The individual mandate interactions with Alexander-Murray

There are strong rumors that the individual mandate repeal will be added to the Senate tax cut bill.

If they had 50 votes for this, it would have passed in July. But you know what to do; call the Senate.

More importantly, I want to look at errors underlying the assumption that Alexander-Murray will pass with 60 votes in the Senate in this scenario. That won’t happen. Alexander-Murray is dead. Reality has overtaken the need for a deal to appropriate CSR funding. There could be a deal on 1332 waivers and catastrophic plans but not one on CSR funding.

I think it is fundamentally an issue with baseline confusion. Let’s just follow the money on the first step.

The CBO has three relevant analysis. The first is their updated analysis on repealing the individual mandate. This scores as 13 million people losing insurance and reducing federal expenditures by $338 billion dollars. The second CBO score is the analysis of Alexander-Murray. The CBO score was no coverage change and a minimal deficit reduction of less than $4 billion dollars over a decade. That is effectively a rounding error. The final relevant estimate is the August estimate on the impact of not appropriating CSR payments. The CBO estimate a small coverage increase and an additional $194 billion dollars federal spending over a decade.

The story being told that makes A-M passable is that it is effectively a nothing-burger with a little bit of state flexibility built into it.  That is not the case.

Alexander-Murray was estimated with the specific assumption that CSR would be paid no matter what and that CSR would not be baked into the premiums.  That is not reality that we face today. Insurers had enough time to load CSR costs into Silver rates which has made premiums much more affordable.

Alexander-Murray when measured against current reality is a $200 billion dollar reduction on health insurance subsidy spending.  Funding CSR makes Bronze and Gold plans much more expensive for subsidized buyers.  It does not meaningfully change non-subsidized premiums for most states as they were smart enough to not require a broad load on and off-Exchange.  Funding CSR makes a lot of people a lot worse off.  Right now we are seeing good enrollment numbers. These good numbers may be driven by lower relative pricing or Streissand effects or timing compression. But there are good deals on the Exchanges for subsidized buyers.

Passing an unmodified Alexander-Murray bill takes away those good deals. There may be space for Alexander-Murray waiver modifications will make it easier for states to craft reinsurance waivers that bring down non-subsidized premiums in 2019 but there is no policy reason for Democrats to fund CSR at this time and AM needs Democratic votes in the Senate.

Alexander-Murray is dead. Long live Alexander-Murray.

8 replies
  1. 1
    Humdog says:

    I am still not able to understand how it is that 65% of the subsidized enrollment in the ACA actually hates having insurance enough that they will ditch their subsidy and go without insurance. I honestly thought the Obamacare was helpful to people, not that they had to be dragged into it against their will. How is it that people across the country were fighting to preserve something that over half of the beneficiaries do not want?

  2. 2
    Yarrow says:

    David can you give us some simple talking points to use when we call Republican senators? Or is there something online. Busy today and don’t have much time to look around for them.

  3. 3
    tobie says:

    This is sheer chaos. Whatever Alexander/Murray agreed to in a supposed bipartisan spirit, is based on a premise that the Trumpster Fire administration has now upended. I follow politics closely and am myself totally confused. How does someone who is not interested in politics or simply doesn’t have the time to keep up make sense of any of this?

  4. 4
    Yarrow says:

    In case anyone hoping to get on Medicare soon thinks they’re safe.

    Make no mistake: they're coming after Medicare and Medicaid next. And at that point, the press will go along with their deficit concerns. https://t.co/aZ03MkLEml— Topher Spiro (@TopherSpiro) November 15, 2017

  5. 5
    Blue Galangal says:

    @tobie: I feel the same way. I don’t know what’s going to happen, but it seemed that the tax bill was at least being worked on in both the House and the Senate, etc., and that it might have come up for a vote. Now? Jeez oh pete, who tf even knows any more? All because he can’t keep his tiny little hands off the twitter?*

    *Let me be clear, in no way am I advocating for the monstrosity that is the tax bill, simply marveling that things seemed to be working [koffwhilehewasoutofthecountrykoff] and now… they’re not.

  6. 6
    Another Scott says:

    Thanks for this “explainer”. Well done as usual.

    Typo/AutoCorrect booboo?

    Alexander-Murray went when measured against current reality is a $200 billion dollar reduction on health insurance subsidy spending.

    Cheers,
    Scott.

  7. 7
    MobiusKlein says:

    For fks sake, we put more care into display of financial disclaimers* than the trump/republican folks do on healthcare policy. Infuriating.

    *Try explaining foreign tax withholding on a puny old android device, along with all the other required verbage, not so easy!

  8. 8
    Ohio Mom says:

    I spend the morning out of the house, come home and it’s time to start calling Senators again. Sigh. I am so tired of this!

    I just went down the list of Portman offices: DC and five Ohio numbers. It is as hard to get through to a Portman intern as it ever was. At most of his offices, it’s either answering machines or endless ringing. I left messages where I could and I did get through to one human, in Cleveland.

    I don’t know what makes me sadder: that Portman does all the rotten things that Republicans do, or that he is so inaccessible. They are so distainful of democracy that they won’t even talk to constituents.

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