New Dems and revisiting Alexander-Murray

The New Democratic Coalition wants to revive Alexander-Murray again. Modern Healthcare has the details:

The 101-strong New Democrat Coalition wants to fund reinsurance and cost-sharing reduction payments in a package that closely resembles the deal struck last Congress by Senate health committee leaders Lamar Alexander (R-Tenn.) and Patty Murray (D-Wash.)….
To prod leadership into action, the group sent a letter urging prompt committee action to key committee leaders—Frank Pallone (D-N.J.) of Energy and Commerce, Chair Richard Neal (D-Mass.) of Ways and Means, and Bobby Scott (D-Va.) of Education and Labor.

Kimberly Leonard notes that this has an interesting intra-caucus tension:

An associate jackal sent me the letter which will be below the fold.

Alexander-Murray was a good bill for its context. It sought to address significant concerns and possible concerns. Everything in that bill except for the catastrophic plan section had a straight forward chain:

Identifiable Problem — Clear text with a clean logic model — Problem addressed with a high probability of solving the problem that was identified

  • It appropriated funds for Cost Sharing Reduction (CSR) for two years as almost everyone except for Balloon-Juice readers were convinced that not funding CSR would do very bad things to the market.
  • It handled a variety of 1332 issues that several states had complained about.
  • It sent the healthcare.gov navigation and enrollment assistance funding away from HHS and to the states.
  • It kicked CMS in the butt to get Section 1333 (interstate compacts for opt-in multi-state markets) regulations written.
  • Significant reinsurance funding to lower non-subsidized premiums.

All of that made sense at the time.

And most of that bill still makes sense. Section 1332 waiver boundaries and rules can be cleaned up. Navigation and enrollment assistance to the states at Alexander-Murray levels would increase enrollment. Section 1333 regulations would be a good thing for states that want to create larger, inter-state risk pools to reduce variance costs. Reinsurance or other forms of assistance would help the non-subsidized buyers.

However as I have argued many times, the termination of cost sharing reduction subsidies is not sabotage. It instead has actually strengthened the market. The cohort of people earning between two and four times the federal poverty level are seeing much lower net of subsidy pricing.

As I noted in October 2017, the world has changed:

Inaction means, over the long run, more people will get low(er) out of pocket expenses/lower deductible insurance for lower premiums through structured, subsidized exchanges. I think that after a year or two, the expected social contract of what “acceptable” publicly subsidized insurance will move to Gold instead of Silver plans. Lower cost Gold plans and very affordable Bronze plans will increase long run uptake of PPACA insurance among people who earn between 200 percent and 400 percent FPL. This is a group with more political power than Medicaid recipients and Medicaid recipients were able to successfully mobilize to defend their interest this year. Appropriating CSR and thus maintaining the status quo is closer to conservative policy and ideological preferences than resetting the effective benchmark to Gold.

Ironically, we’re now far closer to the Obama 2007 healthcare plan today than we were on January 19, 2017.

There can be good reasons for liberals and Democrats to agree to appropriate CSR. Rep. Pallone’s 2018 HR 5155 appropriated CSR but used the fund flow to expand CSR eligibility and levels as well as expand premium tax credit subsidy eligibility to more people. But the fundamental nature of the ACA has changed due to the termination of CSR and the politics have changed since October 2017 when there was a legitimate fear that not paying CSRs would cause the market to collapse.

But that trade-off has to be made with a recognition of reality. Terminating CSR has created a different market that is more favorable, in isolation, to Democratic policy preferences than Republican policy preferences. The New Dem coalition needs to realize that it was not effective sabotage but a backdoor incidental strengthening.






12 replies
  1. 1
    Fair Economist says:

    One thing the Democrats have to be certain to do in 2021 (assuming we get the trifecta) is not make things *worse* than they are now. We have to at least keep the advantages of Silver loading.

  2. 2
    Baud says:

    An associate jackal 

    We have different classes of jackals now? What class am I?

    Isn’t CSR funding less expensive for the government? It could free up funds for other initiatives.

  3. 3
    Scamp Dog says:

    @Baud: Well, if it’s a full-time position, you start as an assistant jackal, then get promoted to associate jackal, which gives you tenure, and then someday, you can become a full jackal. I’m just an adjunct jackal, so I don’t get paid very well (ok, not at all), and the prospects of getting that full-time gig aren’t looking very good at all now.

  4. 4
    Baud says:

    Let’s do the time warp again!

  5. 5
    rikyrah says:

    We need to shoreup Obamacare…we can work on these new-fangled ideas later.

  6. 6
    Brachiator says:

    However as I have argued many times, the termination of cost sharing reduction subsidies is not sabotage. It instead has actually strengthened the market. The cohort of people earning between two and four times the federal poverty level are seeing much lower net of subsidy pricing.

    Maybe a dumb question. Do the Democrats have access to people who offer as clear analysis as offered here?

  7. 7
    Cheryl from Maryland says:

    @rikyrah: Agreed. Improve Obamacare and extend Medicaid now; getting a good bill for universal coverage is going to take time, especially if the D’s don’t get the trifecta in 2020. The Party and the House groups and the Presidential candidates should counter notions that these things are mutually exclusive. Because it is true, and because of “Dems in Disarray” memes.

  8. 8
    Kent says:

    I don’t know what to think about this.

    My instinct is that nothing negotiated with this administration or Senate on health care can be assumed to be in good faith and they will do whatever they can to torpedo or sabotage. Almost seems the prudent path to let sleeping dogs lie and not draw their attention to the ACA until we have a more favorable administration and Senate. Or until there is some massive bargaining chip that we have which I don’t see now.

    Doesn’t feel like there is any emergency that needs immediate fixing. Health care is such a lightning-rod issue I think if we are exploring the extent to which we can actually come to governing agreeements with the GOP it might be better to start with something less political. I know health care shouldn’t be political but that’s not the world we live in.

  9. 9
    Haroldo says:

    @Kent:

    Health care is such a lightning-rod issue I think if we are exploring the extent to which we can actually come to governing agreements with the GOP it might be better to start with something less political.

    Given the tenor of the current GOP I don’t know if there is anything that can be considered ‘less’ political. As Cole put it, with these folks everything is tire rims and anthrax for dinner.

  10. 10
    Brachiator says:

    @Kent:

    Health care is such a lightning-rod issue I think if we are exploring the extent to which we can actually come to governing agreeements with the GOP it might be better to start with something less political.

    Republican voters want health care fixed. Their anger at GOP lack of action has been an ongoing issue. Maybe Republicans are still too stupid to act in their own best interest, but the proposals of more progressive Democrats might impel the Republicans to be more reasonable.

  11. 11

    @Brachiator: yeah this. Instead of a checklist “undo the fascists handiwork and tinkering” approach, instead take a quick hard look at where we are and what needs improvement. AKA what @rikyrah said.

  12. 12
    Anonymous At Work says:

    *IF Democrats are smart*, they’ll add provisions for the Senate to strip, to the howls of progressives, so that Republicans can claim to “own the lib-tards” while voting for a progressive vehicle. I said *IF*.
    Also, “vehicle” is a key phrase, since it isn’t the destination itself but a means of getting there over time.

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