98 to 58

Andrew Sprung at Xpostfactoid notes one group of low income people who could be better off under the BCRA; poor people who would have been Medicaid expansion eligible if they lived in states that expanded Medicaid. The subsidy structure of the BCRA sells the baseline plan at 2% of income for people up to 100% of Federal Poverty Line. The Benchmark plan is 58% actuarial value.

The BCRA does toss a bone to the dis-insured poor by offering private-market subsidies to those who are shut out of Medicaid. Under the ACA, in the 31 states plus D.C. that accepted the law’s Medicaid expansion (rendered optional to states by the Supreme Court), anyone whose household income is below 139% of the Federal Poverty Level (FPL) qualifies for Medicaid, and so not for subsidies in the private plan marketplace (with one class of exceptions*). In states that refused the expansion — a possibility not envisioned by the law’s drafters — eligibility for Marketplace subsidies begins at 100% FPL, and those below that level are left out in the cold — because their state’s governors and legislatures wanted it that way. The BCRA allows people with incomes in 0-100% FPL range to buy a “benchmark” plan for 2% of income, and those in 100-133% FPL range** to buy one for no more than 2.5% of income…

For low income enrollees [ACA] – the majority of marketplace enrollees — silver plans are enhanced by Cost Sharing Reduction (CSR) subsidies that raise AV to 94% ….That usually means deductibles in the $0-250 range for people with incomes up to 150% FPL…
The Senate bills drops the AV of a benchmark plan to 58% — below that of the ACA Marketplace’s bottom-level bronze plans, which have an AV of 60%. Bronze plans generally have single-person deductibles over $6,000

Prof. John Graves from Vanderbilt has a great illustration of comparative actuarial value:

The value of these plans mainly accrue to providers and hospitals.

It is very hard to design a 58% AV plan given the lack of change in out of pocket maximum where there are any services excluded from cost sharing. Donut designs where a few PCP visits and low cost generic drugs are no cost sharing are plausible at 60% or 61% AV. Using the 2018 AV calculator, I could only get a 59% AV Bronze plan with a $7,150 deductible that applied to everything.

There is some money allocated to bring down out of pocket expenses. If it is used as a state based CSR, it is grossly insufficient compared to current funding. There is less money and a larger gap. Someone who makes 100% FPL today receives a 24 AV point bump to get to a 94% plan with a $100 deductible and $1000 out of pocket maximum. That same 24 point bump produces an 82% AV plan with an $1825 deductible that applied to everything. That person is still massively underinsured as the out of pocket exposure of 10% of their income.

So when someone who earns 100% of FPL or less has a catastrophic event, the benefits will be in the form of unpayable debt and care for them. The doctors and hospitals will have a fixed limit of unpayable debt. If there is matched CSR, it might be $1,825. If there is no CSR, it could be $7,500. For diagnoses that routinely generate $100,000 claims over the course of treatment in a year, this is an acceptable discount. For PCPs and low level specialists, this will be 100% bad debt.

This has an interesting risk pool aspect. Third party payment of premiums will be quite common for patients who are guaranteed to run up $50,000 or more claims. Paying a few hundred dollars to minimize the amount of bad debt an oncology practice incurs is a smart business decision. It will make the risk pool even uglier.

So yes, there will be some poor people who are better off because their states have refused to accept significant federal funds to provide 98% actuarial value insurance. Now they will be getting 58% actuarial value insurance for 2% of their income. But they won’t be able to use it for common care as they can’t come up with out of pocket first dollar cost sharing.






29 replies
  1. 1
    weaselone says:

    I have to give the Republicans credit on this. This is pretty sneaky. The reddest states are the ones that didn’t accept the Medicaid expansion. Now, the poorest in those states will have access to cheap “insurance”.

  2. 2

    @weaselone: The healthier ones aren’t going to take it. They don’t have $20 a month for a $7,000 deductible plan

  3. 3
    guachi says:

    It’s like a plan intentionally designed to be as cruel as possible.

  4. 4
    weaselone says:

    @David Anderson:

    That doesn’t really matter. It’s talking points, not policy.

    Any idea how this might impact rural hospitals and clinics in these states? Will it be enough to staunch the bleeding in these areas?

  5. 5
    D58826 says:

    sounds like damning with faint praise. sorta like ‘he said you weren’t fit to sleep with the pigs but I defended you and said you were’.

    From Twitter – ‘ 800k ppl on Medicaid in Alabama. These are trump voters and kids.’ Hope the Trump parents enjoy watching their kids suffer, and maybe die, from lack of access to medical care. And all of those Trump voters who lose their jobs when the rural hospital they work at closes.

    As their favorite book says – you reap what you sow.

  6. 6
    D58826 says:

    @guachi: Now you understand the plan.

  7. 7
    Another Scott says:

    McConnell and the rest of the Teabaggers have to see how horrible this is for people who don’t have any money. Maybe there’s some plan to “fix it” by shoveling subsidies and tax breaks to “supplemental insurance” companies to offer expensive policies?

    “Do you need BCRAP insurance but can’t afford it? Sign up for our new COFFIN insurance at no cost to you!! For the low, low price of $5 a day (which may be paid for you – call for details), you’ll get supplemental insurance that covers $200 of your annual $6000 deductible and … Call now! Operators are standing by!!11”

    :-/

    There’s always someone, somewhere who finds a way to rig the system and squeeze money out of it, with the help of their friends writing the bills…

    Oh, I just got a text that my best friend from high school, my Trump supporting ‘brother’, just found out he has leukemia and they want to start chemo ASAP. :-(

    (sigh)

    Cheers,
    Scott.

  8. 8
    D58826 says:

    What I still find baffling is that the GOP, esp. the leadership, hates Obama with such a passion that they forget every lesson they learned in Sunday School. That they probably would not treat a stray dog the way they want to treat 23 million human beings. I realize racism plays a big part but a lot of white folks are going to be hurt as well.

    What is the old line about hating the other so much that would would give up some food on a stick just because the OTHER has an empty stick. That is a lot of racism.

  9. 9
    guachi says:

    @D58826: Seeing the cruelty on paper makes it more evil. Like you’ve actually taken the time to determine just how cruel you wish to be.

  10. 10
    hedgehog mobile says:

    Me to mr.h: “Why don’t they just line us up and shoot us? It would be faster.”
    Him: “Bullets cost money.”

  11. 11
    D58826 says:

    @Another Scott: My Sunday school lessons tell me to wish your BIL luck even if he did vote for Der Fuhrer because it is the right thing to do. . So best of luck to him.

    ZEGS benefited from SS survivors benefits as a kid when his dad died. And I saw a tweet the other day that Yurtle received 100% gov’t medical coverage when he had polio as a kid. I didn’t get a chance to read the details but it was supposed confirming a story that had been floating about on social media.

    and to fracture another cliche I still don’t understand the willingness of so many to close their eyes to the possibility of ‘there but for the grace of God go I’.

  12. 12
    LurkerNoLonger says:

    What’s the deal with the subsidies in this bill that helps people afford the premiums for insurance like myself? I live in NY and am on the Essential Plan through New York State of Health. How much more will I have to pay per month if this monstrosity is passed?

  13. 13
    D58826 says:

    @guachi: Rand Paul and Ted Cruz are opposed to the bill because it isn’t CRUEL enough. Now this is probably a bit of kabuki theater that Yurtle is part of. Ted gets up on little reptilian legs, makes a couple of hissing sounds about it not being tough enough, Yurtle throws him a small bone from his bag of theater props, Ted then goes back before the home folks and says SEE what a tough hombre I am. We saw the off-Broadway play in the house. They din’t even change the script to add a touch of suspense. The only real question at this point is who gets the two passes so they can go back to their constituents and say SEE I tried to protect you.

  14. 14
    Another Scott says:

    In other news…. Hey! You kicked my car you stupid biker! I’ll show you!!11. Doesn’t end well, as you might expect… :-/

    I’m guessing the guy/gal in the white pickup was wondering WTF happened.

    (sigh)

    Cheers,
    Scott.

  15. 15
    Ohio Mom says:

    @Another Scott: At this point, perhaps the best we can hope for is that your friend is put into remission very quickly and then spends the rest of his life simultaneously petrified of a recurrence and being without adequate coverage.

    Yes, I am in a bad mood.

  16. 16

    @weaselone: probably not enough to do much for rural hospitals/clinics. There is $800+ billion reduction in Medicaid spending counteracted against no increase in current individual market spending with a possible decrease and much higher deductibles

    Providers are getting kicked hard on a second order effect

  17. 17

    @LurkerNoLonger: We’re still trying to figure out the impact on Essential Plan/Basic Health Plans.

    Holding your benefits constant, expect a massive premium increase .

    Holding your premiums constant, expect a several thousand dollar deductible.

  18. 18
    mai naem mobile says:

    @D58826: Dave Weigel said the GOP is planning on blaming anything on the aftermath explosions from Obamacare and Trumpkins with their methhead brains will buy it.

  19. 19
    Laura says:

    @Another Scott: my Trump supporting ‘brother’, just found out he has leukemia and they want to start chemo ASAP. :-(

    That Trump supporting brother is soon to find out that hospital workers tend to be on the “not white” scale and he will likely find that his life and those that make it possible for him to live will challenge the assumptions he’s made and were reinforced by Trump. I hope that’s the case.

  20. 20
    MomSense says:

    @Another Scott:

    McConnell and the rest of the Teabaggers have to see how horrible this is for people who don’t have any money.

    That’s what they like about it.

  21. 21
    D58826 says:

    @David Anderson: I think this all can but summed up with the old cliche – ‘you can’t have your cake and eat it to’. OR in project management terms ‘you can have it fast or you can have it good but not both’ .Now I thought most folks had learned that hard life lesson by the time the hit kindergarten. I guess the GOP base/Trump world are just a bit slow on really absorbing that lesson.

    Or for the adults – in project management terms ‘you can have it fast or you can have it good but not both’

  22. 22
    Matt McIrvin says:

    I get it: they sabotaged Obamacare sufficiently in these states that a severely slashed version of the plan could actually be better to a few people. I expect the media to pay tremendous attention to them.

  23. 23
    Matt McIrvin says:

    @mai naem mobile: Sure they will, but will the median voter buy it?

  24. 24
    LurkerNoLonger says:

    @David Anderson: Well, jeez. Either option doesn’t sound great.

  25. 25
    Kelly says:

    What keeps eating me up is the Republicans think they can get away with taking us back to the Robber Baron Era.
    Are they delusional? There is so much I don’t know. Do they really have the elections rigged long term? My wife wants me to quit reading politics for the summer.

  26. 26
    D58826 says:

    @Kelly:

    My wife wants me to quit reading politics for the summer.

    The wife is always right

    What keeps eating me up is the Republicans think they can get away with taking us back to the Robber Baron Era.
    Are they delusional? There is so much I don’t know. Do they really have the elections rigged long term? ‘

    No to delusional but yes to the rest.
    Der Fuhrer may be a clown but the people he put in the agencies are rolling back regulations left and right all to the advantage of the new Robber barrons.
    The ‘voter fraud’ commission is headed by the guy that developed the crosscheck program. It compares voter registration rolls across states. It hasn’t been validated by any peer-review process but it is being used in sates controlled by the GOP. Now maybe in theory it might be a good idea but it all depends on the sensitivity of the selection criteria. From what I have read if you were registered in one state as John Smith but registered in the state you moved to as John A. Smith then based on a match of the other criteria (SSN, etc) you would be purged in both states. Not sure if there is any mailed warning that it is happening. IT will be used as one tool among several in the eliminate all democratic voters effort. Karen Handel is a big believer and used it when she was Sec. of State in GA. Purged 200k voters. Gee wonder why she won.
    Der Fuhrer is packing the courts with right wing ideologues picked by the very conservative Federalist Society. Goresh on SCOTUS is just the latest example. Roberts and Alito were also Federalist society alums. There is a rumor that Justice Kennedy will retire on Monday. Even of he doesn’t there are three justices in their late 70’s so it is a good bet that Der Fuhrer will get to replace them all by 2020. They are all believers in the Lockner era ‘right of contract supersedes all’ theory of the jurisprudence. It wasn’t till 1937 that the court started to dismantle those ideas. I suspect that we will see a host of undiscovered constitutional rights for corporations, such as Hobby Lobby having a religious freedom claim that supersedes the rights of its employees. At the same time we will see rights that real people have taken for granted – freedom of speech/assembly/voting – will suddenly be much more limited, esp if they impact a corporation. Several states are already trying to criminalize certain aspects of the right to protest. One state has gone so far as to try and pass a law that says if there is a demonstrator in front of your car on the highway you have no obligation to try to avoid running them down. Kind of a motorized stand your ground law. One protester was sentenced to a year in jail for laughing during the Session’s confirmation hearings. And 70 some protesters from Der Fuhrer’s inauguration have been charged with felonies that could bring 70 years in jail. I’m not familiar with the specific actions of the protesters but 70 years does seem a bit extreme, esp. if you consider the case of the kid in Texas who got a year in a rehab facility overlooking the Pacific Ocean after killing 4 people in a DUI car accident. He claimed he was suffering from a case affluenza.
    So no you are not being delusional and .the government of the people, by the people and for the people’ is about to perished from the earth.

  27. 27
    Kelly says:

    @D58826: Well OK, I for one welcome our new Robber Baron Overlords.

    Today’s agenda: grand children at the Zoo.

  28. 28
    D58826 says:

    enjoy. spoiling them is a tough job but someonme has to do it.

    We didn’t have any kids so we spoiled my sister’s girls. Spoil them rotten and then give them back to Mom I always say. I figured it was big Brothers revenge for all the pesty stuff my sister did when we were grown up

  29. 29
    smintheus says:

    This is exactly what I feared the Senate bill’s waivers would entail: “Crazy waivers: the Senate bill invites states to gut important health insurance rules”.

    In short, the waivers available under the Senate bill are breathtaking in scope: not just “big waiver,” as some lawyers call the emerging system that lets states opt out of government rules, but “waiver unlimited.” It’s not clear that the Senate appreciates what it’s doing; indeed, it’s not even clear that rules governing waivers can be included in a reconciliation bill.

    But if the Senate parliamentarian decides that they can be included, and the Better Care Reconciliation Act of 2017 becomes law, its waivers will be a backdoor method for undoing some of Obamacare’s most popular and significant protections.

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