believe they’re making it more complicated.

  9. 9
    sheila in nc says:

    @Ha ha haaaaa: Also, my guess is that whatever fight it was that we lost in November, what those people thought they were voting for bears very little relationship to what is currently being discussed in the House.
    Of course, they thought they were voting for a unicorn: lower premiums AND deductibles, no mandate, no essential benefits but not junk policies, lower cost of drugs and services, and the ability to cycle in and out of coverage without penalty. In other words, a free lunch.

  10. 10
    low-tech cyclist says:

    They really don’t understand this stuff at all. The AHCA is ‘reforming’ the ACA at a college bull-session level, after many beers.

    @David Anderson:

    Nope, I’m going to fight for two reasons:

    1) This is a moral matter for me where if I don’t fight the stories that I tell myself about myself are bullshit.
    2) Inflict as much political cost on Republicans as possible.

    Yes to all this.

  11. 11
    Kay says:

    @Roger Moore:

    You feel sorry for the people who are really vulnerable to changes. It must be terrifying. They’re so completely irresponsible.

  12. 12
    low-tech cyclist says:

    @Roger Moore: That’s what happens when you abandon the discipline imposed by CBO scoring not messing with stuff until you have a clue about WTF you’re doing.

  13. 13
    Kay says:

    All these hospital orgs and such stepping up now- seriously- where were these people when it mattered?

    They couldn’t just support Obamacare and lobby for changes? They had to leave the law undefended?

  14. 14
    low-tech cyclist says:

    @Kay:

    You feel sorry for the people who are really vulnerable to changes. It must be terrifying. They’re so completely irresponsible.

    And these GOP Congresscritters are playing with their lives like it was a game of Risk or something.

    Kinda like Iraq, only closer to home.

    How the everliving fuck do these people look in the mirror?

  15. 15
    tobie says:

    Just wanted to thank David Anderson for the line about “no CBO score, no vote.” Just tried that with my tea partying Representative and it seemed more effective than all the other arguments. He will vote for this turd but at least I didn’t get the usual dismissal of my call.

  16. 16
    satby says:

    PSA for the gardeners: this place is having a clearance sale that ends tonight and the prices are really good. I have had good luck with previous orders.
    And now, back to your regularly scheduled calling.

  17. 17
    satby says:

    Ok, I know it was OT, but moderation? Really?

  18. 18
    Ohio Mom says:

    Today my Rep isn’t answering the phone, and at one of his offices, the answering machine mailbox is full.

    I’m going to take that as a good sign, that they’re hiding from a deluge of angry callers.

  19. 19
    amk says:

    Reminder: AHCA takes $1T out of health programs Adding $8B to hi-risk pools — per @byrdinator — won't do squathttps://t.co/6ECqjna41t pic.twitter.com/SDkHtrCh0O— Jonathan Cohn (@CitizenCohn) May 3, 2017

  20. 20
    themann1086 says:

    Does this mean Upton supports the bill now? Or is this an amendment to try and get him back on board?

  21. 21
    Barbara says:

    Random and chaotic. Still, I wish David and everyone else would put at the beginning or end: Still the same devastation for people with Medicaid. Still pulls out hundreds of billions of dollars from funding health care and gives it to wealthy people who don’t need it. Those things are unchanged. The rest of this is random bullshit being thrown at people so they can pretend to have principles.

  22. 22
    LurkerNoLonger says:

    How much lipstick are they gonna put on this pig before they realize no one wants to fuck it?

  23. 23
    dmsilev says:

    @schrodingers_cat: Yeah, I figured as much. It was worth spending 3 characters in response, but not any more than that.

  24. 24
    randy khan says:

    @themann1086:

    That’s my question. It seems like Ryan would take it to get Upton’s vote, but it’s really just a fig leaf, given the amount of money (it’s not even $8 billion a year – it’s $8 billion over 5 years).

  25. 25
    randy khan says:

    LoBiondo (NJ-2)’s office says he’s reviewed the changes and is still a no.

  26. 26
    zzyzx says:

    It’s almost as though this isn’t designed to make a coherent health care policy but rather is a cynical attempt to get a vote for something that Trump can spin as a win regardless of what it does.

  27. 27
    Barbara says:

    Washington Post has 29 as being undecided, here: https://www.washingtonpost.com/graphics/politics/ahca-second-whip-count/?hpid=hp_rhp-top-table-main_healthcare-whipcount-1%3Ahomepage%2Fstory&utm_term=.346de35a6e55

    These include Balart and Curbez from Florida (with close to 200,000 people covered through exchanges in their district) and no fewer than 8 California reps, who will be selling out their entire state if they vote yes. Paul Ryan can only lose one of these 29. If you live in California or Florida, you should be calling the offices of all these people. Even if you don’t live in their district, you live in their state, and their vote will hurt you.

  28. 28
    Seanly says:

    Wait, is this pittance of $8 billion the big amendment wrt pre-existing condition that GMA was acting all gaga about this morning? LOL
    While it’s great that we keep pushing the invaders off the ramparts, but how long can we keep it up? Won’t Congress just be like all those R-led state legislatures* and keep trying until they gut ACA? We’re still 18 months from 2018 elections.
    * like in TX where Wendy Davis stood up against their anti-choice BS. She won a battle but then they did typical Republican BS and passed it the next week.

  29. 29
    oldster says:

    Thanks for keeping us informed, David. I followed your script today on my calls:

    1) The Upton amendment is Mickey Mouse. The bill still takes away $1 Trillion dollars from health care, and the Amendment puts back $8 billion. That’s like me taking one thousand dollars out of your pocket, and giving you eight bucks back.

    2) There still is no CBO score on this bill. If it’s a good bill, then score it. If you can’t score it, you must vote no.

  30. 30
    oldster says:

    Incidentally–I asked the nice young man on the phone if he had read about the Upton Amendment. He said that he had not had time to, because he has been on the phone all morning.

    Thank you, BJ’ers and others, for working those phones!

  31. 31
    Betty says:

    Rep. Scott Perry in Central PA still won’t even say what his position is. The aide I spoke with said she just wanted to hear what my position is so I explained. I don’t know if this is a good approach, but my latest tactic is to pose the question.”Who does this bill benefit? We know who it hurts, but who does it benefit?”

  32. 32
    Barbara says:

    @randy khan: Anybody in a blue state who votes for this is upending their entire state. The Medicaid provisions are a disaster for every state, but especially states like New Jersey and New York. It doesn’t matter how much money is being dangled in front of them for this and that, overall this bill makes things much worse. That should be the bottom line. They are shills for even being willing to be entertained with a little hush money.

  33. 33

    this amendment reads like it conflicts with nearly everything else the Republicans are threatening to do, as though it’s meant to appease people to vote for the AHCA… but it still makes the AHCA an unsupportable mess.

    just one more piece of evidence to the fact that Republicans – individually and as a party – have no f-cking clue what they’re doing.

  34. 34
    StringOnAStick says:

    I made sure I called both the local and DC offices of Coffman. I live in an adjacent district, but I know how to keep a list of useful address and zip codes on hand.

  35. 35
    rikyrah says:

    @Roger Moore:

    I’ve said it before: the goal of these constant amendments is as much about presenting a moving target for the CBO as it is about winning over votes.

    agreed with you about this.

  36. 36
    TenguPhule says:

    The worst part about all of these “proposals” about the AHCA being constantly brought up by the fucking Republicans is that they’re slowly poisoning the narrative about Healthcare in general in our country.

    Insurers see uncertainty.

    Hospitals see emergency care leading to financial black holes.

    The sick and injured see death.

    The Republicans may still succeed in mortally wounding the ACA simply by constantly coming up with worse and worse variations on a “replacement” that never happens and forcing all of the concerned parties to keep wasting time, energy and money to both beat them back while still trying to prepare for the worst to happen.

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