How to read the Senate Bill

The Senate healthcare and tax cut bill is expected to drop in a few cups of coffee. There are a ton of rumors floating around. Here is a cheat sheet on how to read it.

1) Reconciliation places severe constraints on the bill

a) The Parliamentarian is most likely going to be stripping out significant non-germane to the budget items
b) $1 billion in savings must come from each of two committees (HELP and Finance)
c) Anything the Senate passes must meet or beat the $119 billion in budget window deficit reduction that the House AHCA was scored at.

2) Three major pots of money

a) Tax cuts
b) Individual market changes
c) Medicaid cuts to pay for tax cuts

3) Follow the money
Any extra dollar used to pay for a slower Medicaid termination has to come from either Medicaid on the back-end, fewer tax cuts or lower individual market changes. Anything used to up subsidies on the individual market has to come from itself, faster/steeper Medicaid cuts or fewer tax cuts. Anything that ups the tax cuts must come from the individual market or Medicaid…etc.

4) Index rates matter
Slower terminations but lower index rates on per capita caps is a budget gimmick. It gives a little bit of money in the 10 year budget window but leads to massive cuts in the out years against the current counterfactual.

5) Market design and incentives matter

a) Look at where the work disincentives apply

a1) Medicaid expansion where the FMAP disappears once a person churns out once
a2) Medicaid expansion to individual market transition without CSR as people move from high AV low premium insurance to low AV high premium insurance if they earn a dollar too much
a3) 350% FPL instead of 400% FPL

b) How does the individual market function without a mandate and without the patient and state stability funds?

6) More coffee is better

52 replies
  1. 1
    Betty Cracker says:

    The back loading aspect worries me the most and also gives me hope. I shows that the GOP is afraid of implementing drastic cuts even though every one of the bastards claims they ran on ending Obamacare and pretends that it’s a popular position, which it’s not. They’re implementing it slowly to avoid blowback. But that tactic also makes it susceptible to reversal if the political winds change, no?

  2. 2
    Mike J says:

    This bill makes everything Republicans complained about with Obama are worse. Higher premiums, higher deductibles, fewer people covered.

  3. 3
    RobertDSC-Mac Mini says:

    I fully expect a new Parlimentarian if the current one doesn’t do things the way Turtle wants.

    Goddamned bastards.

  4. 4
    Mary G says:

    Without a mandate, nothing will work.

  5. 5

    @Betty Cracker: Correct. The interesting take on health wonk Twitter given the rumors over the past 48 hours is that this is setting things up to be a Sustainable Growth Rate scenario where mega cuts are promised next year for the next twenty years but a series of 1, 2 and 3 year laws to push the deadline out are adapted on a routine basis.

    @RobertDSC-Mac Mini: Agreed.
    At some point the Senate is going to be a 51 vote institution on everything which should enable liberal/progressive goals over the long run so we might as well just get there.

  6. 6

    @Mary G: It will somewhat work but far worse as long as there are subsidies

  7. 7
    Ohio Mom says:

    @Betty Cracker: My fear is that the back loading disarms the backlash (which is of course the reason the Rs are using this approach). People will think, “It’s not so bad,” overlooking that it will get a lot worse later.

    I see this in my area’s disability community. They can’t see that far ahead. They think our community is immune.

  8. 8
    Bupalos says:

    @Betty Cracker: well yes, sort of. However the key here is you need all 3 branches to change anything, and their bet is that they can hold at least one for long enough that everyone forgets how this came about

  9. 9
    randy khan says:

    I think the tl;dr version is that the real question is only what ways the bill will be terrible, not whether it will be terrible.

  10. 10
    Ohio Mom says:

    P.S. Thanks for the”how to read” tips David but I have no intention of even glancing at the bill. I’m coming back here after today’s appointments and errands to read your summary.

  11. 11
    JMG says:

    @Betty Cracker: It seems politically unwise to me, because it puts an unpopular bill in play for multiple elections. Repeal Trumpcare may or will be the Democratic rallying cry in 2018, 2020, etc.

  12. 12

    @Ohio Mom: Oh, I fully expected that as the Balloon Juice health arcana blogger. I wrote this as much to frame my own crazy Ctrl-F-ing of the bill once it drops as for anyone else. :)

  13. 13
    Wag says:

    6) More coffee is better

    Today the coffe may need a little help to make things right. Kailua? Jamison’s?

  14. 14

    @Wag: That is for after the bill read through not during… need to be clear headed to know what I need to drink away to forget

  15. 15
    Feathers says:

    It amazes me how many prissy Repubs don’t seem to realize that this could mean Grandpa (or Mom) having to live with them. They “oppose” Medicare because Mom & Dad have to spend down their savings before becoming eligible, but they don’t have the imagination to realize the alternative is Mom’s care coming out of their pocket instead.

  16. 16
    D58826 says:

    Just a couple of thoughts. Sen. Cassidy on Chris Hayes the other night was explaining that Obamacare is unpopular because of the individual mandate. Americans don’t like to be told what to do he said. The beauty of his plan is that every American will be auto enrolled. What am I missing here? Put ham, cheese, shredded lettuce, tomato, and pickles on a long roll and it is the same thing whither you call it a hoagie or a sub or a poorboy.

    Now the 10 year year window might work in the GOP’s favor for Trumpcare but it creates a problem for ZEGS tax plans. In order to do the second part of welfare for the rich using reconciliation, the cuts must expire in 10 years. Remember all of the festivities about extending the Bush tax cuts in 2011. ZEGS is afraid that in 2027 a democratically controlled DC might let the cuts expire. He is concerned that the people affected by that might come to his office tomorrow and beat him upside the head with a 4×8. What is a ZEGS to do. I know – he will propose changing the reconciliation rules so that a temporary tax cut will have a 30 year time horizon rather than a one lasting only ten years. Now maybe a democratically controlled DC will still let it expire in 2047 but it will be some other ZEGS’s problem

  17. 17
    D58826 says:

    @Feathers: I understand ice flows are on sale this year. Granny + ice flow = problem solved. And since it doesn’t involve death panels it is still considered pro life.

  18. 18

    @D58826: The tax cuts only have to expire in 10 years if the bill that they are attached to adds to the deficit in the out years. The Medicaid cuts are used to pay for the tax cuts in the out years so they are effectively permanent.

    The Bush tax cuts never had a single pay-for, that is why they had to expire.

  19. 19
    Enhanced Voting Techniques says:

    @David Anderson:

    Correct. The interesting take on health wonk Twitter given the rumors over the past 48 hours is that this is setting things up to be a Sustainable Growth Rate scenario where mega cuts are promised next year for the next twenty years but a series of 1, 2 and 3 year laws to push the deadline out are adapted on a routine basis.

    So basically, crappier health care, but a more bloated deficit, because tax cut are magic. Republican for you.

  20. 20
    James Powell says:

    @Bupalos:

    and their bet is that they can hold at least one for long enough that everyone forgets how this came about

    They’ve really got the house nailed down so that it will take a major disaster for them to lose it and they’ve got the supreme court for the next 20 years.

  21. 21
    JMG says:

    The Supreme Court has nothing to do with tax policy or the budget. The next time Democrats are in the White House and the Congressional majority, they will, make that they’d better, cram through significant tax increases on the wealthy and restoring Obamacare with the same bulldozer tactics the Republicans are using. Because that’s the promise they’ll have to make to win those elections.

  22. 22
    But her emals!!! says:

    Medicare/Medicaid impact are delayed. Impacts on employer health plans and private insurance are likely to be immediate, as will the impact on the total % of insured Americans.

  23. 23
    rikyrah says:

    THANKS for the breakdown. Will spread the word.

  24. 24

    @Ohio Mom:

    P.S. Thanks for the”how to read” tips David but I have no intention of even glancing at the bill.

    Neither does Trump.

  25. 25
    rikyrah says:

    Looks like the Senate bill could effectively phase out Medicaid *entirely.* via @imillhiser https://t.co/o9uemxuB2b pic.twitter.com/gxEDIIaw1N
    — Ned Resnikoff (@resnikoff) June 22, 2017

  26. 26
    Aaron says:

    No one drinks coffee anymore. They have all switched to covfefe.
    Now when is it appropriate to start talking about using my 2nd amendment remedies to liberate our country from tyrany? before or after they f–k up my obamacare?

  27. 27
    hovercraft says:

    @D58826:

    What am I missing here? Put ham, cheese, shredded lettuce, tomato, and pickles on a long roll and it is the same thing whither you call it a hoagie or a sub or a poorboy.

    The Koch’s and the right haven’t spent 2 billion dollars demonizing auto enroll, so the term is not unpopular yet. Remember it’s not the medias job to really explain shit, so there’s no need to tell people that it’s the same fucking thing. After all both sides……………

  28. 28
    rikyrah says:

    10 health insurers speak out against Medicaid cuts https://t.co/UZjnYyeNKp
    — The New York Times (@nytimes) June 22, 2017

  29. 29
    Jim, Foolish Literalist says:

    Ben Wikler‏Verified account @ benwikler 3h3 hours ago
    These Medicaid cuts are insidious. Designed to get bigger every year—so, outside window that CBO scores, they asphyxiate the program. 1/
    Right now, Medicaid is a guarantee. if you’re on Medicaid, you wake up w crushing headache, docs find brain tumor, your care is covered. 2/
    If there’s a spike in cancer—or say opioid addiction—in your state, federal funds will help cover it all. Trumpcare ends that. 3/
    Under Trumpcare, states get a fixed, capped amount of $ per person (diff amt for kids, older adults, etc). If need grows, $ doesn’t. 4/
    Medical costs have always grown faster than general rate of inflation. Under Senate Trumpcare, Medicaid caps lock to rate of inflation. 5/
    Senate Trumpcare means a giant Medicaid cut—and one that gets more vicious every passing year. Even worse during health crises. 6/
    State budgets will be crushed by a vise. As Federal Medicaid $ disappear, they’ll slash schools, roads, public safety to fill the hole 7/
    Trumpcare won’t just devastate health care. Everything your state government does is in danger. 8/
    Rural hospitals will literally close. Class sizes will rise. The only people who benefit: the wealthy who get a tax cut. 9/
    Senate Trumpcare is worse than House Trumpcare. And House Trumpcare was horrible. 10/

  30. 30
    mai naem mobile says:

    Fuck the coffee,more like more alcohol would work bettwr. Screwdrivers with Russian vodka maybe.

  31. 31
    mai naem mobile says:

    @Jim, Foolish Literalist: please please let them hit the Dolt voting rural areas the hardest. It’s only fair.

  32. 32
    mai naem mobile says:

    @JMG: won’t happen because of the Heidi Heidtkamps and Joe Manchins of the world.

  33. 33
    Jim, Foolish Literalist says:

    @mai naem mobile: I don’t know to what extent we can count on Angus King for hardball stuff like that, either. He’s been great on the Russia stuff, wobbly on a few other things– voted agasint gun safety post-Newtown, IIRC

  34. 34
    nightranger says:

    It’s a done deal. It’s gonna pass. Doesn’t matter what is in it. I just wish Dems orginally had the balls to kill the 60vote thing like Repubs did and pushed more progressive things through to make it more work for Repubs to tear it all down.

    Don’t kid yourself. America is not a properly functioning democracy anymore. It’s a Plutocracy.

    I used to think Harry Reid was on my side fighting the good fight until I found out he killed a bipartisan bill that was going to reform the broken patent system. It had bipartisan support and was going to make it harder for patent trolls to abuse the system. Then I found out that he got large campaign donations from lobbyists who essentially representing patent trolls.

    So I kind of lost faith in this idea that America is still a functioning democracy after that.

  35. 35
    mai naem mobile says:

    Please call it Trump care and if it gets passed “GOP controlled congress passed Trumpcare” and if Manchin and Heidtkamps don’t get peeled off,TrumpCare passed only with GOP support. Trumpcare has to be an anchor every GOPr has to carry.

  36. 36
    D58826 says:

    @David Anderson: AH thanks. Washington is complicated.

  37. 37
    But her emals!!! says:

    @Jim, Foolish Literalist:

    And for the states that don’t really have anything to cut, because they’ve already cut everything that isn’t paid for with federal money to provide tax cuts?

  38. 38
    Peale says:

    Ah, I see the trolls are already out. The Republicans are doing something awful! It’s Harry Reid’s fault!

  39. 39
    But her emails!!! says:

    @Peale:

    Ah, I see the trolls are already out. The Republicans are doing something awful! It’s Harry Reid’s fault!

    Republicans are going to pass a law that will cause 23 million people to be covered by insurance, ultimately guts medicaid and as a bonus screws over people with employer plans, but Harry Reid prevented a patent law that I think was good from passing so both sides are the same!

    Also, anyone know if that patent law was actually a good billion. That it was bipartisan makes me suspect that it was probably a mixed bag.

  40. 40
    Peale says:

    @mai naem mobile: I don’t think you’ll have to worry about Manchin being pealed off. There is no benefit for him. This isn’t like wavering on gay marriage or mining bills. Most of the GOP is going to deny voting for this, so I don’t know why he’d want to be the national figure everyone points to as the reason it passes.

  41. 41
    Riley's Enabler says:

    The new pie filter is lovely. Such tasty Pie. Thanks, Alain!

  42. 42
    JMG says:

    Manchin, Heidtkamp, et. al. have been very strong, stronger than I expected, to date. Since the Senate bill effectively makes the health care system much worse than it was in 2008, let along today, I imagine they are no votes. But I stand by my prediction every Republican will vote yes. Susan Collins will express regrets she had to break her word about Planned Parenthood. Rand Paul will say, well, taking 20 million people off health insurance isn’t as good as abolishing insurance, but I’ll take what I can get. Some of those Senators will be marching in 4th of July parades. May they be met with rotted fruit and eggs as they pass by.

  43. 43
    NYCMT says:

    I wonder who is modeling the macro effects of Trumpcare: senate version? If I remember my income tax class right (checks IRC s. 179) seven years is the depreciation schedule for medical equipment investment, and that, plus general falling revenue expectations for rural health care providers, should pretty much kill health care business expansion dead in the teeth of the boomer retirement bulge. That’s a half million jobs a year, right there. Plus multiplier effects, at 1.5 to 1.6, about 750,000 jobs per year.

  44. 44
    nightranger says:

    @But her emails!!!: Ha…wrong….but keep following your gut….over the cliff.

    Cancervatives are the problem. I am just saying that Harry Reid (and Dems by association) sold us out on other things. The one I know about is patent reform but there are probably other things I don’t know about.

    My point is that these are all signs America is no longer a properly functioning democracy.

  45. 45
    But her emails!!! says:

    @nightranger:

    I’m not so sure about that. In a Democracy, to pass legislation, you have to hammer together and account for numerous competing agendas and needs. By definition that requires compromise and with compromise some voters and interests are going to be sold out.

  46. 46
    Mike J says:

    Senate D Floor Watch‏ @DSenFloor 5 minutes ago
    Murray: Ask consent that a substitute amdt not be in order unless the text has been reported favorably from HELP Committee.

    Cornyn objects

  47. 47
    Ohio Mom says:

    @Certified Mutant Enemy: Ha. I thought the only things I had in common with Trump were growing up in Queens and knowing the same optometrist. (The optometrist connection is a bit of an exaggeration, my guy met him at an eyeglass frame expo many years ago when Trump had a short-lived lend-his-name-to-a-frames-company business).

  48. 48
    Ohio Mom says:

    @Feathers:
    MediCAID is what requires a spend-down and pays for nursing homes for the destitute elderly.

    MediCARE is health insurance for those over 65, no matter what your personal financial situation is, you can be a millionaire.

    It took me a while to get those two programs straight.

  49. 49
    randy khan says:

    @Mike J:

    They should keep this up.

  50. 50
    Another Scott says:

    The Hill has pretty good live coverage of what’s happening at the moment – like protesters in wheel chairs being dragged away from McConnell’s office.

    The text of the Senate bill is here (142 page .PDF)

    Keep fighting!

    Cheers,
    Scott.

  51. 51
    elm says:

    The bill is straightforward in that it begins with massive tax cuts exclusively for rich people in unearned income and gets worse from there.

    It links subsidy amount to the median bronze plan (and cuts bronze from 60% AV to 58% AV), it also cuts subsidies again by applying a new table to what % of your income you should be expected to pay. For a person over age 59 and making 300 to 350% of poverty level income, the expected personal contribution goes from 11.5% to 16.2%. Past 350% of poverty, there’s no longer any subsidy.

    In other words, tax cuts for the rich and higher priced, yet worse, insurance for individuals.

  52. 52
    randy khan says:

    @nightranger:

    Seriously,, your complaint about Harry Reid is that he’s a politicization who didn’t do everything you want him to do. So Diogenes, let me know when you find a perfect elected politician. Until then, find something else to complain about.

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